% Commission - why is there such a huge range?

Question

Yo savages - this question is directed to the CEOs, CROs and VP of Sales out there - who can actually explain to me why is there such a huge variation in comp plan pay out. I have worked for companies that pay 5-7% on ARR and others that pay teens and you can reach 20+% with accelerators. Granted deal sizes are different, but conceptually why such a huge difference. If you are willing to pay someone lets say 10% on revenue, why would it matter if it is for 20 $50k deals or one $1M?

Accepted Answer

So many variables. Industry, sales cycle, profit margin, arr or one and dones. Sadly, you can't really tell if you negotiated the best comp plan until you're in the job.

Answer

It's affected by a myriad of factors. Generally, lower the CAC higher the margins. Higher margins afford more money to be spread around in commission. It also depends on compensation across the org. Do you get the entire commission pie, or is it spread between you, your BDR, your manager and your VP?

Hannibal

% Commission - why is there such a huge range?

3 comments

Hannibal

% Commission - why is there such a huge range?

3 comments

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