If you’re shifting your sales team to an on-target earnings (OTE) compensation model, you need the right talent, systems, and processes in place to succeed. OTE ties earnings to performance, so optimising your sales operations and approach to hiring becomes crucial. Here’s what small business owners need to know to set up their sales team for OTE achievement.
What you can expect in this article:
Finding Top Sales Talent for OTE
The first step is hiring sales representatives who fit and can thrive in an OTE structure. This may require modifying your talent recruitment and selection approach.
Qualities to look for include:
- Drive and determination – With earnings at stake, you need salespeople continuously motivated to succeed. Look for persistence and a results-driven mindset.
- Business acumen – A strong understanding of your products, customers, and markets is needed to hit sales targets. Seek industry and role-relevant knowledge.
- Self-starter – In an OTE model, much of the responsibility falls on the sales rep. Look for initiative, discipline, and independence.
- Competitiveness – Drawn by goals and competition, the right candidates will embrace OTE’s achievement-based culture.
- Consultative skills – With commission at stake, some may prioritise closing over customer needs. Seek consults who listen first.
- Growth mindset – Top performers constantly seek to improve their selling skills. That learning agility is key.
To attract OTE candidates, your job postings and employer brand should emphasise earnings potential, advancement, and your rewarding culture. Be clear about the earnings opportunity so qualified candidates will apply.
You can learn more about OTE and how it works in this salary guide here: What Does Salary OTE Mean?
Interviewing and Assessing OTE Candidates
When interviewing, use behavioural and situational questions to evaluate OTE-relevant qualities:
- Self-motivation – Ask about goals they’ve set and achieved independently in past jobs.
- Sales skills – Use case questions to assess consultative approach and ability to identify client needs.
- Competitiveness – Discuss past challenges overcome and successes achieved relative to peers.
- Business acumen – Quiz them on industry/product knowledge by probing their research.
- Coachability – Ask how they respond to feedback and improve weak areas.
You can also use sales simulations or role-play exercises to directly observe their skills and selling style.
Have candidates meet with sales managers and team members to assess culture fit too. Getting input can improve hiring decisions.
Managing Operations and Processes for OTE
To maximise your team’s OTE earnings potential, key operational components must be in place, including:
Sales goal setting
Attainable yet ambitious sales targets are vital for motivating OTE performance. Set quotas using historic sales data and growth objectives. Break down goals by product line and territory too. Revisit regularly to adjust as needed based on actuals.
With commissions at stake, real-time visibility into sales performance is critical. A CRM system should centralise up-to-date metrics on deals closed, pipeline status, and revenue targets.
Complex commission formulas require automated calculations to ensure accurate, timely payments. Integrate your CRM with your accounting platform to automatically compute commissions owed.
Reporting and analytics
Provide reps with clear visibility into their OTE progress. Generate reports and dashboards tracking quotas, pipeline, and commission payments. Analyse trends to fine-tune strategy.
To motivate OTE achievement, sales territories should offer reasonable potential for reps to meet their targets. Optimise coverage based on historic performance and market opportunity.
Culture and collaboration
The wrong focus on OTE incentives can lead to cutthroat competition. Actively nurture a collaborative and customer-focused culture via training, team-building, and mentoring.
With these foundational components in place, your sales team has everything required to maximise earnings under the OTE model. Tracking and analysing performance data will help you continuously refine your strategy. And most importantly, support your reps with coaching and mentorship to unlock their potential for OTE success.
Shifting to an OTE compensation model can significantly impact your sales team’s motivation and your business’s revenue growth. But to achieve OTE success requires careful planning and optimisation in several key areas:
- Hiring – Sales reps who possess persistence, business acumen, a competitive drive, and a learning mindset tend to thrive in OTE settings. Adjust your recruitment approach to attract candidates with these attributes. In interviews, assess OTE fit with behavioural and situational questions.
- Sales operations – Robust systems and processes must be implemented to provide goal visibility, accurately track performance, calculate commissions, and supply vital data. CRM and accounting platform integration is ideal for automating commission payments.
- Goal setting – Establish attainable but ambitious sales targets using historic performance and growth aims. Break goals down by product line and territory. Reevaluate regularly.
- Performance tracking – Centralise up-to-date deal status, pipeline metrics, and revenue targets in a CRM platform. Provide reps with real-time visibility into OTE progress.
- Analytics – Leverage sales data and KPIs to gain insights into what’s working. Analyse trends to fine-tune territory assignments, goal setting, and compensation strategy over time.
- Culture – Actively nurture collaboration and a customer focus to balance competitive drive. Recognition, mentoring and training reinforce teamwork.
Following best practices in these areas will empower your sales team with the mindset, motivation, tools and support to thrive under an OTE earnings model. Your sales and revenue growth potential can dramatically increase. But OTE must be strategically implemented, not just used as a tactic to reduce salaries. With careful planning and execution, your team can succeed with OTE while customers continue to be served well. The outcome is a win for your sales reps, customers and ultimately your bottom line.