Should I cap the commission of my salespeople so they don’t unfairly earn more than my other workers?

Not until the company is very big.

It’s often the case that top sales reps close 2x to as much as 5x as much as an average rep. With the exact same / equal leads.

image from here: 110201 sales comp ppt

The last thing you want to do is dis-incent that. Especially when leads are relatively scarce and precious. A great rep not only closes a higher % of deals, but she also tends to generate more revenue per lead. You want to encourage that, not discourage it.

The day comes for most enterprise SaaS companies as they approach $100m when one senior sales exec makes $1m a year.

That’s a good day. Because the company probably just closed a $5m TCV deal.

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Now … at some point, you’ll be so big, and sales ops so sophisticated, and your brand so strong … that you may want to cap commissions. But that’s a long ways off. Often well past $100m in ARR.

A bit more here: Why a Great Rep Can Close 9x More Than a Poor Rep, and Even 2.5x More Than a Good Rep | SaaStr and Your #1 Sales Rep Should Be Driving an M6 Convertible By Month 12. (And Not Buying a Panerai Watch.) | SaaStr

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Published on January 14, 2019

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