ngtr profile picture
ngtr profile picture

ngtr

Sales

Contributor
Fire Starter
Good Citizen
+1

sales commission vs. referral bonus

for context, my company pays me a base salary + sale commission, but it's only 2% over total revenue.

meanwhile, someone refers a deal to my company and gets 5% over total revenue. while I still need to do the sales part.

my base salary + commission together is nowhere near that 5% cut.

What do you all wizards think and what should I do in this situation?
๐Ÿพ Commission
๐Ÿ˜ค Conflict Resolution
โ˜๏ธ Software Tech
10

28 comments

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TennisandSales
Politicker
3
Head Of Sales
just to clarify, you get 2% of the total revenue of the contract? so if the deal is $100K you get $2k?

and when you say someone refers a deal to your company, you have to close it but you dont get any commission for it?

Very confused on that haha
ngtr
Contributor
0
Sales
Yes 2% of the contract.

And when someone refers a deal, all they do is introducing the prospect to me, I have to close it. I get also 2% out of that contract.
antiASKHOLE
Tycoon
1
Bravado's Resident Asshole
so you get 2% and they get 5%? seems a little jacked..
ngtr
Contributor
0
Sales
the ceo would argue that salespeople already have a base salary ๐Ÿ™ƒ
antiASKHOLE
Tycoon
4
Bravado's Resident Asshole
and their point would be? salespeople don't work in sales for a damn base.

I mean I understand a kickback for the lead/referral, however, their payout should not be greater than the individual closing the deal.

This would be like paying the BDR a higher percentage than the AE when the AE closes the deal.. makes 0 sense.
TennisandSales
Politicker
3
Head Of Sales
hahah yeahhh if thats how the CEO looks at it,.......im OUT of there. terrible.
TennisandSales
Politicker
0
Head Of Sales
hahah FOR SURE!!!!
ngtr
Contributor
0
Sales
I think Iโ€™ll have a talk with the ceo about this issue soon. Thanks everyone!
Sunbunny31
Politicker
3
Sr Sales Executive ๐Ÿฐ
So obviously you're not the only one getting a cut of the contract - your referral partner does, others (such as your manager) do - but 2% seems really low, even if paid on TCV.

Diablo asked if you were aware of this when you joined, and I'm curious too.

What's your OTE % as well? 80/20? (I'm guessing)
ngtr
Contributor
1
Sales
I didnโ€™t. I started out doing something else for the company then later transitioning to sales. At first the 2% was said to be โ€œtoken of appreciationโ€. Then when I officially took on the sales job, they said itโ€™s gonna be 5-15% but that never happened.
Sunbunny31
Politicker
1
Sr Sales Executive ๐Ÿฐ
I take it you donโ€™t have that in writing?

Notwithstanding, it is an excellent time to have that conversation about your compensation and how itโ€™s more than time you got the higher % you were promised.
ngtr
Contributor
1
Sales
my fault really was I liked this company a lot back then, I didnโ€™t quite care much about all the paperwork. I just worked my ass off because I truly enjoyed doing all i can for the company.
Sunbunny31
Politicker
2
Sr Sales Executive ๐Ÿฐ
Itโ€™s a lesson some of us have learned the hard way. The company will never love you as much as you love it. Your efforts are also worthy of compensation. Have the conversation about them providing the % they discussed. Theyโ€™re getting away with it now because they can.
jefe
Arsonist
2
๐Ÿ
That's terribly low :(

Why is the referral partner getting so much more?! Might be a good question to ask.
ngtr
Contributor
1
Sales
This is one of those companies that donโ€™t put much into marketing or BD. Most deals come from referrals.
jefe
Arsonist
1
๐Ÿ
I'd find that extremely frustrating. If a company is running a marketing campaign, the cost of acquisition for that lead shouldn't be anywhere close to your commission payout for closing it.
braintank
Politicker
1
Enterprise Account Executive
If you're the COO change it
ngtr
Contributor
0
Sales
unfortunately thereโ€™s still an ceo
ngtr
Contributor
0
Sales
you also reminded me that i need to change my job title lol
Diablo
Politicker
1
Sr. AE
This is not my company works. Did you know about 2% when you joined the company? Were you happy then?
ngtr
Contributor
0
Sales
I didnโ€™t. I started out doing something else for the company then later transitioning to sales. At first the 2% was said to be โ€œtoken of appreciationโ€. Then when I officially took on the sales job, they said itโ€™s gonna be 5-15% but that never happened.
Gasty
Notable Contributor
1
War Room Community Manager
Ask this dumb question to the CEO: "Am I allowed to get a referral, close it and hence earn 7%?"
SaaSguy
Tycoon
0
Account Executive
2% seems low - are you exclusively closing massive deals?
Salesandcoffeedude
Valued Contributor
0
Business Development Representative
I just found out that my company pays 300-500% more for a referral than their current SDR team.
ngtr
Contributor
0
Sales
dudeโ€ฆ what did you do after you found out?
Salesandcoffeedude
Valued Contributor
0
Business Development Representative
Well. I only found out because I resigned and they called to ask if
Iโ€™d like to stay in touch and theyll pay me $x for any potential leads I send their wayโ€ฆ.I was just like wow - I shouldโ€™ve just done this instead of being a full time SDR - I would actually have made way more money.
WhoDey
Opinionated
0
VP of Sales
That's whack. Can you prove mathematically that your base + 2% is less than the 5% they are paying a referral partner for simply throwing a lead over the fence? If yes, use facts to combat the CEO's faulty logic. If he's not willing to reward you (his employee) more than an external partner, you need to bounce.
CRAG112
Valued Contributor
0
Account Executive
Buys lawnmower when there is no grassโ€ฆโ€ฆ.

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