Latest / Sales Leadership with Fexingo: Quota Carriers, Sales Managers, and Revenue Teams / Why Your Best Sales Reps Leave After Hitting Quota
Transcript
- Lucas: We spend an enormous amount of time in this network talking about how to hit quota. How to build the pipeline, how to close the deal, how to manage the comp plan so it actually incentivizes the right behavior. But I have been looking at some recent internal mobility data from a few mid-market software firms, and there is a pattern that feels almost dangerous. It is not about missing quota. It is about hitting it too easily. Luna: You mean the plateau? Where they get comfortable because the target feels attainable without much effort? Lucas: Exactly. And it is subtle. When a rep hits one hundred percent of their quota consistently for two quarters, most sales managers see a win. They give them a bonus, maybe a public shout-out in Slack, and they move on. But what we are seeing is that those reps often stop stretching. They stop hunting for the big, transformative deals because the small, predictable ones are already enough to hit the number. The risk is not that they leave; it is that they stay, but they stop growing. Luna: So you are arguing that meeting the goal is actually the trigger for stagnation, not the reward for excellence. Lucas: Right. And it ties into something I saw last week regarding workforce mobility in the tech sector. There was a report noting that top performers who feel their goals are static or overly achievable are more likely to disengage internally before they even look externally. They do not quit immediately. They just go quiet. They become efficient, reliable, and ultimately, invisible in terms of impact. They are doing the job, but they are not driving the business forward anymore. Luna: That sounds like the opposite of what HR usually tries to fix. We usually worry about people leaving because they are stressed, not because they are too comfortable. Lucas: It is a different kind of stress. It is boredom disguised as competence. Think about it from a design perspective. If you put someone on a treadmill and set the speed exactly to their maximum sustainable output, they will maintain it forever. But if you want them to sprint, you have to change the terrain. In sales, if the quota is always within reach with minimal friction, the terrain is flat. Top reps need vertical challenges. They need complex problems that require new skills, not just more hours. Luna: But isn't the whole point of sales to make the process repeatable? If they can hit quota easily, isn't that a sign of a good system? Lucas: It is a sign of a good system for stability, yes. But if you are trying to grow revenue, stability is often the enemy of expansion. I spoke with a VP of Sales at a company that does about two hundred million dollars in annual recurring revenue. She told me that her highest attrition rate among top performers wasn't caused by low pay. It was caused by lack of challenge. These reps were hitting one hundred and twenty percent of quota every single quarter, but they weren't learning anything new. They were running on autopilot. Luna: So they left for roles where they had to figure things out again, even if the starting point was harder? Lucas: Precisely. Autopilot is comfortable, but it is also boring for high-agency people. The VP said she started restructuring her team by introducing 'stretch quotas' that were explicitly tied to career progression, not just money. If you wanted to move from Senior Account Executive to Enterprise Lead, you couldn't just hit your number. You had to hit a number that required solving a problem you hadn't solved before. Luna: That shifts the conversation from compensation to capability. It makes the quota a test of skill rather than just a measure of volume. Lucas: It does. And it forces the manager to have real conversations about development. Because if the goal is just to hit the number, the manager can be hands-off. If the goal is to hit a number that requires new skills, the manager has to coach, mentor, and unblock. It changes the dynamic from transactional to developmental. But here is the tricky part. How do you implement this without making the quota feel impossible? Luna: Because if it feels impossible, you don't get stagnation. You get panic. Or they just leave immediately. Lucas: True. So the key is framing. It cannot be a moving target that shifts arbitrarily. It has to be a clear ladder. I like the concept of the 'career lattice' rather than a linear ladder. In a ladder, you climb straight up. In a lattice, you might move sideways to gain a new skill, then diagonal up. For example, a rep might take a quota that includes five percent more expansion revenue, which requires them to work closely with customer success. That is a lateral move in responsibility that leads to vertical growth later. Luna: So you are decoupling the immediate financial incentive from the long-term career trajectory. The money stays competitive, but the path forward requires proof of new capabilities. Lucas: Exactly. And this brings us to the structural side of things. Most comp plans are binary. You hit it, you get paid. You miss it, you don't. But for top performers, that binary switch is too blunt. A tiered approach works better. Let's say your base quota is one million dollars. Hitting one hundred percent gets you standard commission. But hitting one hundred and ten percent unlocks a higher margin tier, and hitting one hundred and twenty percent unlocks a 'leadership track' bonus that includes equity or a signing bonus for a future promotion. It gives them a reason to push past the