Kosta_Konfucius

Sales Rep

Different Comp Plans for Start Ups

With my limited knowledge in start ups, I assume the most important thing to grow a business is actually a long term game. Where the worst thing is to lose a large client. I assume for some businesses, the 80/20 rule is 100% true if not more drastic being even more reliant on the top accounts to pay the bills.

First, is my assumption correct?

Second, if its correct....would it make more sense to comp reps to maintain clients more compare to a % of ARR right when the deal is made?

This will cause reps to ask more questions after implementation and making sure its a successful partnership compared to solely looking for an expansion deal. Plus if things do go wrong, reps would be able to provide more info to the product team

💰 Compensation

📠 Startup

🍾 Commission

11 comments

Sort by:

antiASKHOLE

Tycoon

Bravado's Resident Asshole

The answer is yes, but to treat all accounts as temporary revenue. This meaning that at any moment they can leave, so nurture those relationships while having a large focus on new business too. This is why companies have both Sales and Client Success/Account Management.

There is a solid mixture of both. What create true growth for the company, isn't the expansion on current clients/deals, rather the acquisition of new logos to give more examples of service.

UrAssIsSaaS

Arsonist

SaaS Eater

I think this is really industry dependent but ill give my perspective based on my experience. We are series B (ive been here since A) and will do about $15M in revenue this year. We only generate about 15% of our revenue from our largest customers, the other 85% comes from a massive amount of SMBs that use us MoM, so in that situation your theory would not apply.

That does not mean your focus is not correct for other companies, it just wouldnt work for us.

The other point I will make is that as a GTM team, especially for a startup, logo acquisition is critical. You need to get past the point where you are relying on the 80/20 rule and if your AEs are focused solely on retaining/growing the accounts you have, it makes it that much more challenging to bring on new logos.

A good customer success team will retain at a high level and grow accounts, I dont want my AEs focused on that personally.

But again this is all just based on my experience in the industries I have worked and might be entirely wrong for others.

CuriousFox

WR Officer

🦊

@UrAssIsSaaS

DungeonsNDemos

Big Shot

Rolling 20's all day

Are your reps divided between new labels and renewals? Or does each rep manage the accounts they close while also prospecting new ones?
I've done both, and I was paid the same % on both.

Kosta_Konfucius

Politicker

Sales Rep

Were you paid out the same % of the TCV of the renewal or increase in revenue

DungeonsNDemos

Big Shot

Rolling 20's all day

It was paid on TCV of the renewal (though I don't know if this is standard for your industry).

GDO

Politicker

BDM

Most focus on New ARR because the PEs look at this figure the most.

TennisandSales

Politicker

Head Of Sales

so ive worked in a few early stage start ups. the number one thing they care about (IME) is new business.

growth growth growth.

you can get away with poor retention although for profitability, this is key.

But many start ups dont give a SHIT about profitability in the early days.

they need to show investors that they have a model to bring in new business and that this can be scaled.

so honestly, no i dont think this correct.

the shittiest comp plan ive ever had was at a series A.

only paid you when they got paid and HOW they got paid.

$12,000 deal, and is billed monthly? congrats you just closed 12 $1,000 deals. have fun keeping track of all that!

Kosta_Konfucius

Politicker

Sales Rep

Great point!

SaaSam

Politicker

Account Executive

My largest account covered 80% of the company's entire revenue last month. That number has fallen a bit for this month as we've brought on a few other decent sized accounts but they still make up the majority of our revenue.

My comp plan bonuses me on the revenue brought in by this account so long as I hit my number each quarter. It works great as it keeps me fired up to hit my number as well as ensure that my accounts stick around for the long haul.

jefe

Arsonist

🍁

Always a lot of focus on new logo ARR.

Bravado is a community of trusted sales professionals endorsed by their customers.

Products

The War Room Jobs Salary Guide Tech Sales U

Company

About Us How It Works Blog Bug Bounty

Contact

Press Careers

If you are hired as a contract sales rep by a Bravado customer, we may ask you to prove access to the employee email account provided to you by that customer. This data will be shared with customers to track your sales productivity; customers can use this data to confirm you meet the minimum activity requirements to pay out your ramp stipend and commission.

Kosta_Konfucius

Different Comp Plans for Start Ups

11 comments

Related posts

Hardware-as-a-Service Comp Plans

Why do startups comp plans differ so much?