What is the most sensible SaaS sales team structure when beginning to scale?

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JASON LEMKIN

At the end of the day you have to solve for two things:

  • A plan that gives the reps a living, fair wage; and
  • A plan that you know and feel is accretive to the company.

It can be and feel tough to do both in the early days.

Ultimately, most stable sales comp plans pay the rep about 15% total of the revenue they bring in, in base comp plus bonus. Sometimes as little as 7–8% in big enterprise deals, sometimes a little bit more in SMB (low deal size) sales.

Or put differently, at scale, you want your reps to close at least 4x–5x the amount you pay them. Ideally, the higher end of this scale.

Then the math sort of works out.

But in the early days, that may not be enough to put food on your rep’s plate. Or at least not enough to pay a competitive wage.

If the sales process is still unproven, I’d suggest starting at 1x. At least for the first few months of a rep’s tenure. I.e., expect her just to cover her costs in new sales.

That’s still worth it if it brings in more sales, and/or frees up your time.

Then scale it up to 4x-5x once you have a repeatable process proven out.

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Published on July 31, 2017
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