I think most folks (including Twilio, etc) have realized you pretty much have to pay salespeople the way they are used to be being paid: on the annualized value of deals.
Most traditional B2B companies pay reps on the “ACV” of the first year of the deal, and a lesser commission on any multiple year deals — but no commissions on renewals.
Most B2D/API companies also pay reps on the first-year revenue from deals, even almost 100% utility-based deals, for the next 12 months after closing.
Is that “fair” if the rep does nothing after the deal closes? If say a $5k deal the rep closes grows to $100k over 12 months, without the rep doing any work at all?
It doesn’t matter. What does matter is that the rep can “close” 4x-5x or more of her total comp.
As long as that math works, it’s OK if someone of the work is done by the app itself, or others, or whatever.
View original question on quora
