Start your week with the stories and insights that matter most to the sales community. Subscribe so you never miss an issue.
October 25, 2021
5 min read
Welcome back to The Weekly Pitch! Our mission is to cover news, offer insights, and profile rising stars in the sales community.
In this week's Feature Story, Korrin Bishop reports on the latest compensation trends for three common sales positions – sales development reps, account executives, and sales leaders.
She pinpoints typical compensation challenges for each role but offers new solutions for how some sales teams overcome these obstacles.
Let's start by looking at the latest sales compensation benchmarks!
This chart represents real-time sales compensation data from Built In for US-based sales professionals. Over 50 metro-specific benchmarks are available.
Here's how the salary and variable splits break out by position:
By: Korrin Bishop
In sales, compensation generally consists of an annual base salary plus variable pay like commissions and performance incentives. Together, these establish the on-target earnings (OTE), or the expected compensation if the employee meets their sales targets.
However, in a tight labor market for sales talent, teams need to get bolder with their compensation models to recruit and retain the right people.
Below, we look at three sales roles—sales development reps (SDRs), account executives (AEs), and sales leaders—and offer creative suggestions for how we can leverage your compensation package to incentivize them to join our team and succeed.
SDRs are entry-level sales positions. Their work includes tasks like:
Historically, SDRs have to set between 8 to 12 meetings per month and get paid variable compensation per meeting or an overall bonus for reaching their target.
According to The Bridge Group SDR Metrics Report 2021, SDR compensation is rising while experience at hire is falling, a sign that SDR recruitment is a priority for companies.
But challenges arise when using compensation to motivate SDRs and attract new talent, such as:
Here are some ideas to curb these challenges:
AEs are responsible for closing sales from SDR leads or otherwise. To do so, they’ll conduct product demos and discovery calls with prospective customers.
For AEs, compensation typically consists of 50% base annual salary and 50% variable commission.
Two challenges that arise in compensation plans for AEs include:
To counteract these challenges, sales teams can:
Sales leaders include sales operations managers, sales enablement leaders, and those who oversee entire sales organizations or teams of reps. These roles focus on driving team performance.
While compensation for sales leaders varies greatly, a common approach is receiving a bonus for getting the sales team to hit its overall targets. For example, sales leaders may get a certain percentage (from 1–5%, typically) of the sales team’s total revenue booked. On average, OTE is between 50–70% base annual pay and 30–50% variable pay.
Some challenges to consider in compensation for sales leaders include:
Potential compensation solutions for these challenges include:
The critical takeaway from sales compensation trends following the economic and social turbulence of the last two years is a need to structure it to both recruit and retain sales teams. Consider how our compensation plans attract new talent, inspire team members to meet targets, and maintain a strong culture of support and appreciation for sales.
Korrin Bishop is a freelance writer and editor with publications in The Motley Fool, Sierra Magazine, Shelterforce Magazine, and Fodor's Travel, among others. You can learn more about her work and contact her at: www.korrinbishop.com.
“The Bridge Group SDR Metrics Report 2021: Post COVID-19 Reality,” CIENCE, Mar. 3, 2021
“5 Sales Compensation Trends You Should Be Thinking About,” The Brevet Group, n.d.
“Compensation Overview for SDR, BDR and AE Careers in SaaS Sales,” Aspireship, n.d.
“Structuring Your Sales Leaders Compensation Plan,” Menemsha Group, Apr. 12, 2017
“Sales Incentives That Boost Growth,” McKinsey & Company, Oct. 19, 2018
“6 Steps to Designing a Sales Development Compensation Plan,” Salesloft, Oct. 30, 2018
“Sales Incentives Programs: How to Choose One that Galvanizes Your Team,” Pipedrive, n.d.
Video meeting fatigue is at an all-time high. Built In gives us a great list of tips to make our meetings more engaging. Our favorites are those related to prospect and customer meetings: #1, #5, #8, and #11.
Fist bump. You made it to the end. Thank you for reading and subscribing to our newsletter.
Please consider forwarding this email to your team and asking them to subscribe!
Start your week with the stories and insights that matter most to the sales community.