slingerrr

BDR

I´ve been tasked to help design the commission structure...

Let me give some context.

Last month I was hired by a very small geospatial analytics startup (we´re talking 4 people in TOTAL on the team, including myself). There are basically no systems in place besides the product that they sell.

I knew accepting the offer, the position wouldn´t have many (or any) of the ¨standards¨ that come with a more established company. One of these ¨standards¨ is a previosly established commission structure. This leads me to the topic of designing the commission structure.

I´ll try to give context, but I would appreciate anyone´s advice in terms of what to bring to the table as we design the commission structure:

-They don´t have much data or proven concepts since they were founded this year

-They only have a couple of clients

-They have no set KPIs in terms of outreach, etc

-They have a longer sales cycle: 1-3 months

I know this context is shit, but it´s really all I have to work with. I want to make a commission structure that makes sense, is lucrative, and is something that the boss will want to buy into.

With such little to go on, I imagine the commission structure will ebb and flow as we get more experince and sell to more people. However, we (and myself, as the only salesperson) need a structure so that there is incentive to sell and bring business that will hopefully help take this startup somewhere that isn´t the firey inferno.

I´d love everyone´s thoughts and advice about how to approach this: any recomendable structures for this scenario? any strucutres to avoid? If you were in my situtaion, what would YOU recommend to my boss?

Thanks

💰 Compensation

4

16 comments

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TennisandSales

Politicker

3

Head Of Sales

starting from the bottom lets go!
Are you talking about commission plan for SDR or AE?

Things to avoid:
1. having a quota: it should not be needed at this stage and there is NO WAY to make it with any sort of confidence.

If this is for SDRs:
1. they should be paid on meetings that are kept. Not qualified meetings.
With the company being so new there is more value in quantity of meetings. To test language and get feedback as fast as possible.
2. They should not have a quota. because, how can they.
3. Id love others inout on how much per meeting. since idk what that looks like these days. but i would make it aggressive!

If this is for AEs

1. there should be no quota!
2. they should get a straight % of Total contract value. Make it aggressive too! This will incentivize more deals even without a quota. and since you have no idea what is possible, its hard to know where to have accelerators so make sure the commission % is solid where its not that big of a deal.

slingerrr

Contributor

0

BDR

Yeah I should’ve been more clear. It’s for an SDR role. Thanks for clarifying.

But the thing is that everything is so fluid that I could move into more of a closing role in the coming months. Thus, the need for potentially two structures.

I agree about the quota. They’re so young that there’s no benchmarks or anything.

I’d also love to see what others think about inout per meeting for SDR and for the straight % for AE.

Would 250 per meeting be too aggressive?
And 40% straight commission for AE be too aggressive?

I’ve got no idea on the numbers side of things for this. My last job was straight commission based off of what you sold.

TennisandSales

Politicker

1

Head Of Sales

yes those numbers would be REALLY aggressive, (especially on the AE side. )and probably not make sense when the CFO is looking at CAC (customer acquisition cost)

but idk if $150 per meeting would to far off.

commission for AE I was thinking 15-20%

slingerrr

Contributor

1

BDR

When you said aggressive I went AGGRESSIVE haha…you can always go lower, but it’s harder to raise it back up.

I think those numbers are pretty fair

$150
15-20%

Thanks for your insight @TennisandSales

TennisandSales

Politicker

1

Head Of Sales

haha very true! Its harder to increase the number. I would just expect to have a conversation with the CFO (or the CEO about profitability, if they care about that.)

slingerrr

Contributor

1

BDR

Indeed. I’ll prepare my notes ;). Thanks again

CatMom

Politicker

2

Account Executive

Yeah ours is $100 per meeting and if they get x number of meetings a month after they hit the threshold it’s $150 per meeting. Not really a quota. More of a multiplier. AEs are structured the same. 9% and then if they sell a certain amount, everything over that amount (per month) is 13%. Hope that helps! Bases are pretty high so normally I’d say these numbers are a little low but considering base is high it kinda evens out.

slingerrr

Contributor

2

BDR

Makes sense these numbers. I like the idea of multipliers that act as a “quota”. Thanks for your thoughts

Pachacuti

Politicker

1

They call me Daddy, Sales Daddy

What type of compensation structure are you looking at - high base/low variable, low base/high variable, 50/50? What's the avg deal size? Whats the avg base salary of the sales team & targeted OTE? Do you want to incentivize overacheivement?

slingerrr

Contributor

1

BDR

That’s the thing. The company is essentially starting from zero. I’m the first person they’ve hired in sales. There’s no commission structure or anything set out.

@TennisandSales made some great points about them being to early to have quota, setting a fixed number for appts set by SDRs and a fixed commission for AE.

Beyond that they’ve got 2 customers worth around 40k between the both of them.

Since there’s a lot of experimentation going on it’s tough to know what’ll work and what won’t. The important thing is to get something decent in place and see how it adapts.

But 100% incentivize overachievement$$$$$

Pachacuti

Politicker

2

They call me Daddy, Sales Daddy

Yah, I would recommend a fixed amount for meeting/demo and a fixed % for AE sales. Keep it simple.

slingerrr

Contributor

0

BDR

Agreed. Any thoughts on fixed amounts for both positions, from your experience?

Pachacuti

Politicker

1

They call me Daddy, Sales Daddy

I don’t know what your solution costs, etc. so hard to give you a figure.

slingerrr

Contributor

0

BDR

Very fair. Thanks for your insights

CuriousFox

WR Officer

0

🦊

How'd this go btw?

slingerrr

Contributor

1

BDR

Turns out there were (and are) still much bigger issues to iron out with the company:

-No clear value proposition

-No confirmed ICP (thus prospecting in an industry with no data to back it up)

-CEO isn’t selling (she has the most experience in this industry)

-No enablement (basic level crm that doesn’t even allow for email automation / sequences; no plan for lead generation to have accounts to reach out to)

-Zero cash flow to invest in anything that will aid in pushing this thing along (have been waiting for an investment round for months)

———-

When I first posted, I thought that the commission structure was a big priority lol. My naiveness clouded me from seeing the things that will keep me from even touching commission…

I’m trying to figure out what to do with this company because I’m working for them in a different country and they’re sponsoring a visa where they’re based, so if I stop working with them I’d have to go back to the US… (if I started working for this company in the states I would’ve left after a month because of how little is established)

Trying to keep my composure and wait for a breakthrough (I have no experience with startups so I have no idea if this company will end up being a dud)

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