Building Sales Success: The Key to Fair Compensation During the Ramp-Up Period

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The Ramp-Up Dilemma

Hiring salespeople is a pivotal moment for any startup. These professionals drive revenue generation, market penetration, and business growth. Yet, in the fast-paced world of Israeli startups, a significant misconception persists: how to fairly compensate new sales hires during their ramp-up period.

The ramp-up period, typically lasting 2-3 quarters, allows salespeople to learn the product, understand the industry, build relationships, and develop a sales pipeline. Expecting immediate results during this phase is unrealistic. Unfortunately, many startups only provide a base salary during this period, failing to align compensation with the realities of sales operations. This approach not only hampers the salesperson but ultimately hurts the company’s growth.

Why Ramp-Up Compensation Matters

Sales Professionals Thrive on OTE, Not Base Pay Alone

Salespeople are drawn to roles offering On-Target Earnings (OTE) — a combination of base salary and performance-based bonuses. Without OTE during ramp-up, motivation and focus wane, reducing the chance of long-term success.

The Ramp-Up Period Is an Investment

New sales hires need time for training, onboarding, and understanding market dynamics. Providing only base pay during this period suggests a lack of commitment to their success. A supportive compensation structure signals trust and ensures a better return on investment.

Retention and Morale

Under-compensated sales hires are more likely to leave, creating a costly cycle of turnover and lost productivity. Conversely, offering guaranteed bonuses or other incentives fosters loyalty and boosts morale.

Consequences of Ignoring Fair Ramp-Up Compensation

Higher Attrition Rates

Startups that skimp on ramp-up compensation see higher turnover as talent migrates to competitors offering better packages.

Underperformance

Financial stress impacts focus, making it harder for salespeople to absorb training or build effective pipelines.

Damaged Reputation

Companies perceived as undervaluing their sales teams struggle to attract top-tier talent, stunting long-term growth.

Best Practices for Ramp-Up Compensation

1. Offer Guaranteed Bonuses

Guaranteed bonuses during the first 6-9 months help align earnings closer to OTE while new hires build their pipelines. This financial safety net enables them to concentrate on training and long-term results.

2. Implement Structured Ramp-Up Plans

Define clear milestones for the ramp-up period, such as:

• Month 1: Complete product training and onboarding.

• Months 2-3: Begin prospecting and engaging leads.

• Months 4-6: Start closing deals and meeting partial quotas.

Compensation tied to these stages creates a transparent and motivating system.

3. Set Reduced Quotas

Realistic quotas during ramp-up phases set fair expectations. Recognizing partial achievements fosters motivation while new hires gain their footing.

Alternatively, startups can consider non-monetary targets during this period, such as learning the product, mastering the pitch and demo, or contributing to initiatives like process improvement and continuous learning. Offering diverse objectives engages individuals and demonstrates goodwill, fostering a supportive environment during the ramp-up phase.

4. Develop Tailored Onboarding Programs

Custom onboarding initiatives, including mentorship, product deep-dives, and market training, accelerate the ramp-up process, benefiting both the salesperson and the company.

The Business Case for Fair Ramp-Up Compensation

Improved Performance

Financial stability during the ramp-up period allows salespeople to focus fully on building their skills and developing pipelines. Without the distraction of financial stress, they can dedicate their energy to understanding customer needs, refining their pitches, and creating effective sales strategies. This leads to stronger pipelines and higher success rates in the long term. Furthermore, a focused salesperson can more effectively absorb training and align their approach with company objectives, accelerating overall team productivity.

Better Retention

Employee retention is critical to maintaining a strong and cohesive sales team. Fair compensation during the ramp-up period signals to new hires that they are valued and supported, fostering a sense of loyalty. High turnover due to under-compensation not only disrupts team dynamics but also incurs significant costs, including recruitment fees, onboarding time, and lost productivity. By reducing turnover through fair practices, startups can create a stable foundation for sustainable growth and improve team morale. This also reinforces a positive workplace culture, making the company a more attractive destination for top talent.

Stronger Employer Branding

Companies that prioritize their employees' success during critical phases like the ramp-up period build a reputation as fair and supportive employers. In the competitive Israeli startup ecosystem, this can be a decisive factor in attracting top-tier sales professionals. Strong employer branding doesn’t just help with recruitment; it fosters goodwill within the industry, strengthens investor confidence, and enhances overall corporate image. This holistic advantage ensures that the company can grow its workforce and business sustainably over the long term.

Cultural Shifts in Compensation Philosophy

Israeli startups often pride themselves on a “lean and mean” approach to scaling. While this fosters innovation, it can neglect the human aspect of team-building. Recognizing sales as a high-pressure but cyclical profession is essential. Providing financial stability during the ramp-up phase signals trust and confidence in both the hire’s potential and the company’s long-term strategy.

Real-Life Example: A Cautionary Tale

An Israeli SaaS startup recently hired two seasoned sales professionals, offering competitive OTE packages but paying only base salaries for six months. The result? One hire left after four months due to financial stress, while the other underperformed due to a lack of motivation. Guaranteed bonuses or structured ramp-up support could have avoided this outcome, preserving team morale and revenue targets.

How Marketfit Sales Partners Can Help

Planning effective compensation packages requires expertise. Marketfit Sales Partners specialize in:

• Designing guaranteed bonus structures aligned with ramp-up timelines.

• Developing realistic quotas and KPIs.

• Creating competitive packages that attract top talent.

Marketfit ensures that compensation plans empower sales teams and drive sustainable growth.

Conclusion: Building for Success

Israeli startups need to prioritize fair ramp-up compensation to build high-performing sales teams. By offering guaranteed bonuses, structured onboarding, and realistic expectations, companies can attract and retain top talent, foster loyalty, and drive sustainable growth. It’s not just about fairness; it’s about investing in long-term success.

FAQs

1. Why is OTE important during ramp-up periods? OTE ensures salespeople are motivated and financially stable, enabling them to focus on learning and building a pipeline.

2. How long should a ramp-up period last? Typically, ramp-up periods last 6-9 months, depending on the complexity of the product and sales cycle.

3. What are the risks of undercompensating sales hires during ramp-up? Under compensation leads to high attrition, low morale, and poor performance, harming long-term business goals.

4. How can startups create effective ramp-up compensation plans? By offering guaranteed bonuses, setting realistic quotas, and implementing structured onboarding programs.

5. What role does Marketfit play in compensation strategy? Marketfit helps startups design compensation plans that balance fairness with business objectives, ensuring sustainable growth.