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In B2B sales, what commission structure should be paid for closed sales?

  • Posted by admin on March 7, 2018

Generally speaking, you need a sales rep to bring in 4x-5x what they take home in total compensation (base + commission). To make your business model work.

You can pay more in the early days, to get the engine going — that’s fine. I paid just 1x with my first rep in the earliest days. But ultimately, sales has to be profitable.

So in the end, most B2B companies at scale end up roughly with a 10%/10% model. Sales reps make about 10% of their quota in base, and 10% in commission. With their quota 4x-5x their “OTE” (base + commission). If they do better than quota, they make more of course.

Figure out a model around that, that works for you. And make attainment easier in the first few months. Then pay as much as you can, and still fit the model. Sales is hard.

A little more here: How Much Can You Really Spend on Marketing? (And The “Problem” With The S+M=ACV Axiom) – SaaStr

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