This is not a brag post. I have not made $1m in one year, but I have managed people who have, and interviewed many more who have accomplished this. If you want to know how to position yourself to have a rare, life-changing financial year read on...
Software sales is a bizarre world. Few careers in today's society allow someone an opportunity to make $1m in a given year. Software sales is one of the few exceptions. Nearly anyone can start down a software sales path, with no specialized education or exceptional natural abilities. I have seen high-school drop outs make $150k peddling software; it's an all-access, high-potential field.
The secret behind these incomes is margin. The massive margins attained by direct-sales software companies encourages aggressive compensation models. The math is simple. A sales rep who attains 300% of their $2m quota will deliver at least $3m in extra profit for their firm. There is plenty of room for commission pay-outs in this model.
Making $1m in software sales is an extremely rare feat. At a large firm like Salesforce or Microsoft, fewer than 0.2% of the sales team achieve this milestone each year. Even more rare are the people who hit this milestone more than once.
Personally, I have not been one of the fortunate ones - my top year as an individual seller was 165% of target - far from the 300% attainment range where $1m starts to come into view. However, a sales leader, I have had the wonderful experience of directly managing a $1m seller. It was an inspirational year to see unfold. In addition, I have studied the traits and behaviours of the sellers who have achieved these high earnings. Often, they are highlighted at sales kick-off events, so I often make a habit of speaking with them to understand their philosophies, style, and winning plays. Most of all, I ask each of them "What is the one thing that made the difference last year?".
Here is what I have learned:
1. You Don't Deserve It (Stay Humble)
No one "deserves" to make $1m. A mentor once told me "once you think you deserve big earnings, you are officially an asshole". Understand your role in the success equation. Yes, you are extremely capable and may be the best in your field. However, a mega-earnings year is inherently dependent on timing and luck, two factors that are (largely) out of your control. Stay humble and kind to yourself as you pursue a rare life opportunity. You are not your earnings.
2. Represent A Great Firm
To close deal sizes that justify seven-figure commission checks, your firm needs to be delivering value worthy of new transactions greater than $1m/year. Your firm should provide a solution that is differentiated, proven to be successful for other firms, and solve, big expensive problems for the customer.
3. Focus On Enterprise
While it may be possible to earn $1m selling to small businesses, the number of transactions to justify a $1m payout would be (nearly) impossible. Enterprise deal sizes are most typically required. Enterprise firms have large budgets to solve large problems. The downside is that you need to navigate byzantine budgeting and political environments, which makes timelines very difficult to accelerate. Further, enterprise roles are very risky in terms of job stability if don't deliver. Don't attempt Enterprise until you are skilled enough to deliver, or have amazing coaches that can help you ramp into that business.
4. Own Ideal Accounts
This is probably the toughest element to "control". It may take years of proving yourself in other accounts until you have earned the right to lobby for an ideal accounts. As well, it's hard to say which accounts are ideal; some firms in crisis are motivated to buy, while others lock down budgets. Regarding account timing, customer leadership changes instantly re-prioritizes initiatives. What can you try to control? Aim to have more than one account so you don’t get landlocked, secure accounts that are growing revenues, and find businesses who are undergoing significant transformative business initiatives where you can attach large software investments. If you happen to align ideal accounts where you or your firm have senior exec relationships, you are much closer to $1m.
5. Coordinate Massive Amounts of Team Activity and Relationships
$1m sales years are not delivered by lone-wolves. Regarding my seller that closed $1m, she had at least 65 co-sellers and partners actively working across 23 departments of a large organization. Your team performs best when there is extreme coordination of your vision, value proposition, and efficient, complete customer coverage. Leverage standing meetings, great resource management of actions required, and customer org chart progress. Build amazing relationships yourself, but it is the power of your team relationships that makes the difference. At least bi-monthly, my seller brought together large groups of her sales team for live meetings, and to provide an overall update of the pursuit for complete alignment.
6. Map a 3-Year Journey
I am not aware of any reps that stepped into an account and secured $1m payout in less than a year. The shortest time-frame I have heard is 14 months. Most likely you are looking at a multi-year process to build relationships, inspire a vision, secure budget, beat competitors and close the deal. You may need to close smaller deals to prove your solution along the way. Look for the large spend zones of the business and the incumbent solutions that aren't driving the value you can. Pick a few targets, and create plans to deploy your solution within 3 years. Keep in the end in mind.
7. Establish Great Internal Executive Relationships
First, you need great exec relationships at your firm to ensure they help you sell your project, provide pursuit feedback, and approve non-standard terms or product enhancements. But there is another reason to graciously manage your executive team: they could carve up your commissions. See what Oracle is accused of from their sales team. In a situation where a seller closes one deal worth 50% or more of their quota, most software suppliers have compensation plans that allow a firm to "re-evaluate" payouts. I have seen a firm pay a seller $6m in commissions when they had the right to reduce to $2m, and a firm pay a seller $1.5m in commissions when their normal plan would have paid $4m. While CFOs play a large role in these decisions, having a strong base of internal executive advocates who genuinely like you can help off-set comp adjustments.
8. Sell to the Why Not
Great sellers are internally pessimistic, always focused on why the customer won't buy, versus why they will. They are paranoid, and seek out customer skeptics that might be standing in their way. They design sales activities to preemptively counter objections, or introduce customers as external proof points.
9. Win Negotiations Before They Start
Strong negotiation positions are forged by a valuable financial business case, a compelling event that drives customer timing, solution differentiation, and friendly relationships with all stakeholders. As well, it's important that early-stage pricing is directional only (using a big range), until you are certain the solution mix has been finalized. Ensure you have plenty a room for each layer of negotiators to extract their pound of flesh. Maintain a high price for as long as possible. Guide towards high-value items that the customer values, but you do not.
10. Accept Deal Pushes or Losses Gracefully
Most mega-years don't happen without major deal surprises (Crazy Ivans), or outright losses. The odds of a good-fit customer resuming their evaluation or failing with a competitor are good, provided you don't burn relationships when you receive deal surprises. Accept what you can't change, and immediately adjust your deal strategy. Don't completely give up. If you have developed champions along the way, these deals can come back...stay close.
This is not an exhaustive list. You must also have your sales skills at an elite level of discovery, exec relationship development, and product/industry knowledge. If you don’t have those skills developed, ensure you build that foundation before you look to make a play for your first $1m year.
If you are interested in more tips to a $1m year, a strong mentor for sellers attempting mega-years is David Rudnitsky of Yext. I highly recommend his playbook that you can find here. (Thanks Dave for some great tips over the years - you may recognize some of them here:)
Written by Kris Lawson