Which levels of Sales Commission will keep your SaaS salespeople motivated to sell more, without unduly eating into your profits? “Trial and error” is one way of answering this question. Hopefully, you won’t end up pushing too much sales talent into the arms of your competitors in the process. Alternatively, you can simply see what the going rate is, then match it. You’ll still need to figure out things like your value proposition and the best way to manage sales rep egos, but at least you won’t have to worry about insulting them about their compensation.
Different kinds of revenue deserve different types of compensation. From a sales rep’s point of view, more effort means more pay. From a company’s standpoint, however, the intrinsic value of the sale is a key factor. Accordingly, going rates for sales commission depend on whether a sales rep has hooked a new customer, helped an existing one to buy more, or simply rolled over a current contract to the next period.
This benchmark published on our bechmark portal– “Average Commissions by Sales Activity” – tells you what companies in your sector are paying their sales reps in commission for three different types of sale. In each case, the level is expressed as a percentage of ARR (annual required revenue) quota.
Top 75 Benchmarks for your saaS Business Case
We have selected 75 best practice benchmarks to make reasonable assumptions in numerous situations.
While you might not want to wander too far away from these industry averages, there may be justification for changing commission levels:
CEO and Founder Lean-Case - Eckhard is a Serial Entrepreneur co-founding cyber-security startup accells acquired by Ping Identity and m-payment startup paybox acquired by Sybase/SAP. As a Business Angel, VC Partner and Investment Advisor, he has realized that turning business models into numbers is a major challenge and must professionalize.
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