Sales Leaders: Help Needed w/ comp plan for SMB/Mid-Market SDR role

I am restructuring a sales org for a startup. We're a few years in and ARR is about $4mm, and we're profitable.

Avg revenue per oppt/client: $2,000-$4,000 (largely SMB, some smaller mid-market)

GM: 30%

Base salary: $50-60k

I am considering comping the SDR (largely a lead gen role) in the following ways:

- Paid per qualified lead

- Paid per meeting set for the AE

- Paid for total business closed

- Tiering these components to incent more production

- Combining these to drive incentive across each of these KPIs

Do you have a comp plan that you've had success with that you could share?

Thanks very much!!!

🧢 Sales Management

🏋️‍♀️ Leadership

10 comments

Sort by:

BigShrimpin

Politicker

Account executive

Build the incentive based on the outcome you want e.g. if you want volume of meetings pay per meeting and you can hire someone more junior who isn't going to qualify much before passing onto the AE but if you only want qualified meetings then only pay on meetings the AE marks as a qualified opp and pay a bonus on opportunities over a certain size keep in mind you'd want someone more experienced for this as they'll be able to filter out the garbage up front.
Payment for total business closed is nice in theory but the BDR has 0 control over how much the AE closes and how much that business is worth so while its cool as a bonus kicker of a few 100 when a deal does close it can make the comp plan look very misleading when its tied to something theyre removed entirely from.

jefe

Arsonist

🍁

^^ Really important considerations here.

PeopleDeveloper

Contributor

VP, Sales and Marketing

This is helpful, thanks. I searched some older threads and saw recommendations on comp for each meeting set etc, so I think I'm good. Appreciate you chiming in.

Founding BDR

This is a good point. Frustrating when you have no control past the initial call

Revenue_Rambo

Politicker

Director, Revenue Enablement

Whichever behavior pays the most is what you will get from your reps. Typically this will fall into 3 buckets:

- Activity (calls, emails)
- Meetings booked
- Pipeline (meetings that are converted to workable sales opps)

Heavy incentive on activity can translate to huge amount of dials and spam volume of emails, but no engagement.

Heavy on pipeline, may drive down activity but gives that sales team higher quality leads.

Of the total variable comp just apply a portion to each (10/30/60 would be slant to pipe gen).

I agree with @BigShrimpin that these roles have little ability to influent an close once it’s in the hands of the AE. Bonuses are a good way to offset of certain minimum criteria like ACV are met.

CuriousFox

WR Officer

🦊

You complete me

Founding BDR

Not a sales leader but as a BDR I can say I book more quality meetings when I’m being paid for more closed deals. Seen a lot of my colleagues book some questionable meetings when that was the main driving factor behind their comp. Found that in general, a healthy balance across a few factors is the best way to go.

Pachacuti

Politicker

They call me Daddy, Sales Daddy

sound reasoning.

PeopleDeveloper

Contributor

VP, Sales and Marketing

Thanks, all. Appreciate the input!

Founder and Lead RevOps Consultant

The road to layoffs is paved with unqualified meetings.

I’d say you’d probably want to minimize how much money you’re shoveling into vanity KPIs.

My main client is a service-based agency that drives $3M ARR and he’s had to scrap commissions entirely. The problem he had was that his sales guys were negotiating pricing down to close deals and get their commissions, but the clients they closed were a bad fit / unprofitable.

Not sure what your business model is, but if you’ve only got $4M revenue to work with, I’d say you should aim to incentivize fewer, higher quality meetings that lead to higher LTV (because they’re better qualified and more likely to stick around).

Not sure if building a full-cycle role that works closely with Marketing is an option — or if you even have a dedicated marketing department — but it might be a good solution.