echoapex50

Account Excutive

Comp Plan Question

I just started working for an early stage startup within the property management software space as an Account Excutive and my comisssion is 10% of all revenue generated from the deals I close (my contract states that and does not specify revenue from what). After joining, I was told that the 10% of revenue from deals that make up my commission does not include the one-time onboarding fees we charge for new clients to migrate into our platform and is only of MRR. This is not set in stone as ongoing conversations will be had. Is it normal to not be paid out on onboarding fee? Also, is 10% a standard percentage of commission (I understand this can vary greatly, just looking for ballpark)? Lastly, what would be a best practice response or solution to ensure I get paid out on the onboarding fee as well?

🧠 Advice

🍾 Commission

😜 contracts

15 comments

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poweredbycaffeine

WR Lieutenant

☕️

This is 100% normal and should be the case. There is such a tight margin on onboarding services that it doesn’t make sense to comp on a fee like that.

I’ve had anywhere from 6-12% depending on ACV, net-new vs upsell/renewal, multi-year deals, etc.

jefe

Arsonist

🍁

Co-signing the normality of this.

oldcloser

Arsonist

💀

100% normie

jefe

Arsonist

🍁

LambyCorn

Arsonist

A mfkn E

Legend

NoToBANT

Catalyst

Senior Account Executive

100% normal. They shouldn’t pay for onboarding fee

10% sounds just about right to be honest.

Maybe you could ask if you could get paid a fee on multi-year deals

FinanceEngineer

Politicker

Sr Director, sales and partnerships

That tracks as the onboarding is almost fully costed, so probably losing money on it. I would assume the 10 % on the product for the ARR value makes sense. Might be more for a multiple year deal.

poweredbycaffeine

WR Lieutenant

☕️

Usually less for a multi. First year 10, second 8, third 6, etc. Reason is to buy down risk on churn or downgrades.

FinanceEngineer

Politicker

Sr Director, sales and partnerships

Depends on how it’s framed by management. I’ve seen 1.25x to 1.5x for a 3 or 5 year deal in year 1, so you get the cash right away. Since renewals might be with another team by the time it comes around again.

poweredbycaffeine

WR Lieutenant

☕️

In my scenario you get paid all at once but the value is lower on the subsequent years.

$100k deal

$10k
$8k
$6k

Total commission: $24k paid up front.

FinanceEngineer

Politicker

Sr Director, sales and partnerships

Nice multiple.

poweredbycaffeine

WR Lieutenant

☕️

To be clear this isn’t my current comp plan, but one for a mid-ACV company I ran RevOps for. Reps had fairly high quotas and had immediate refinement, resulting in wild deal flow…but they consumed 40% of the TAM in a quarter which was freighting.

TennisandSales

Politicker

Head Of Sales

yeah this is common. most companies dont make money on services like implementation or onboarding so paying sales people on that is hard.

10% seems fair. the only thing i would look at would be an accelerator to get that % up to 12 or 15% if you close a certain amount of business in a year, or a certain % above quota.

LambyCorn

Arsonist

A mfkn E

Damn son my comish is 3.3% and next quarter its going down to 2.3%... then its jumping up to 4.4% in Q1 and back to 3.3 for Q2 and Q3 - saas

lowhangersalesbanger

Politicker

Account Executive

That all sounds kosher to me