Idea in Brief
The Challenge
A start-up often changes direction as it grows. As the strategy shifts, it’s critical that the employees who bring in the revenue—the sales force—understand and behave in ways that support the new strategy. The sales compensation system can help ventures achieve that alignment.
The Prescription
Revise the incentive system to focus salespeople on new goals at each growth phase. The start-up HubSpot did this; it implemented a plan that encouraged rapid customer acquisition early on, but switched to a second plan to promote customer retention and then to a third geared for sustainable growth.
The Result
Changes to the sales compensation plan helped HubSpot quickly grow its business to $100 million in annual revenue and acquire more than 10,000 customers in 60 countries.
I was the fourth employee hired at HubSpot. I’d met the two cofounders when we were all pursuing graduate degrees at MIT’s Sloan School of Management. They’re smart guys with a big mission: to help companies transform their marketing by using online content to draw potential customers to their websites—a practice known as “inbound” marketing.
