Using Comp Plans to Drive Strategy with Ryan Milligan from QuotaPath
Paying the price for change.
I’m told that not everyone loves reading long think pieces on AI, ICP and Vertical SaaS. So, this week we’re trying something a little different for Uncharted Territory—adding moving pictures and sound to this otherwise text-based newsletter.1
I had the pleasure of interviewing Ryan Milligan, VP of Sales and Revenue Operations at QuotaPath. Ryan lives and breathes sales compensation. Since many of us are about to roll out comp plans in the next couple months, I thought it would be a good idea to discuss the role of compensation in driving sales strategy. We did that and a whole lot more.
Key topics:
How to create a comp plan that properly incentivizes reps to execute your strategy and move the KPIs you care about
How to incorporate rep feedback into your comp plan and roll it out in a way that keeps reps motivated
How to know if your comp plan isn’t working and what to do about it
How to communicate your plans to your peers, your CEO and your board
Trends in comp strategies for 2025
One other interesting thing about Ryan is that he’s the rare VP that runs both Sales and RevOps. We actually opened the conversation with a discussion of what he’s learned from doing both. Ryan’s got some great advice for ensuring harmony between Sales and RevOps.
I’ve pulled out the key themes of the conversation below for those of you that like to read good old fashioned words (or those of you who would rather avoid being exposed to my amateur podcast skills). For the writeup below, I’ve put the Sales-RevOps stuff at the end so we can focus on comp.
OK, on to the show.
On using comp to drive strategy
For every role, ask “what is this comp plan—in one sentence—telling me to do?”
— Ryan on driving rep behavior
Contrary to popular belief, salespeople aren’t coin-operated. But they are human and humans respond to incentives. The key is to make sure rep incentives fully align to your strategic goals.
Ryan illustrated this with a fun story about QuotaPath.
Early on, they were trying to find PMF and GTM fit so they were primarily offering month-to-month contracts. They were fighting some churn as a result. When he looked at the comp plan, it was actually more lucrative (when factoring in average discounts) for a seller to sell a monthly plan than an annual plan.
He ran an experiment for one quarter where he effectively doubled commission on two year deals. The reps immediately responded to the incentive and started pitching multi-year deals as standard operating procedure. The almost immediately went from 15% of revenue coming from multi-year deals to 90%.
Ryan offered a simple two question formula for using your comp plan to drive strategy:
What is the big metric that you want to move for the business as a whole?
For every individual role, what is the comp plan telling them to do?
The answer to #1 is often one of the usual suspects: going up market, reducing churn or capturing a particular vertical. In those cases the big metric might be ACV increase, GRR increase or new logos acquired in the vertical, respectively.
Once you have the answer to the big metric question, then Ryan suggests you answer the second question with a single sentence of each role. Put yourself in the mindset of a rep and ask yourself how you would “beat” the comp plan.
On comp plans for humans
You got to interview your IC sellers. Hey, like if you dreamed up your perfect comp plan, what would change from this year? And then you kind of make a list of your gives and gets that your reps want. […] Then you build the comp plan with that list in mind and when you're rolling it out, you share your gives and your gets.
— Ryan on rolling out comp plans that keep reps motivated
Comp plans are about creating the rules of the game. Humans are pretty wary of change, and new comp plans mean new rules. The risk is those changes may not be well received and you could end up with de-motivated (or outright mutinous) reps.
According to Ryan, getting rep input early is critical to defining any comp plan. He recommends interviewing your IC sellers to figure out their preferences. You’ll discover it’s not just about making more money. He offers examples like moving to quarterly plans because monthly quotas are too stressful or two weeks of quota relief for vacation. As you build the plan, take those requests into account.
When you’re rolling out the plan, make sure to pay attention to three key areas:
How reps win - Be crystal clear about how reps make the most money (As Ryan puts it: “I will pay you a comical amount of money to do ___________”) . Note that this goes back to your one-sentence behaviors from the previous section.
Transparency - Make it clear to the reps why the plan incentivizes what it does and how that relates back to company goals.
Puts and takes - Use your IC conversations to clearly point to the “puts” that you’re delivering for reps to help soften any “takes” that reps might perceive negatively.
Finally, don’t sleep on some of the other ways you can help sellers succeed. You can often roll out things like career development initiatives, better tools, better territories, or more pipeline support alongside the new comp plan. Just remember, these things are meaningful but don’t expect them to be a substitute for cold, hard earning potential.
