PostHog Handbook Library / Growth

2,998 words. Estimated reading time: 14 min.

# How we work

Auto TL;DR

## At a Glance

This long page covers these main areas. The list is generated from the article headings, so it updates with every handbook rebuild.

1. Roles
2. Technical Account Managers
3. TAM At Risk Accounts review meeting
4. Coming off an account
5. How commission works Technical Account Managers
6. TAM book of business rules
7. Team lead quota
8. Travel to see customers

> This page covers more of the operational detail of how the Technical Account Manager team generally works - for a broader overview of roles and responsibilities, visit the overview page. If you're looking for how the New Business Sales team (Technical Account Executives and BDRs) works, see their How we work page.

### Roles

We have three types of roles:

- Technical Account Executives - closing new business from inbound and outbound leads and expanding their usage of PostHog in the next 12 months
- Technical Account Managers - expansion from existing customers, closing new business from product-led leads
- Business Development Reps, aka BDRs - generating leads for new business, including via cold outbound

#### Technical Account Managers

Each TAM is assigned 15 existing customer accounts representing $1.5M to $2M. See TAM book balance for the full composition targets. Additionally, you will manage inbound leads as they are assigned to you in your territory. Overall, the hard cap on existing book + new leads is 25 accounts, so staying extremely focused is important.

We use the "AM Managed" Segment in Vitally to show that an account is part of somebody's book of business and therefore included in individual and team quota calculations. AMs should not assign this themselves (that's up to Simon or Ben), but can add themselves as the Account Executive in Vitally to make it easier to track things you're working on.

For Product-led leads we will only add them to your book for quota purposes if you have a solid plan in place for conversion to prepaid credit or cross-product adoption. Account Owners can use the "Leads" Segment in Vitally to separately track these from the main managed book.

At the end of each quarter we will review your accounts and look to hand off some to bring your focus account list back down to 10. Simon and Ben will also review everyone's accounts each month proactively to make sure that the balance of accounts across the team makes sense.

##### TAM At-Risk Accounts review meeting

In addition to the weekly sprint planning meeting on a Monday, we do a weekly territory review standup on Wednesday. A Technical AM is picked at random and runs through the following for each customer in their book of business in Vitally:

1. Rate your relationship with them (no connection yet/made contact/answering their questions in Slack/trusted advisor)
2. What's your next step with that customer (annual plan, cross-sell etc).
3. Are they a churn risk and why?

> The objective of the meeting is to hold each other to account, provide direct feedback, and also support each other. It is a great place to ask for help from the team with thorny problems - you should not let your teammates fail.

#### Coming off an account

The CSM stays on every $20k+ account, so there's no handoff when a TAM's work is done. The account just moves to CSM-only coverage. When and how to come off, and what context needs to land with the CSM first, is covered in Removing a TAM from an account. Use the saturation checks to make the case, and talk it through with your team lead.

> A customer being negative/difficult to work with isn't a reason to come off an account. It's your job to turn them around to being a happy customer (AKA be their favorite).

### How commission works - Technical Account Managers

General principles

- We want to align incentives - TAMs get paid when PostHog gets paid
- 100% quota attainment leads to a 50/50 of OTE and Commission split
- TAMs cover 5x their OTE with their quota

> This plan, including the OTE to quota ratio, is likely to change as we scale up the size and complexity of our sales machine! For example, the rate plan will be reviewed when median book cash exceeds 5x OTE. This is completely normal - we will ensure everyone is treated fairly. For now we are generally trying to optimize for something straightforward here so it’s easy for PostHog (and you) to calculate commission.

How we calculate

- Quota is calculated annually, and is paid out quarterly
- A deal counts toward quota in the quarter of its effective date. For annual deals, the effective date is the contract start date or the signature date, whichever is later. For monthly accounts, each payment counts toward the quarter it falls in.
- Because the signature date sets the floor, a deal can never be credited to a quarter that has already closed, even if its contract start was backdated to align with the customer's current billing period.
- The Commission rate is 10% flat and uncapped, regardless of whether it is monthly or annual
- There is an additional 6.7% incentive on net-new annual contracts
- There is also an additional 6.7% incentive on growth in annual renewals
- There is no additional incentive on monthly payments
- An account counts toward your quota only from the date it is added to your book (when the `AM Managed` segment is applied). Cash paid before that date does not count toward commission, even if it lands in the current quarter. We don't pay retroactively on an account that wasn't yet in your book.

Examples Ator, the TAM has a book account that pays month to month. In the quarter, that account makes 3 payments of $2,200, $2,100, and $2,500 totaling $6,800. The quota realized and paid out to Ator on this account is 10% of the total for that quarter, $680.

