In this video quick answer, Kyle Vamvouris of Vouris, explains his version of the ideal SDR compensation plan. Check out this 1-minute video, or read the full transcript below.
When it comes to SDR compensation, I have a pretty simple process I usually follow. And what that is is 80% of On Target Earnings. So, the amount of money in addition to the SDR’s base salary that they would make if they hit quota every single month for a year – 80% of that I tie directly to qualified meetings.
The potential customer shows up to a sales meeting, and the account executive says, “Yeah, this is a good meeting. Let’s do it.” That is a qualified meeting. That’s 80% of their On Target Earnings. The remaining 20% is tied directly to when a deal closes.
So the reason why I do this is that I want to incentivize quality meetings, not just quantity. So we compensate for quality meetings. Which is a sales rep saying this is a quality meeting.
And then when it comes to why we compensate based on closed deal, it’s pretty simple – I want SDRs to follow a deal full sales cycle. Because in my experience those sales development reps who follow deals all the way through the sales cycle typically perform better when they are Account Executives. Because they’ve seen the sales cycle play out.
Also, it’s a nice little incentive to stay around. If you have a bunch of deals potentially closing in the next few months, you’re going to want to stick around and see the payout for those deals. Anyway, that’s the way I compensate SDRs.
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