So main progress stage VC Iconiq has printed its newest and really detailed Definitive Information to Gross sales Compensation here. It’s very detailed and oriented extra towards growth-stage scale-ups — however it’s wonderful. Everybody ought to have a learn.
I didn’t a lot be taught from it as verify — verify issues I’ve seen, identified, and put into apply, and seen it confirmed throughout many SaaS startups.
My high take-aways:
#1. Sure, 50/50 Base/Variable for AEs stays the usual, and 4x-5x+ Quote:OTE ratio stays the usual. Corners had been lower within the growth occasions of 2021, however we’re again to sane gross sales fashions. Enterprise Quota:OTE ratios are increased (5x+), SMB is a bit decrease, however on the finish of the day, you might want to shut 4x-5x what you are taking dwelling.
#2. Renewals, if they’re carried out by gross sales, are paid out at about 40% of an preliminary fee. A fancy subject right here of when it is sensible to have gross sales concerned in renewals, however useful to see they get about 40% of the fee of a brand new deal.
#3. Gross sales Management Usually Has 40% or So From Variable Comp. CSMs Are Pushing As much as 20%. That sounds about proper. I favor a 50/50/25 mannequin for a VP of Gross sales at the very least within the early-ish days. however extra have pushed for increased and better bases over the previous years.
#4. Later stage AEs have OTEs for $235k-$250k — however they’ve to shut so much to truly earn it ($1m+). SDRs $85k-$95k. The chart under on comp ranges is useful. Word once more this skews towards late-stage startups and scale-ups. Typically, I’d say earlier stage comp is 10%-20% decrease.
#5. SaaS Corporations Are Nonetheless Paying 5%-20% Larger OTEs in “Tier 1” Cities like SF, NYC, and many others. Is sensible to me. And folk with distant groups pay much less. Most SaaS corporations have probably not gone flat at scale, though many now do on the earlier levels. Comp can be about 20% decrease in Europe and Canada, which is per my expertise.
#6. Enterprise SDRs Usually Should Guide 5 SQLs Per Month, Mid-Market SDRs About 20. 20 has all the time been my rule, good to see it confirmed right here with the newest knowledge:
#7. 33% of SaaS Startups Now Comp SDRs Based mostly on Pipeline They Supply vs. SQL. I’ve tried this as nicely, it has Execs and Cons. The Execs is it tends to align to greater and higher offers. The Cons is SDRs work on fewer, larger offers. After they do that, they should supply on common about 10x-15x their OTE in pipeline.
#8. 82% of SaaS Startups Use Gross sales Accelerators, Primarily Based mostly on Exceeding Base Quota. In all probability not a shock. Reward your best possible. The standard 10% base fee price accelerates as much as 20% for the best performers, as soon as quota is hit.
#9. AEs Are Usually Given a 4-6 Month Ramp, SDRs a 2-3 Month Ramp. The most effective can do it in half this time, however useful to see finest practices right here.
#10. Ramped Gross sales Groups See 60%-70% Quota Attainment, As much as 80% for the Very Greatest Groups. Having Mentioned That — Q1’23 Was Tough. Many SaaS corporations are struggling to hit these metrics as of late, however that’s nonetheless per my expertise in how the very best gross sales groups obtain when startups are quick rising. Having stated that, many struggling SaaS startups are seeing attainment charges at half that immediately.
And some different small notes I discovered useful:
- 53% of SaaS corporations use clawbacks. I do know reps hate them, however I discover they actually assist curtail churn-and-burn offers.
- Solely 14% of SaaS corporations cap commissions. Let the very best run!
- 50% of PLG corporations pay gross sales a fee on self-serve offers that convert to paid and not using a human contact, at the very least within the early days. It’s a fancy concern, however in the long run, it’s typically easier to pay reps on all of the offers they cowl and personal.
An amazing report!