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Compensation of a person selling SaaS services

Paul Johnston's Profile

Looking for advice on best practices in regards to paying incentives on SaaS salespeople

Are they paid a percentage of the first year revenue ? or paid a fixed amount on being successful with closing a new client ? If the latter, are they paid more depending on the number of users the new client has ? Are they paid a base and incentive ?

Looking for some feedback on what the SaaS industry is doing.

Answers

Steve Klei
Title: CFO
Company: Jigsaw/Salesforce
(CFO, Jigsaw/Salesforce) |

Definitely pay on first year only. There are a lot of levers. Recurring vs nonrecurring - pay much higher percentage on recurring. Accelerators or decelerators based on quota achievement. Can also pay more for new busines from new clients vs new business to existing clients. Renewals also are a variable - depends on stage of growth and how customers are managed. I would avoid paying much if anything on renewals unless salesperson also is responsible for retention. If that is the case, I would want to switch it over time.

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