When Should I Pay Commission on SaaS Sales that Close Themselves?

Q: When should I pay the commission for SaaS sales? All of our trial signups will get an automatic email from an account executive. How do we decide if the AE was responsible for the sale versus the sale just happened organically?

Every company with a self-serve component and a sales-driven component frets a bit about paying sales reps on deals that close “automatically”, or close to it.

And yes, in a sense, in some days the sales rep gets a freebie there.

But later you learn this is always true in sales. In any type of sales, some deals are easier to close than others. Some close fast. Some close in 1 call. Some take years.

And in the end, you generally have to pay sales reps out on all the leads they cover. Even the ones that barely needed a touch from sales at all.

It’s just simpler this way, and makes it much easier to route a bunch of leads, and/or a segment, and/or a territory, to a rep.

It also means you often have to pay them out on automated, organic account growth — at least in Year 1. Twilio does this, even when the account grows itself. So does Stripe. You can see my interview with Jeff Lawson on the topic here:

What’s generally simpler in the end is to pay the rep on all deals, but if the overall payout is too good a deal, just adjust the overall commission rate for all deals down a bit. Rather than argue over individual deals.

KISS. Especially on sales comp plans.

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Published on December 31, 2019

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