Inside Sales Compensation & Incentives Best Practices

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Agenda
Research & Statistics
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Organizational Stages Source: Chally Group, Principles of Sales Compensation

Sales Skills by Stage Source: Chally Group, Principles of Sales Compensation

Comp Recommendations by Stage Source: Chally Group, Principles of Sales Compensation

Plan Detail by Stage Source: Chally Group, Principles of Sales Compensation

National Inside Sales Data Source: PayScale.com

SaaS Inside Sales Compensation Source: Bridge Group Inc, Inside Sales for SaaS Companies Metrics & Compensation

Quota Basis Source: Bridge Group Inc, Inside Sales for SaaS Companies Metrics & Compensation

Quota Achievement Source: Bridge Group Inc, Inside Sales for SaaS Companies Metrics & Compensation

Account Team Comp Plan Sample
This group calls on low dollar renewals, calls to close Forced Free Trials ($250-$400 subscriptions) and attempts to cross-sell other products in 1-2 calls.
Base: $10-$13/hour (Please note this group is in Penticton, BC – adjust for market)
Source: Bongarde Safety via Joyce Juntunen, Director of Sales & Service

Account Manager Comp Plan Sample
Each AM manages approx. $800K-$1 Million book and is responsible for customer on boarding, training, engagement, renewal, up sell, cross-sell to existing book
Base: $40K-$55K per year depending on tenure
Target at 100%: $60K-$75K
Must sell 75% of cross-sell quota to earn commissions

AE Comp Plan Sample
Acquisition Sales, No renewal responsibility. May include some outside sales as needed. Selling SaaS, online and print subscriptions as well as transactional sales.
Base: $40K-$50K per year
Target at 100%: $65K-$75K
Target at 125%: $95K
Must sell 75% of quota to earn commissions

Bonus Plan Sample
B.E.S.T. Bonus – Every month that the AE achieves 150% of quota, and additional 1% of revenue is set aside and paid out in December as a bonus
Bonuses – All employees are eligible for annual bonus based on company performance against goals. Based on individual goals attainment and management discretion, employees can earn 0-300% of target.

“ The Boiler”
Very Low base (10 per hour)(12 per hour at senior)
Increasing commission rate based upon quantity of sales that happened that week only 8, 10, 12, 14%
Monthly contests for low-cost electronics and sports tickets
New Account targets were assigned
Renewal Customer Accounts were assigned and paid the same
Pros
Low payout for non-producers
Extremely performance based
Rewards only producers
High sense of urgency for reps to be productive every minute
Easy to distinguish performers
Inexpensive model
Cons
Hard to recruit candidates
High burn out rate
High unplanned turnover
High performers rarely stayed beyond 12 months
Became a farm team of employees for other companies to poach
Undefined territories
Source: James Gallagher, ValueVine

“ Classic Hunter + Farmer”
Medium base ($30,000 base)
Fixed commission rate of
10% for new accounts
5% for renewal accounts
quarterly contests for bonuses and bragging rights
New Accounts were a free for all in the CRM (claim only up to 300) Renewal accounts were your own from the prior year
Pros
still payout for non-producers
Bigger rewards for producers but more balanced
Very performance based
Medium sense of urgency for reps to be productive
Reasonably inexpensive model
Cons
Medium burn out rate
Medium unplanned turnover
High performers did not stay beyond 24 months

“ Shared Inside/Outside”
Medium-High base ($55,000 base)
Fixed commission rate of
8% for inside sales 15% for outside sales rep
no contests other than president’s club (150% of quota)
accounts were assigned by geographic territory and teamed with 1 inside and 1 outside
Renewal accounts were your own from the prior year
Pros
still payout for non-producers
Bigger rewards for producers but balanced
Very performance based
Each pairing is accountable to one another
Very defined territories
Low burn out rate
Low unplanned turnover
High performers stayed several years
Cons
Expensive model
Harder to distinguish performers
If inside rep underperformed it effected the outside rep
If the outside rep underperformed it effected the inside rep
No way to tell how much geography plays into performance
Underperformers were continually let go and replaced every 6 months

“ Hunter Only”
Medium base ($50,000 base)
Commission rates with accelerators based on achievement
8%-14% for new accounts
same commission rates for up-sells
0% for sale-size renewal accounts
quarterly contests for bonuses and bragging rights
New Accounts were a free for all in the CRM, plus 100 marquis targets (claim only up to 250 at a time and then work those)
Renewal accounts were your own from the prior year
Pros
some payout for non-producers
Bigger rewards for producers
Performance based and retainment based
low burn out rate
low unplanned turnover
High performers stayed as long as they were getting paid
Cons
More expensive than other models
Need to create sense of urgency through culture

“ Appointment Setter”
low base ($15 per hour) 20 to 25 hours per week max
bonuses for appts set
$30 each for first seven in 2 weeks, $60 each for eight or more in those two weeks
addtl $100 bonus for deals closed that were your appt
Assigned Accounts in the CRM (400 max at a time)
Pros
Very low payout for non-producers
nice rewards for producers
Performance based
high sense of urgency for reps to be productive every week
Less expensive model
Natural sense of urgency
Cons
Hard to recruit candidates
high burn out rate
high unplanned turnover
High performers stayed up to a maximum of 10-12 months

Upcoming Events
Wednesday, May 25
AA-ISP Seattle Chapter Happy Hour
Lot No 3 in Bellevue, 5:30 – 7:30 p.m.
Wednesday, June 15
AA-ISP Seattle Chapter Meeting
Columbia Tower Club in Seattle, 7:30 – 9:00 a.m.
Questions?
Matt Heinz, Seattle chapter president
[email_address] , 877-291-0006

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Inside Sales Compensation & Incentives Best Practices

by Heinz Marketing Inc on Apr 26, 2011

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Inside Sales Compensation & Incentives Best Practices — Presentation Transcript