Article
Compensation for SaaS Sales Organizations
winningbydesign.com
Quoted on this wiki
Every place a page here uses this source, in the order the words come in it.
Model: $900,000 in ARR across 30 deals with an ACV of $30,000 “Compensation: $40,000 base + $40,000 variable” Win ratio: 1 in 5
Linear Model: In this case, the SDR is closing 30 deals per year with a 1:5 win rate (this is the norm in SaaS sales vs. 1:3 in perpetual sales) which equates to 150 leads per year. $40,000 divided by those 150 leads equals $267/SQL, or rather $250/SQL. As the SDR generates 12 SQLs per month, that will equal $3,000 in commission. This also means that for every deal won at an ACV of ~$30,000 at a 1:5 win ratio, you will have to pay for 5 SQLs, which will cost your company $1,250. “it is common to pay an external firm $500 for every meeting generated and $1,000 for every meeting set with a decision-maker.” Accelerated Model: You can use this model to drive behavior toward qualifying the right deals. Plan to spend $1,250 for 5 SQLs since this is what the business model states above, but pay less per SQL. For example, $150 instead of $250 each. That means you will pay $750 total for 5 SQLs @ $150 each, which leaves you with $500 remaining, so you can now pay out $500 for every deal closed. In this case, you end up paying the same amount but drive behavior to identify quality SQLs.
Importantly, the definition of SQL and SAL needs to be clearly defined in either the compensation plan or printed on a poster on the wall of your company where it is clearly visible for all team members to see. Be sure to give examples to your team of what constitutes an SQL, but also remember to give them examples of what does not constitute an SQL. “A junior SDR is often the same as a Marketing Development Rep calling on inbound leads only, whereas the senior SDR is often the same as an Account Development Rep calling on fewer targeted accounts along an ABM campaign.” Split Model: The SDR role is often under pressure because their compensation plans are held accountable against market metrics that frequently reset themselves. Whereas a few years ago, generating 30 to 40 SQLs per SDR per month was quite feasible, today the figures are closer to 10 to 15 SQLs per SDR per month, though this fluctuates with different markets, regions, etc. Due to the lower SQL count, you may follow the model and conclude that you need to compensate your SDR $500 or even $1,000 per SQL, however, such a high value per SQL invites the SDR to take advantage of the model. In such cases, you should split the model by reducing the price per SQL to $200-250, and then adding compensation for productivity in the form of number of emails, calls, event sign-ups, visits to trade show booths, etc.
Account Development Rep Compensation “Account Development Reps (ADR) are different from SDRs in that ADRs focus on key accounts or targeted accounts.” If you have a group of Development Reps, you may have to combine a variety of these tasks across roles and across time. For example, a major annual event such as an industry trade show may influence the way you compensate each role.
Account Development Rep Compensation “They are often responsible for implementing Account-Based Marketing (ABM) campaigns as well.” If you have a group of Development Reps, you may have to combine a variety of these tasks across roles and across time. For example, a major annual event such as an industry trade show may influence the way you compensate each role.
The first step in providing fair compensation to each customer-facing role in your SaaS sales organization is the analysis of the following positions, duties, and experience required by each: “Sales Development Rep (SDR): Prospecting.” Account Executive (AE): Sales Acquisition, also known as a Sales Manager (SM). Positions may range from a first AE job (Junior) to an AE with three to five years of experience (AE), or four to eight years of experience (Senior).
Compensation in Sales Positions “The first step in providing fair compensation to each customer-facing role in your SaaS sales organization is the analysis of the following positions, duties, and experience required by each:” Sales Development Rep (SDR): Prospecting. Positions may range from a first SDR job (Junior) who is focused on inbound sales to a Senior SDR with one to four years of experience who calls on key accounts (Account Development Rep).
The first step in providing fair compensation to each customer-facing role in your SaaS sales organization is the analysis of the following positions, duties, and experience required by each: “Sales Development Rep (SDR): Prospecting.” Account Executive (AE): Sales Acquisition, also known as a Sales Manager (SM). Positions may range from a first AE job (Junior) to an AE with three to five years of experience (AE), or four to eight years of experience (Senior).
The first step in providing fair compensation to each customer-facing role in your SaaS sales organization is the analysis of the following positions, duties, and experience required by each: “Positions may range from a first SDR job (Junior) who is focused on inbound sales to a Senior SDR with one to four years of experience who calls on key accounts (Account Development Rep).” Account Executive (AE): Sales Acquisition, also known as a Sales Manager (SM). Positions may range from a first AE job (Junior) to an AE with three to five years of experience (AE), or four to eight years of experience (Senior).
“Companies should consider how to structure base and variable pay and then set forth the responsibilities of the role and the terms of compensation clearly in a sales incentive plan.” Compensation in Sales Positions
“Every organization should determine the right compensation plan for each individual sales role upfront using a proven target-setting model and a multitude of other factors.” Compensation in Sales Positions
The first step in providing fair compensation to each customer-facing role in your SaaS sales organization is the analysis of the following positions, duties, and experience required by each: “Sales Development Rep (SDR): Prospecting.” Account Executive (AE): Sales Acquisition, also known as a Sales Manager (SM). Positions may range from a first AE job (Junior) to an AE with three to five years of experience (AE), or four to eight years of experience (Senior).
The first step in providing fair compensation to each customer-facing role in your SaaS sales organization is the analysis of the following positions, duties, and experience required by each: “Positions may range from a first SDR job (Junior) who is focused on inbound sales to a Senior SDR with one to four years of experience who calls on key accounts (Account Development Rep).” Account Executive (AE): Sales Acquisition, also known as a Sales Manager (SM). Positions may range from a first AE job (Junior) to an AE with three to five years of experience (AE), or four to eight years of experience (Senior).
“Companies should consider how to structure base and variable pay and then set forth the responsibilities of the role and the terms of compensation clearly in a sales incentive plan.” Compensation in Sales Positions
The first step in providing fair compensation to each customer-facing role in your SaaS sales organization is the analysis of the following positions, duties, and experience required by each: “Positions may range from a first SDR job (Junior) who is focused on inbound sales to a Senior SDR with one to four years of experience who calls on key accounts (Account Development Rep).” Account Executive (AE): Sales Acquisition, also known as a Sales Manager (SM). Positions may range from a first AE job (Junior) to an AE with three to five years of experience (AE), or four to eight years of experience (Senior).