ABX

Account Executive

Why do SaaS companies build SDR compensation around "appointments set"?

In my previous AE role, my company built SDR compensation around "appointments set".

They called it "opportunities created", but since AEs couldn't disqualify appointments: it's effectively the same thing. The down-steam impact was that every appointment is a good appointment deserving a 30 minute presentation and then weekly follow-up (and managerial syncs) for the next 3 months. This seemed to cause such a glut in sales pipeline that most AEs lasted about 6-9 months, which is the exact amount of time it takes to have an SDR fill your Salesforce pipeline with so many "opportunities" that AE's would often lose visibility into what was an actual opportunity.

I'd have syncs with my manager asking me about "opportunities" where I'm biting my tongue thinking "oh, right, this is the account that had no decision maker or buying power but my SDR said they thought our platform was cool." to which my manger would reply "circle back in a week?"

I thought that my experience was unique until I just listened to a podcast by a sales comp SaaS company where the co-founder said that appointments set is a great KPI for scaling SDR teams.

How is this seen as an effective way of building a compensation plan? I understand conceptually it's done to build an SDR team that's not solely reliant on sales success, but in practice it appears to be chasing growth at the expense of sales churn.

Can this actually be done in a way that doesn't hamstring sales effectiveness?

💰 Compensation

🧢 Sales Management

🗝 Sales Enablement

16

18 comments

Sort by:

TennisandSales

Politicker

5

Head Of Sales

this is such garbage. so SDRs can just put WHAT EVER type of meeting on your calendar and you HAVE to keep it in your pipeline?

that sucks.

I think SDR teams need to be reevaluated all together.

back in the day SDR teams were effective because ppl did not have access to so much info and relied on sales ppl to learn about products.

NOW, way more companies make buying decisions before talking to sales. they talk to peers, look at communities, look at review sites all BEFORE talking to sales.

so SDRs alot of the times end up being used completely wrong and mess things up.

Arzola

Valued Contributor

-1

Business administration

This information is worth gold

jefe

Arsonist

4

🍁

It makes sense to comp on qualified meetings set, but not allowing the AE to disqualify makes NO sense at all.

It just bogs them down and reduces revenue generating activity.

Sunbunny31

Politicker

2

Sr Sales Executive 🐰

Exactly so. It's bad for the company - and clearly burns out the reps.

Also, why is SALES management not recognizing crap as crap? "Follow up next week?" is not the best suggestion. "Disqualify it and get it out of your line" is much better.

jefe

Arsonist

2

🍁

It's really not in their best interest to close their eyes to this problem. Unless their comp structure incentivizes 'appointments' over revenue, which would be ridiculous.

Sunbunny31

Politicker

1

Sr Sales Executive 🐰

Right. It doesn’t make sense.

Sunbunny31

Politicker

2

Sr Sales Executive 🐰

My BDRs get paid on sqls - and we can reject unqualified leads before we meet with them. Win/win.

SaaSsy

Politicker

2

AE

Ohh I have been there - such a lazy way for sales leadership to “brag” about growth in pipeline/demos. It takes only a few short months to suddenly realize that lots of meetings and no closes doesn’t get the job done.

BourbonKing

Valued Contributor

2

VP of Sales

Why do they comp SDR's for "appointments set"? Because it's a simple metric to track and report on, and the folks writing the comp plans either don't understand sales or are lazy. Folks in RevOps, Finance & Marketing see "leads sent" and "appointments set" as the holy grail. They have no concept of "quality" vs. "quantity".

Obviously, the real holy grail is more "quantity" of "quality" leads/appointments. SDR's should be comped on both: 30% of their commissions on appointments set and 70% on

appointments setthat are qualified by the seller and go into sales process.

antiASKHOLE

Tycoon

1

Bravado's Resident Asshole

As a BDR, I just got paid on Revenue closed. rarely would we ever get compensated on the appts scheduled unless there was a Spif of some kind. This lead to more quality leads.

VFG

Good Citizen

1

SDR

The best way to compensate BDR’s is qualified shows. You set up very specific criteria for the ICP, and you make sure they show up and actually agreed to the appointment. From there, it’s on the AE.