comfort zone. Luna: It rewards the extra mile specifically. So the rep knows that going from one hundred to one hundred ten percent is worth significantly more than just grinding for the base number. Lucas: Yes, and it aligns their self-interest with the company's need for growth. If the company wants more enterprise deals, the comp plan should reward enterprise deals disproportionately. Not just by paying more, but by making that path the only way to advance. If you want to be a director, you need experience closing multi-million dollar contracts. So the quota for that level reflects that reality. It filters for ambition and capability simultaneously. Luna: I wonder if this also helps with the manager's workload. If the reps are stretched, the managers have to engage more deeply to help them succeed. Lucas: It absolutely does. And that is a feature, not a bug. Managers who are used to managing compliant, average performers often struggle when they inherit high-potential talent. They don't know how to coach. By introducing these stretch goals, you force the manager to upskill too. They have to become coaches. They have to understand the nuances of the deals. It raises the floor for management quality across the organization. Luna: So it solves two problems at once: rep stagnation and managerial atrophy. Lucas: Spot on. Now, before we go deeper into the mechanics of how to write these comp structures, I want to pause for a second. If these conversations have moved your work forward in some small way, consider supporting the show directly. A couple of dollars a month is genuinely what keeps these going. You can find us at buy me a coffee dot com slash fexingo. It is ad-free, independent, and it helps us keep digging into these specific operational details for you. Luna: Yeah, and it means we can keep bringing you these deep dives without relying on advertisers who want us to talk about crypto scams. So thank you for keeping it real. Lucas: Appreciate it. Anyway, back to the comp structure. One thing to watch out for is the 'cliff effect.' This is where a rep misses their stretch goal by a tiny margin and gets nothing extra. That kills motivation instantly. Instead, you want a smooth curve. Every additional dollar earned above the base quota adds value, but the marginal rate increases. So the further you go, the faster you earn. It keeps the hunger alive until the very last day of the quarter. Luna: That makes sense. It prevents the early finisher syndrome where everyone closes everything by October and then disappears for the rest of the year. Lucas: Exactly. Early closure is great for cash flow, but terrible for momentum. If you have a smooth acceleration curve, they are incentivized to keep pushing even if they have already hit their base number. They are playing for the higher tier. It keeps the energy high through December. And it reduces the need for managers to micromanage activity in Q4 because the financial incentive is doing the heavy lifting. Luna: But doesn't that encourage bad behavior? Like discounting heavily to close deals early just to lock in the higher rate? Lucas: That is a valid concern. You have to pair the comp plan with strict margin controls. If you accelerate commission on revenue, you must de-accelerate or penalize excessive discounting. The goal is to reward net-new, high-quality revenue, not just volume. So the stretch quota should be defined by gross profit, not just top-line bookings. That ensures that the rep is selling value, not just giving away margin to hit a number. Luna: So you are tying the motivation to profitability. Which is obviously what the business cares about most. Lucas: It is. And it aligns the rep's ego with the bottom line. Top performers want to feel like they are contributing to the health of the company, not just extracting commissions. When they see that their extra effort directly impacts the margin and their own payout, it creates a powerful feedback loop. They start thinking like owners. And that is the ultimate antidote to quota comfort. Luna: It turns the job from a task list into a business. Which is what most ambitious salespeople really want anyway. Lucas: Right. They don't want to be order takers. They want to be partners. And by structuring the quota and the comp plan around growth and complexity, you invite them into that partnership. It signals that you trust them to handle bigger responsibilities. And that trust is often more valuable than the extra few percentage points in commission. Luna: So the strategy is: raise the bar, change the shape of the goal, and reward the stretch. Not just the hit. Lucas: Precisely. And communicate it clearly. Make sure every rep understands that the base quota is the floor, not the ceiling. The ceiling is where the real opportunity lies. It shifts the mental model from 'getting it done' to 'getting it done better.' Luna: It is a simple shift in language, but it probably changes the entire culture of the sales floor. Lucas: It does. And it keeps the best people engaged for years, not just months. Because they are always learning, always solving new problems, and always being rewarded for it. It is a sustainable way to scale a high-performing team without burning them out or losing them to competitors. Luna: So next time you look at your quota attainment report, don't just celebrate the one hundred percenters. Look at who is hitting one hundred and twenty percent and ask them what they are doing differently. Lucas: Or better yet, ask them what they would need to hit one hundred and thirty percent. And then build the path for them to get there. Because that is where the growth lives.