Setting Up Compensation Plans for SDRs Effectively

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1. The second mistake is that target numbers are pulled out of thin air, or set based on past top performers. Targets need to be fair, achievable, and easy to track. The target number of opportunities should be based on real data. “That works out to 70 qualified opportunities per year.” If nothing else, you need to consider how much your SDRs are costing you, and what type of return you’re aiming for. Graham suggests somewhere in the range of 6-12x their salary.

   In Outbound goals and targets

2. Designing effective compensation plans for sales development reps “There are two main factors to balance when deciding on compensation plans: benefit to the sales development rep and benefit to the company.” Older commission models compensated reps based on the number of cold calls they made, which was within the rep’s control but produced no real benefit to the company. On the other hand, revenue-based compensation plans often rely on factors outside of the rep’s control.

   In Quota accelerators and decelerators

3. There are two main factors to balance when deciding on compensation plans: benefit to the sales development rep and benefit to the company. “Older commission models compensated reps based on the number of cold calls they made, which was within the rep’s control but produced no real benefit to the company.” Other alternatives include compensation plans based on the number of opportunities (or qualified opportunities) generated.

   In Quota accelerators and decelerators

4. There are two main factors to balance when deciding on compensation plans: benefit to the sales development rep and benefit to the company. “On the other hand, revenue-based compensation plans often rely on factors outside of the rep’s control.” Other alternatives include compensation plans based on the number of opportunities (or qualified opportunities) generated.

   In Quota accelerators and decelerators

5. If SDRs play a large part in your outbound sales process or you have a very short sales cycle, a revenue-based plan might work best. This ensures that compensation is tied to a variable that directly benefits the company. “After the meeting is scheduled, the prospect is handed off to an account executive (AE), and the SDR’s work is done.” In this case, revenue-based compensation plans wouldn’t make sense. The SDRs should be compensated based on the number of opportunities generated instead. One thing to keep in mind with this model is that a larger number of opportunities only benefits the company if they’requalifiedopportunities.

   In SDR and AE operating model

6. In some companies, however, SDRs are only responsible for scheduling meetings. After the meeting is scheduled, the prospect is handed off to an account executive (AE), and the SDR’s work is done. The sales development rep has little control over whether or not the deal closes. “The SDRs should be compensated based on the number of opportunities generated instead.” Stage of growth

   In SDR incentive metrics

7. In some companies, however, SDRs are only responsible for scheduling meetings. After the meeting is scheduled, the prospect is handed off to an account executive (AE), and the SDR’s work is done. The sales development rep has little control over whether or not the deal closes. “In this case, revenue-based compensation plans wouldn’t make sense.” Stage of growth

   In SDR incentive metrics