Wait. Did you say no commission?
It was mid-2019 and I was considering my next move. I’ve been in the tech startup space for a while — building out businesses, teams, and individuals. I (thought I) knew what I was looking for: a strong commission plan or at least one that had the flexibility to modify.
Accelerators. Sales performance incentive funds (SPIFs). President’s Clubs. You get the picture.
So when the recruiter mentioned monday.com’s no commission sales structure, I didn’t know what to think.
I paused in disbelief … scratched my head and thought, how would that work? No commission? For Sales? Huh? Sales compensation = commission. How was this even possible?
I was curious — and doubtful — but open to learning more. And I’m glad I did.
Fast forward 18 months later and I’m still here at monday.com. While a no commission structure isn’t simple (and maybe not for every company) it’s an entirely new dimension of sales that shines a light on aspects of the sales organization that could use reconsidering.
Here are 4 reasons why monday.com’s no commission structure works for our team (and maybe you too).
Disclaimer: a no-commission sales structure is not for everyone. And that’s okay. I’m here to share why it works for me, my team, and monday.com.
Reason #1: Total Business Alignment
In many organizations, sales — and salespeople — are held to a higher standard.
Sales are the team that closes deals, brings in new customers, generates revenue, and ultimately “sells” the virtues and value of your amazing product or service.
In many cases – without sales, there would be no company.*
*Technically, other teams in an organization could make the same argument: With no product, there are no sales. With no marketing, nobody knows about the product. And so on. In fact, monday.com started without a sales team and operated that way for several years in a no-touch model.
But in a no commission sales structure, sales are not better (or worse, for that matter) than any other team in the organization. We are all one, totally aligned but executing our respective discipline/profession.
A no commission sales structure levels the playing field and ensures total business alignment across the company.
Paloma Kim, Sr. Account Executive (and recently promoted to Team Leader) at monday.com, says it best:
“This model aligns motivation between consultant, client, and company. It opens the door to a consultative sales approach focused on our clients’ challenges and harvests excellent customer experience. This, ultimately, translates to bigger wins together as a whole.”
The goal is centered around scaling our company, NOT our individual wealth. The latter will come with success. So everyone here is “looking at the same dot on the wall” — working together to grow the business.
Reason #2: Customer First
Without customers, there would be no company.
Customers are the reason companies exist. They are the lifeblood of any organization. They are the primary revenue driver. They also help drive the company’s innovation and progress and its product and services.
A no commission sales structure helps to put the customer where they belong: FIRST.
Sales reps think about how to add value to the customer. They take as much time as necessary to ensure a good fit, and a solid transition from sales to customer success occurs. Sure, sales reps want to close the deal, hit their targets, and secure new customers.
However, they also want to do what is best for the customer.
This customer-first mentality leads to customers who stay longer, pay more, and become raving fans and advocates for your business.
Chris Moore, a monday.com Sr. Account Executive since February 2020, feels “empowered to work on strategies that have the greatest impact for clients,” not those who impact his personal take-home.
“Over the course of the last year, I’ve realized that working in a no-commission model means I consistently give more thought and attention to my client’s needs, knowing their success is aligned with both the company’s and my own. This means higher-impact solutions for clients, stronger relationships for monday.com, and more motivation for me to stay focused on what matters.”
The challenge: sales reps aren’t incentivized to ensure a customer is the “best fit” for the organization. Instead, in a commission-based system, reps are compensated to close more (and higher value) deals.
Reason #3: Teamwork and Collaboration
A no commission sales structure enhances teamwork – tenfold
There is no “I” in “team,” and that’s a good thing because we are BETTER TOGETHER.
I don’t miss the days of seeing resentment, bitterness, or envy over a teammate getting a bluebird. Nor do I crave the shifts in positioning credit and blame, distracting from the lessons. Those days are gone, along with the Lone Ranger. In fact, we have a “Never Lose Alone” mentality across everything we do.
In a no commission model, everyone wants to help their teammate.
“Teamwork is engraved in our day-to-day operations from the very beginning,” says Paloma Kim.
Before I go too far down this road, let me be clear:
Yes, we still have sales goals: Aggressive ones!
Yes, we still track sales progress-to-goal: Both qualitative and quantitative measures.
Yes, we still have incentives to meet/exceed those goals: Recognition, career pathing, and bonuses.
And YES we’re fully transparent (something we pride ourselves on at monday.com) about where every sales rep stands as it pertains to individual goals as well as team/company-wide targets.
A ton has been written — and spoken — about the importance of teamwork and collaboration regarding employee morale, engagement, and success. As the author in this Forbes article points out from a Stanford study (and I’m paraphrasing):
Those who collaborated stuck with tasks 64% longer than those who went at it alone. The collaborators also reported higher engagement levels, lower fatigue levels, and a higher success rate.
I find that everyone on the team truly, genuinely wants to help the person sitting (virtually, now) next to them. The saying is true: A rising tide does lift all boats.
Reason #4: Agility
It’s hard for me to overstate this:
My ability to make decisions that are best for my team — to test, tweak, to move people around, to create new groups, and so on — becomes significantly easier when compensation is taken out of the equation.