On changing comp off-cycle
Attainment is the easiest trigger. And it's not average attainment, it's median attainment, […] what is the distribution of attainment looking like? If some people are hitting quota and some people aren't, it becomes more of a question of: is it possible?
— Ryan on recognizing when things need to change
The past couple of years haven’t been the easiest, especially in SaaS. Plans don’t always go according to plan and that can mean you need to make an off-cycle comp change.
Ryan’s advice is to look for warning signs in the distribution of attainment. Average attainment isn’t sufficient. The biggest warning sign is when median attainment is low. If only a few reps (or none of them) are hitting quota consistently, you have to ask yourself whether it’s even possible to do so.
If you’re going to make a big change—whether to quota or to the team itself—do it big and do it once. Piecemeal resets kill morale. And remember, you’re not doing anyone any favors by hanging on to a big team where no one is hitting quota.
On communicating with peers, CEOs and boards
Be super transparent about where your assumptions fell flat and be really direct about the changes that you recommend.
— Ryan on board management when there’s a miss
When you do make a change (whether off-cycle or not), you’ll find yourself communicating—and possibly defending—that change to your peers, your CFO, your CEO and your board.
Ryan leans heavily into his RevOps background here and recommends you tell a deep quantitative story. In good times, this is pretty simple. If you’re making a significant change in challenging times, you’ll need to really do your homework. For example, if you plan to lower quotas but keep OTEs the same, you’ll need to justify the added cost of doing this vs the cost of attrition.
Finally, Ryan has some great advice for maintaining credibility with boards, especially after a miss:
Keep the new plan conservative.
Clearly and quantitively explain where your assumptions were wrong in the original plan.
Clearly show how your new plan addresses the new reality.
You don’t get many shots at this. Credibility with a board is nearly impossible to get back once you’ve lost it. Tread carefully and thoughtfully.
On comp in 2025
Revenue retention has been the name of the game in pretty much every conversation I'm having right now. […] And what that means for compensation plan design is oftentimes forgoing that extra dollar of top line new biz growth to focus on a retained or expanded dollar and shifting more of quota towards renewal and expanded dollars.
— Ryan on 2025 comp trends
For a quick hit at the end of the conversation, I asked Ryan about how comp plans are evolving in 2025.
He thinks retention and expansion are the name of the game now, with less emphasis on new logo acquisition. More teams are opting for one centralized commercial team that owns acquisition, retention and expansion. In some cases, this means a return to full-cycle sellers and comp plans that do more to reward renewals and expansions than they do new logos.
Bonus: Lessons learned running sales and RevOps
Ryan originally joined QuotaPath to lead RevOps. A big part of his role was handling commissions, so he deeply understood the problem QuotaPath solves and the ops persona they sell to. Ultimately, that made him a natural fit to lead the whole revenue team.
I asked Ryan for his perspective on how sales leaders can optimize the way they’re working with their ops teams, and vice-versa. Here’s what he had to say.
The first thing is you got to understand what the business is being measured on this year and frame every ask [of RevOps] as to how you're going to improve that metric.
— Ryan on what CROs can do for RevOps
Sales leaders need to recognize that the fundamental job of RevOps is to drive revenue KPIs throughout the business. Sales leaders often own a specific number and it’s easy to get frustrated with a RevOps team that doesn’t seem sufficiently focused on that same number.
Ryan recommends making sure that you’re framing your requests and needs to the RevOps team around the holistic KPIs that impact the company, not just the number you’re directly responsible for. Theoretically these should all be aligned, but we all know that’s not always the case.
So if you're looking for something to do to make a sales leader happy, give them more data around revenue predictability and tell them super specifically.
— Ryan on what RevOps can do for revenue leaders
RevOps leaders need to recognize that sales leaders are always under pressure to hit the number for this quarter—that’s priority number one. Their second priority is putting themselves in a position to hit their number over the next several quarters.
According to Ryan, the best thing a RevOps leader can do is drive more predictability. This might be related to more data or it might just be getting really specific with a diagnosis when something is off. Do that, and you’ll keep sales leaders happy.
Fair warning, this is not super polished. The production values are profoundly, as the kids say, mid. So is the hosting. Ryan, however, is great.