Ator has another book account that he lands on an annual credit purchase that quarter. The first month of the quarter, they paid $8,000 and then they signed an annual credit purchase for $142,857.15 in credits. After discount, they paid PostHog $100,000. Ator realizes:

- $10,000 in quota from the 10% on the cash paid
- $6,700 in quota from the 6.7% incentive to balance out the annual discount
- $800 from their single monthly payment that quarter

Ator is paid a total of $17,500 for that account that quarter.

Ator has (yet) another book account coming up for renewal. Last year, that account spent $100,000 with PostHog. This year, they are increasing their annual credit purchase to $171,428.57. After discount, they pay PostHog $120,000. Ator realizes:

- $12,000 in quota from the 10% on the cash paid
- $1,340 in quota from the 6.7% incentive on the increase over last year

Ator is paid a total of $13,340 for this account.

Effective date example A customer's billing period runs June 23 to July 23. The TAM signs the annual deal on July 20 and the contract start is set to June 23. The effective date is July 20, the later of the two, so the deal counts toward Q3 rather than the already-closed Q2.

Situations where PostHog credits a customer due to circumstances outside of the TAM's control will be handled on a case by case basis.

During ramp

For your first three months you carry a full quota, not a reduced ramp quota. You are guaranteed 100% of your OTE as a floor, so a slow start won't cost you. In each ramp period you are paid the higher of that floor or the commission you earn on net new business you personally close. You do not get the floor and commission on top of it.

Deals a previous owner signed (including ones with a future-dated start that lands in your ramp quarter) do not count toward ramp commission. The floor already covers you while you build. See the new hire FAQ for how the floor is prorated by start date.

#### TAM book of business rules

1. Only accounts with the `AM Managed` segment in Vitally will be counted towards your quota. Simon adds this manually after reviewing with you and your team lead.
2. All accounts in the `AM Managed` segment need an account plan in Vitally, which is updated and reviewed with your manager regularly.
3. If you are assigned an account with no previous owner, you have up to 3 months to figure out whether they should be in your book or not. Don't ask for the `AM Managed` segment to be added until you're happy that there is growth potential there.
4. If you are assigned an account with a previous owner, work with them on the handover process. If the customer isn't in a healthy state usage and engagement-wise, feel free to push back and ask for the previous owner's help in getting them to a good state before taking ownership. If you really can't resolve this, then talk first to your team lead. If you can't resolve it, Simon will be the tie breaker. It may be that we need you to work on the account regardless but will treat it as a lead with the same rules as point 3 above.
5. Accounts which you've previously been paid quota on need to stay in your `AM Managed` book until they are handed over as per 3 above, or until they churn/fall below $20K ARR. In this case, we will keep them in the `AM Managed` segment for quota calculation purposes and then remove them after the quarterly calculations are complete.
6. Nominally, you should have around 15 accounts/around $1.5m to $2m ARR in your `AM Managed` book. There is some wiggle room here, but if you find yourself with 25+ accounts, it's unlikely that you'll be able to give them the level of focus we expect from a TAM, so be prepared to rebalance with your team lead. (see TAM book balance).
7. You can have accounts added to your book at any time, if you are comfortable that there is growth potential there. Removal of accounts should only happen at the end of the quarter so that quota can be calculated.
8. If you actively work to reduce a customer's spend with us by optimizing their usage, we may exclude that usage drop from quota calculation. We will review this on a case by case basis but at the very minimum you'll need documented evidence of the work you did to optimize their usage before it dropped. This should first be reviewed with your team lead who will then ask for approval from Simon. To make the process easier, drop the details of your optimizations as a note on the customer record in Vitally.
9. We want you to ensure the customer has paid, and we don't want AMs to throw invoice chasing to a finance person. This means you should make friends with the finance person on the customer's side, and ensure all payment paperwork is in order to allow for the customer to pay. You should make the failed/late payment process clear to your customer, especially in the case of a severely delayed payment.

> We have a bunch of accounts where they are declining for reasons that have nothing to do with a TAM’s actions. We also have a bunch where they are growing in the same way. These even each other out in the bigger picture of hundreds of accounts, if anything in favor of the latter. If they fit the criteria for having a TAM assigned, you should be prepared to continue to manage both types of customers in your book, as churn prevention is a key part of the TAM role too.

### Team lead quota

From your first full quarter as a team lead in Sales, you will move to a 60% base 40% commission split in reflection of your new player/coach role. This will be based on your team's quota attainment although you will still have your own individual quota target.

> Your individual quota will be lower than others in the team as you'll be spending more time on managing the team, but we still want you to demonstrate the sales individual contributor skills to your team. You should aim for 80% team management, 20% IC work, and the quota will reflect that.