It’s not even close.
In my pre-monday.com days, many decisions carried a financial impact on someone. And, because the structure was (being) established, there were limitations to how creative you could be to overcome a challenge, solve an issue, or design and execute for scale. This is especially true with timing.
Those days are gone. And our limitations are only those we put on ourselves.
In my monday.com no commission world, I can:
- Expand MM into the ENT segment temporarily to balance the lead flow
- Pilot an approach we haven’t yet considered, and do it with dedicated, committed, and brilliant resources
- Move teammates around so they aren’t underutilized because we operate as ONE TEAM (with many micro-teams within)
None of this impacts their compensation. And none of these decisions need to wait.
Example #1: We lifted our mid-market segment from a cap of 1,500 employees to 4,000 employees for 6-7 weeks to balance the lead flow, pipeline and workload, and ensure our customers got the attention and experience they deserved.
Example #2: We piloted a new segment with our top rep as a pace setter, then added one rep to the pilot every month to see if they could deliver the same results. After 4 months and 4 piloted members, we’ve modified our hiring plans to dedicate another 16 new reps to this effort.
Example #3: With our aggressive hiring plans and thorough interview process, it became difficult to have competing priorities across all the sales managers, especially for HR/recruitment when coordinating processes and schedules. We took a manager who had just built a complete team quickly (and very effectively for that matter) and asked him to do it again while realigning their current team members to other teams. That manager is currently on his 4th team build-out over the last 9 months. This means HR has a single point of contact and a dedicated team to focus on as a priority, this manager executes hiring and foundational aspects to lay the groundwork, and we promote internally to take over a complete team where execution is the focus instead of interviews and hiring.
Win. Win. Win.
Traditional, commission-based sales models are great (when they work)
Commission plans are meant to drive a specific behavior — sales in exchange for money.
Unfortunately, these behaviors do not always foster teamwork and collaboration. They may boost individual, short-term positive action, but they can create tension and division in the long run.
Federico Maiola, monday.com Account Executive since January 2021, agrees:
“As a Sales Professional, earning commission has always been a source of motivation to work hard and excel at my job. When I first heard about monday.com’s no commission model I wasn’t sure it would work for me. In a few short months, I’ve done a complete 180. The level of selflessness and team camaraderie that this model creates is incredible. Add the top-down transparency from management on company goals/objectives, and I feel truly honored to be given the opportunity to be part of something special — and that’s the only motivation I need to crush my number.”
This “everyone out for themselves” attitude does not always bode well for customers either and can lead to less-than-ideal fits and, ultimately, churn.
As we all know from annual sales kickoffs, there seems to be a new commission plan every year. Sales reps spend time figuring out how to make the most of the commission plan in order to make the most money, and when they break it the plan adjusts accordingly. Accelerators now start at 110%, hurdle rates instituted, penalties applied, Professional Services no longer counts for quota relief, etc.
And regardless of the reasoning for the annual changes, a significant amount of time, effort, energy (and $$) is spent constantly tweaking — or revamping — the commission model. But worse, reps spend too much time determining if they were paid out correctly … and devising plans to “beat” the model.
I’d rather have my sales reps spending more time learning and growing and closing more (good) business.
It’s not always unicorns and rainbows.
No model is perfect. No sales commission structure is ideal. While I’m in full support of the monday.com no-commission system, I’d be naive to think it comes drawback-free.
A no commission sales structure is not for everyone.
We sometimes lose out on salespeople who are driven by extrinsic (often, financial) rewards. And we occasionally miss landing a “top sales rep” who may have a proven track record of exceeding their goals (and their On Target Earnings).
Jason Miller has been a Sales Director at monday.com for 2+ years. Like others, he was skeptical at first: “Before joining this team, I thought a no commission model was ludicrous. My first instinct was to question how top talent is hired and motivated.”
Jason quickly came to realize the benefits of a no commission structure: “This type of model has weeded out the toxic sales reps that plague many companies, those who will do anything to make money.”
“We hire passionate people, team members who see the bigger picture, folks who ‘think’ differently and are more long-term oriented versus focusing on short-term commission grabs. As a manager, I also find it refreshing to not motivate through getting a deal done to make money, but instead focusing on intrinsic motivators; it certainly has allowed me to develop closer relationships, both personally and professionally, with those I manage, as well as those that manage me.”
As Jason highlights, a “money-hungry” employee would not thrive at monday.com. They would likely get frustrated or feel out of place. They’re wired for the short-term gain, not the long-term vision and execution — the amazing journey.
The monthly highs (or lows) of their paid commission they’ve already calculated themselves would be missing, the race for President’s Club non-existent, and the sales-led culture would be in opposition to a people-led (Product, Marketing, Sales, Success, etc) one.
While it’s not always unicorns and rainbows, we are all aligned to the same goal and are constantly working together — collaborating — to achieve it. We help each other. We work with each other. We succeed together.
The tide is rising at monday.com, and all boats are being lifted.
Listen to Rethinking Incentives for Sales Reps podcast Episode
