How to do you measure and compensate a rep on Partnership sales?

Our small bootstrapped software startup has benefited tremendously from 2 key reseller partners that were in place before I started. They drive large portions of our revenue and are an excellent technological fit for both parties.


We have been discussing having me focus on expanding to new partners and solidifying this as a key Rev channel.


Since there is no precedent, we are struggling with coming up with a way to measure/ align expectations for this effort and set commission/compensation.


Since partners are not like direct sales, hard to just focus on ARR. it’s obviously much more of an enterprise motion and a relationship that grows over time. There would likely be an account management component where I would be nurturing, training and helping these target partners scale and grow as a reseller.


Trying find out how other Orgs structure their compensation & forecasting with such unknowns.


Here is my rough framework now to incentivize building the right long term relationship that benefits me and the company. Would love to hear if this sounds ridiculous or any feedback on how you have seen something similar structured:


  • Compensatory base salary (already happy with what we agreed upon here)
  • As soon as I bring on a new partner and they close a deal, a 12 month clock starts
  • I am paid 35% of what revenue that new partner sells each quarter for the next 4 quarters
  • After the 1st 12 months, that total year 1 revenue is adding up and locked in as that partner's "baseline" revenue. This is then divided by 4 for a quarterly baseline
  • In every quarter after that first year, I am compensated 25% on ONLY THE GROWTH over and beyond that quarterly baseline


This way I am incentivized to grow these partner accounts but the company is not footing a giant residual commission check for me. They are only paying me on that growth.


Would love to hear your thoughts

👑 Sales Strategy
☁️ Software Tech
💰 Compensation
6
poweredbycaffeine
WR Lieutenant
4
☕️
KISS

Keep it simple stupid.

Are your unit economics, post partner cut of the deal, strong enough to support a 35% commission structure for a year?

Perhaps your company gets 35%, but you are more than likely going to be compensated as a standard rep aka 6-15% on deals depending on partner agreement, deal size, and accelerators.
justadude
Fire Starter
2
The only sales guy
I think this works. I would’ve kept it simple and paid you on ACV for every sale made through a partner you sourced. No more strings, but this structure is not horrible, especially if once onboarded the partners are pretty self sufficient.
Pachacuti
Politicker
1
They call me Daddy, Sales Daddy
My previous company just gave the Partner managers a base + percentage of the deal. And because it was a monthly reoccurring revenue deal they would get a percentage for the life of the deal.
kinempor
0
Account Executive
If you're just bringing new partners, they way I'm incentived is for net-new partners + 100% of resell 6months. 


If you're also supposed to manage those partners, probably want more focus on the resell vs. net new partners.