To calculate the team quota, we combine the quota of all team members with proration applied if they are still ramping:

- For fully ramped team members we add 100% of their quota to the team quota.
- For team members who begin the quarter still in their first three months in the role we add 50% of their quota to the team quota.

Example: With a flat quota of $250,000 and 3 fully ramped people, and 1 ramping, the team quota would be $875,000 (($250,000 * 3) + $125,000)

> If someone leaves the team, we may recalculate the team quota depending on how their accounts and opportunities are reallocated to others in the team. If someone joins the team, we don't change the team target, and don't count their contribution towards the existing target, to keep it simple.

### Travel to see customers

You are likely to need to travel a lot more than the typical PostHog team member in order to meet customers. Please make sure that you follow our company travel policy and act in PostHog's best interests. We trust you to do the right thing here and won't pre-approve your travel plans, but we do keep track of what people are spending and the Ops team will follow up with you if it looks like you are wasting money here. We are not a giant company that pays for fancy flights, accommodation, and meals so please be sensible.

As a TAM, we want you to get in front of customers in person on a regular cadence. As a baseline:

- Visit local customers (those near you) once a quarter. If a customer is within easy travelling distance, it's a great opportunity to see them regularly. Even if they aren't directly your customer, showing up with donuts helps develop strong relationships.
- Visit your big customers twice a year. Your largest accounts warrant more face time, so plan to see them at least twice a year even if they aren't local to you.
- Visit your closest tech hub (SF, London, etc.) once a year. A lot of customers and prospects cluster around major tech hubs, so make a point of getting to the one nearest you at least annually and stacking up meetings while you're there.

These are guidelines, not limits — if it makes sense to see a customer more often, do it. Use your judgement, be sensible with spend, and prioritize the trips that will have the biggest impact on retention and expansion. As a general rule, larger customers justify more regular visits.

### Working with engineering teams

We hire Technical AEs. This means you are responsible for dealing with the vast majority of product queries from your customers. However, we still work closely with engineering teams!

Product requests from large customers

Sometimes an existing or potential customer may ask us to fix an issue or build new features. These can vary hugely in size and complexity. A few things to bear in mind:

- Engineers at PostHog talk to customers. It's much better to bring engineers onto calls to speak to a large customer to talk to them directly than just do the call yourself and copy and paste notes back and forth. This is especially useful if a) the team was already considering building the feature at some point, b) it's an interesting new use case, or c) the customer is really unhappy for valid reasons and could churn.
- Provide as much internal context as you can. If a customer sends a one-liner in Slack, don't just copy and paste into a product team's channel - find out as much as you reasonably can first, ask clarifying questions up front etc. Otherwise the relevant team will just ask you to do this anyway.
- We already have principles for how we build for big customers - if you have a big customer with a niche use case that isn't applicable to anyone else, you should assume we won't build for them (don't be mad!)

Finally, if you are bringing engineers onto a call, brief them first - what is the call about, who will be there. And then afterwards, summarize what you talked about. This goes a long way to ensuring sales <\> engineering happiness.

Complicated technical questions

You will run into questions that you don't know the answer to from time to time - this is ok! Some principles here:

- Try to solve your own problems. Deep dive the docs, ask PostHog AI, ask the rest of the sales team first - a bit of digging is a valuable opportunity for you to learn.
- Similar to the above, don't just copy and paste questions from Slack with no context. Add some commentary - 'they have asked X, their use case is generally Y, I think the answer might be Z - is that right?'. Do some of the lifting here, rather than putting all the mental load on an engineering team.
- If you open a ticket in PostHog Support and know which team the ticket needs to go to, assign the ticket to that team so that it bypasses support and goes straight to them.

### Working with customers in Slack

Most of our customers use Slack, and it's a great way for us to be responsive to them. Qualifying customers and prospects can get a shared Slack channel, and you should set one up as early as it makes sense in your relationship with them.

We share channels via Slack Connect and add SupportHog so that both PostHog and the customer can raise support tickets directly from a Slack thread — react with the :ticket: emoji or mention `@SupportHog`. This syncs the conversation into PostHog Support so our Support and Engineering teams can work on customer issues in a familiar context.

See Shared Slack channels with customers for the full setup steps, including channel naming, who to invite, and how to support customers who use MS Teams instead.

> It's your job to ensure your customer issues are resolved, make sure you follow up with Support and Engineering if you feel like the issue isn't getting the right level of attention.

Canonical URL: https://posthog.com/handbook/growth/sales/how-we-work

GitHub source: contents/handbook/growth/sales/how-we-work.md

Content hash: `b089f8ef03301d3f`