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Inside Sales Compensation for SaaS Startups

3 min read
February 24, 2014

Our sales team is experiencing rapid growth, and with over a month of continuous deals, we’ve got sales on the brain. Ok, who are we kidding? We always have sales on the brain.

That’s why we’re sharing a common model for sales compensation and performance expectations. Take a look:

1. Inbound SDR (Entry Level Role)

Job Description: Respond immediately to all inbound leads and schedule demonstrations on sales executive’s calendars. This role is measured by “Marketing-Qualified Appointments,” or MQA (someone who has used the free version, thinks they could get value from the premium edition and is willing to explore more).

  • Base Salary: $30K (Check Glassdoor for market rate)
  • Monthly Performance Incentives: 1-40 MQAs: Nothing / 41-80 MQAs: $25 each / 81+ MQAs: $50 each (this may vary based on offering)
  • Quota: 80 MQAs (may vary based on offering)

Example:

Company A receives over 1000 inbound leads monthly. Their reps are consistently outperforming quota. The salary for an inbound BDR becomes $42,000 when quota is met and gets up to $54,000 if they set 100 appointments in a month. Inbound reps that blow it out (achieving 240 MQA) are promoted.

2. Outbound SDR

Job description: Prospect targeted leads, and run campaigns (phone & email) in order to schedule demonstrations on sales executive’s calendars. Outbound BDRs are measured by “Sales Qualified Appointments,” or SQA.

  • Base Salary: $35K (Check Glassdoor for market rate)
  • Monthly Performance Incentives: 0-25 SQA: Expected /26-50 SQA: $170 each / 51+ SQA: $200 each (this may vary based on offering)
  • Quota: 40 new SQA / month (may vary based on offering)

Example:

Outbound BDRs at Company A attempt to contact 50 new leads per day (derived from our prospecting tool). The salary having met quota is $75,800. They are promoted when they meet 120 SQA.

3. Sales Executive

Job description: Sales executives run demos, consult customers, understand client objectives, and propose and close deals. They own pipeline.

  • Base Salary: $37.5K (Check Glassdoor for market rate)
  • Performance Incentives: 33% of first 6 months revenue. They get paid when the customer pays and are incentivized to sell annual pre-pays (customer gets discount, rep gets full commission up front). (this may vary based on offering)
  • Quota: $72,000 ARR per quarter (this may vary based on offering)

Example:

At Company A, reps are on average hitting 275% of quota (above $170,000 salary rate), and receive a promotion at $800,000 in New ARR.

4. Senior Sales Executive

Job description: Sales executives run demos, consult customers, understand client objectives, and propose and close deals. They own pipeline and get all leads above 500 employees.

  • Base Salary: $42.5K (Check Glassdoor for market rate)
  • Performance Incentives: 33% of first 6 months revenue. They get paid when the customer pays and are incentivized to sell annual pre-pays (customer gets discount, rep gets full commission up front). (this may vary based on offering)
  • Quota: $120,000 ARR per quarter (this may vary based on offering)

Example:

Company A’s senior sales executives get all the leads of companies above 500 employees and are promoted at $1,250,000 in ARR.


A few words of importance:

  • Best practice is to set quota where it’s profitable if the rep hits the number but low enough so they can crush it in multiples.
  • It’s important that sales executives (closers) never have to prospect. Yes, they can if they want, but BDRs should be their lead gen machine.