Diablo

Politicker

1

Sr. AE

We had Sales qualified and Accepted leads in one of the companies I worked long time back. I used to get paid on Accepted leads - only when the AE found the leads to be a fit

BlueJays2591

Politicker

0

Federal Business Dev Director

We have set criteria for opportunities being created and it's only 1/3 of the points allowed. 2/3 comes from an AE progressing it to a qualified stage and actually wanting to run with it. Helps mitigate shit meetings. Rarely do we have a quality issue. Seems like your company is going for more at bats instead of more qualified pipe. More at bats is for a newer solution or smaller company.

abracadabra

Personal Narrative

0

Enterprise Account Executive

This sounds like an organization that just mis-manages their SDR resource. Generally there are a few ways to get 'qualified' meetings vs meetings (and measure Appointments set based on conversion). So a couple examples:
1. Pay SDRS on qualified meetings (ie they can verify a basic BANT or you create an AE checklist of 3-4 things they have to learn before they can set a meeting for you)
2. Pay SDRS on all meetings assuming the Conversion rate from Conducted -> Opp stays > 33% (ie of those meetings set, 1/3 is a real/reasonable deal to work). doing the reverse math for most orgs, 1/6 Opps should close (we're assuming 15-20%) but really this number should improve as you get better so we're using bare bones for SDRs. And in reverse generally SDRs need to set 12-15 meets/month = 2 closeable deals from SDR/month. If things start to change in this equation = review SDR qualification process but easiest to measure on the Conduct -> Opp goal staying consistent (maybe even a bonus if it goes to 50%+ etc that way you incentivize toward the right behavior)

Blue_Turtle

Opinionated

0

sdr

Most don’t. My company pays and counts against quota, the number of completed meetings. Basically, the prospect shows up and the demo leads to the creation of an opp in salesforce or is a follow up meeting on a current open opp, but for a purpose. I can’t just book anyone that’s a waste of time or is meeting for no reason. That’s how most companies run the SDR compensation. If your company is effectively just throwing money for meetings set, the people running the place are morons who never sold.

Blue_Turtle

Opinionated

0

sdr

I should also mention, good fit show rate is another metric they track for us. If I barely hit my quota and have a GFSR of 10% then something is way off. 50% is the typical cutoff point because of all the demos an SDR sets about half will actually show up in a typical lifecycle.

HappyGilmore

Politicker

0

Account Executive

As an SDR back in the day, there was more weight set on meetings that converted to qualified opportunities for the AE, which I valued much higher than just purely setting meetings.

Mendizo

Opinionated

0

Sr. Director

It's tough on both ends. Personally, I hate this metric because it's a quantitative metric, not a qualitative metric. It's actually pretty damn easy to 'set meetings'. I've had SDR's set meetings where the prospect shows up with no idea of what the meeting is about... it shows you the SDR's can game the system.

At the same time, if you look at it from the SDR team side, it's also hard to have a direct correlation sometimes. If you're pegging your SDR performance to deals closed, well some of those deals can be quarters or years out.

The middle ground is on slightly more qualitative metrics such as leads that the AE marks off as qualified (with varying criteria here, such as the first call or two was positive, and it seems like something is there, but that is a subjective measure). This does cause some friction between Sales and the SDR team though, because the SDR's will always push Sales to mark things quickly.

It also depends on how well established the teams are. If the SDR team is relatively new with high turnover, they're not going to be willing to wait for qualitative measures to shape up, and instead push for easy quantitative measures like 'meetings set'.

To the spirit of your question, I would recommend working with your Sales and SDR leadership to look at the pipeline process and where things happen. For example, in your business, can you qualify in the first meeting that this is a real deal? If so, perhaps set that as the metric and stage-gate, for SDR handoff and also where they are metric'd. Additionally, it might be helpful to have the SDR's join some of the early calls (to help with pushback, pitch this as a way for the SDR's to hear more that will help in their cold calling); if they can hear for themselves the results of shotgun, shoddy all-you-can-grab appointment setting, they might be more inclined to focus on quality. But, at the end of the day, compensation drives behavior, so their metrics will need to change.

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

© 2024 Bravado Inc. All rights reserved.

Privacy Policy Legal and Privacy Center Sales Jobs

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.