Dear SaaStr: How to Set an Effective Sales Plan for Your VP Sales?

Setting an effective sales plan for a VP of Sales is a critical challenge for any founder. It requires balancing ambitious growth targets with realistic expectations and robust risk management. SaaStr, a leading resource for SaaS founders, proposes a powerful solution: the C10, C60, and C90 framework, where 'C' stands for Confidence.

This framework involves creating three distinct layers of planning, each designed to address different scenarios and probabilities. You are essentially building three layers of planning to balance ambition, realism, and risk management. Here’s how to break it down:

1. The C10 Plan: Your Ambitious Stretch Goal

  • Confidence Level: Approximately 10% chance of achievement.
  • Purpose: This is your "moonshot" plan, representing the absolute upper boundary of what’s possible if everything goes perfectly—your team overperforms, market conditions are ideal, and you hit the jackpot.
  • Application: While highly aspirational, defining the C10 plan is crucial. It sets a high bar, motivates the team to push beyond the base plan, and helps visualize peak performance. For instance, if a realistic target is $9 million in revenue, a C10 plan might aim for $12 million.

2. The C60 Plan: Your Realistic Base Target

  • Confidence Level: Approximately 60% chance of achievement.
  • Purpose: This is your core operational plan, the target you are more likely than not to hit, yet it remains ambitious. It forms the foundation for your operational model, guiding decisions on sales hiring, marketing spend, and product investments.
  • Application: The C60 plan is the one you communicate to your sales team and on which your VP of Sales' On-Target Earnings (OTE) should typically be based. If your C10 is $12 million, your C60 might be $9 million. It's designed to be challenging enough to drive progress but realistic enough to prevent team burnout and failure. Ideally, 80% of your sales reps should be able to hit this target, fostering a culture of success and high morale.

3. The C90 Plan: Your Conservative Safety Net

  • Confidence Level: Approximately 90% chance of achievement.
  • Purpose: This is your critical safety net, a plan you are almost certain to achieve even if market conditions deteriorate or unexpected challenges arise. Its primary role is risk management, ensuring you maintain a healthy burn rate and avoid running out of cash.
  • Application: The C90 plan is an internal tool, not typically shared widely with the sales team. It's your fallback strategy for survival if sales slow significantly or the market shifts unfavorably. For example, if your C60 targets 100% growth, your C90 might plan for a more conservative 70% growth, ensuring the business can still operate effectively.

Why This Framework Is Essential for Founders

This multi-layered approach compels founders to consider a range of scenarios, preparing for both significant upside and potential downturns. Many founders either set overly aggressive targets, leading to team exhaustion, or overly conservative ones, missing valuable growth opportunities. The C10, C60, and C90 framework provides a pragmatic balance between ambition and realism.

By using the C60 plan as the achievable benchmark for most sales reps and the basis for compensation, you cultivate a winning culture. When reps consistently hit their targets, morale remains high, and top talent is retained. Furthermore, the C10 plan serves as an excellent stretch goal, offering substantial bonuses and incentives for exceptional performance that approaches or exceeds this ambitious target.

Ultimately, the C60 plan represents the sweet spot for day-to-day planning and execution. The C10 fuels aspiration and rewards extraordinary success, while the C90 acts as a silent, crucial safeguard for financial stability and risk mitigation.

For more detailed insights into financial planning and sales compensation structures, SaaStr offers additional resources: