GB Ep 37: How to Structure Sales Compensation

How to Structure Sales Compensation

Hello and welcome to another edition of Growth Bites. Today we’ll talk about how you can structure your sales compensation. Keep in mind that every company is different in terms of commissions and salaries, so this is a basic framework.

  • The first role you have is an inbound sales development representative. This person will qualify your inbound leads to make sure they match your ideal client profile and then schedule a call. Their role is similar to a gatekeeper. [01:33]
    • For this person, you’ll typically hire someone entry level and pay them $30,000 to $35,000 because it’s more of a junior role that doesn’t have any commission. [02:24]
  • The next level is an outbound development sales representative. This person emails and makes phone calls to leads they’ve found. Their goal is to qualify the leads and then pass them on to a closer to close the deal. [02:55]
    • This role typically pays $35,000 to $50,000 depending on location and the businesses you are prospecting. Commission here varies: you can reward the person with $10 to $15 for qualified appointment set, or a small percentage (2%) of the first month of the deal if the deal is closed. The ultimate goal is promotion to being a closer. [03:19]
  • For the next level, people working as closers, typically earn $60,000 to $80,000 for a lower-level closer, and up to 5% to 15% of the total contract value or of the monthly contract value. [04:23]
  • For Level 2 closers and tiers after that, you’re looking at $80,000 to $100,000 and higher, all the way up to your most senior closer. [05:08]
  • I have an interview with Kyle Porter of Sales Loft, where we talk about sales compensation for a high-level overview of how to structure sales compensation. [05:50]

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