Inside Sales Compensation & Incentives Best Practices

Inside Sales Compensation & Incentive Best Practices

Learn –Share -Network

04/07/23 2

Agenda

• Research & Statistics• Select Best Practices• Open Forum

04/07/23 3

Organizational Stages

Source: Chally Group, Principles of Sales Compensation

04/07/23 4

Sales Skills by Stage


04/07/23 5

Comp Recommendations by Stage


04/07/23 6

Plan Detail by Stage


04/07/23 7

National Inside Sales Data

Source: PayScale.com

04/07/23 8

SaaS Inside Sales Compensation

Source: Bridge Group Inc, Inside Sales for SaaS Companies Metrics & Compensation

04/07/23 9

Quota Basis


04/07/23 10

Quota Achievement


04/07/23 11

Account Team Comp Plan Sample• This group calls on low dollar renewals, calls to close Forced

Free Trials ($250-$400 subscriptions) and attempts to cross-sell other products in 1-2 calls.

• Base: $10-$13/hour (Please note this group is in Penticton, BC – adjust for market)

Task Monthly Goal/Quota Commission

FFT's 20 sales/ $7500 revenue $25 flat/sale

Renewals 3% of Annual Revenue Cross-sell $2,000 10% subscription rev & 8% single sale

Source: Bongarde Safety via Joyce Juntunen, Director of Sales & Service

04/07/23 12

Account Manager Comp Plan Sample

• Each AM manages approx. $800K-$1 Million book and is responsible for customer on boarding, training, engagement, renewal, up sell, cross-sell to existing book

• Base: $40K-$55K per year depending on tenure • Target at 100%: $60K-$75K• Must sell 75% of cross-sell quota to earn commissions

Task Monthly Goal/Quota Commission Renewals - SaaS $75,000 2% of last year's revenue Renewals - Other $5,000 3% Cross-sell/Price Increases $10,000

10% subscription rev & 8% single sale, 14%/10% if revenue over $20,000 for the month

Quarterly Bonus

Renewal - SaaS Based on renewal % achievement 1%-4% of last year's revenue due to expire in that quarter


04/07/23 13

AE Comp Plan Sample• Acquisition Sales, No renewal responsibility. May include some outside

sales as needed. Selling SaaS, online and print subscriptions as well as transactional sales.

• Base: $40K-$50K per year• Target at 100%: $65K-$75K• Target at 125%: $95K• Must sell 75% of quota to earn commissions

Task Monthly Goal/Quota Commission

New Revenue $20,000 Subscriptions: 8%-17% Single Sales: 5%-10% depending on quota attainment


04/07/23 14

Bonus Plan Sample• B.E.S.T. Bonus – Every month that the AE achieves 150% of

quota, and additional 1% of revenue is set aside and paid out in December as a bonus

• Bonuses – All employees are eligible for annual bonus based on company performance against goals. Based on individual goals attainment and management discretion, employees can earn 0-300% of target.

Position Target Bonus Accounts Team $500 Account Manager $2,000 Account Executive $2,000


04/07/23 15

“The Boiler”• Very Low base (10 per hour)(12 per hour at senior)• Increasing commission rate based upon quantity of sales that happened that week only 8, 10, 12, 14%• Monthly contests for low-cost electronics and sports tickets• New Account targets were assigned• Renewal Customer Accounts were assigned and paid the same• Pros• Low payout for non-producers• Extremely performance based• Rewards only producers• High sense of urgency for reps to be productive every minute• Easy to distinguish performers• Inexpensive model• Cons• Hard to recruit candidates• High burn out rate• High unplanned turnover• High performers rarely stayed beyond 12 months• Became a farm team of employees for other companies to poach• Undefined territories

Source: James Gallagher, ValueVine

04/07/23 16

“Classic Hunter + Farmer”• Medium base ($30,000 base)• Fixed commission rate of • 10% for new accounts• 5% for renewal accounts• quarterly contests for bonuses and bragging rights• New Accounts were a free for all in the CRM (claim only up to 300) Renewal accounts were your own from the prior year• Pros• still payout for non-producers• Bigger rewards for producers but more balanced• Very performance based• Medium sense of urgency for reps to be productive • Easy to distinguish performers• Reasonably inexpensive model • Cons• Medium burn out rate• Medium unplanned turnover• High performers did not stay beyond 24 months• Undefined territories


04/07/23 17

“Shared Inside/Outside”• Medium-High base ($55,000 base)• Fixed commission rate of • 8% for inside sales 15% for outside sales rep• no contests other than president’s club (150% of quota)• accounts were assigned by geographic territory and teamed with 1 inside and 1 outside• Renewal accounts were your own from the prior year• Pros• still payout for non-producers• Bigger rewards for producers but balanced• Very performance based• Medium sense of urgency for reps to be productive • Each pairing is accountable to one another• Very defined territories• Low burn out rate• Low unplanned turnover• High performers stayed several years• Cons• Expensive model• Harder to distinguish performers• If inside rep underperformed it effected the outside rep• If the outside rep underperformed it effected the inside rep• No way to tell how much geography plays into performance• Underperformers were continually let go and replaced every 6 months Source: James Gallagher, ValueVine

04/07/23 18

“Hunter Only”• Medium base ($50,000 base)• Commission rates with accelerators based on achievement • 8%-14% for new accounts• same commission rates for up-sells• 0% for sale-size renewal accounts• quarterly contests for bonuses and bragging rights• New Accounts were a free for all in the CRM, plus 100 marquis targets (claim only up to 250 at a time and then work those)• Renewal accounts were your own from the prior year• Pros• some payout for non-producers• Bigger rewards for producers • Performance based and retainment based• Medium sense of urgency for reps to be productive • Easy to distinguish performers• low burn out rate• low unplanned turnover• High performers stayed as long as they were getting paid• Cons• More expensive than other models• Need to create sense of urgency through culture• Undefined territories Source: James Gallagher, ValueVine

04/07/23 19

“Appointment Setter”• low base ($15 per hour) 20 to 25 hours per week max• bonuses for appts set• $30 each for first seven in 2 weeks, $60 each for eight or more in those two weeks• addtl $100 bonus for deals closed that were your appt• Assigned Accounts in the CRM (400 max at a time)• Pros• Very low payout for non-producers• nice rewards for producers • Performance based • high sense of urgency for reps to be productive every week• Easy to distinguish performers• Less expensive model• Natural sense of urgency• Cons• Hard to recruit candidates• high burn out rate• high unplanned turnover• High performers stayed up to a maximum of 10-12 months


04/07/23 20

04/07/23 21

04/07/23 22

Upcoming Events• Wednesday, May 25– AA-ISP Seattle Chapter Happy Hour

• Lot No 3 in Bellevue, 5:30 – 7:30 p.m.

• Wednesday, June 15– AA-ISP Seattle Chapter Meeting

• Columbia Tower Club in Seattle, 7:30 – 9:00 a.m.

• Questions?– Matt Heinz, Seattle chapter president– [email protected], 877-291-0006

mailto:[email protected]

Business

Inside Sales Compensation & Incentives Best Practices