What is the Commission Structure for SaaS Sales Teams?

SaaS sales compensation potentially includes a mix of commission and base salary. The commission structure could be different but often includes:

• Percentage of revenue: AEs could potentially earn a percentage (often 5-15%) of the revenue generated.
• Bonuses for exceeding targets: Bonuses may be given when targets are exceeded.
• Recurring commissions: Commissions could be received as a reward when customers renew subscriptions.

Most SaaS sales teams are basically designed to drive recurring revenue through online subscriptions. A typical structure includes:

• Sales Development Representatives (SDRs): These are the base for the identification and qualification of potential leads.
• Account Executives (AEs): Once the qualification of a lead is made, AEs potentially take over, building relationships that guide them through the sales process and closing of deals.
• Customer Success Managers (CSMs): After closing a deal, customer success managers get involved. They work on sustaining customer contentment. And also addressing concerns and managing renewals.
• Sales Managers: The sales manager is responsible for overseeing the sales process, managing team performance, and setting growth strategies.

A well-integrated SaaS sales compensation plan should potentially align with the target market, goals, and sales cycle length of a business or brand. The experience level of the sales rep and the complexity of the products should be taken into consideration as well.

Sales reps should be motivated by a good compensation plan. Top talent is attracted at most. And a common objective is worked towards by all employees.

Revenue generation for a SaaS salesperson may vary greatly depending on: 

• The salesperson’s role: SDRs tend to have lower quotas than AEs.
• The company’s size and target market: Enterprise deals tend to naturally generate more revenue than business on smaller sales.
• The product’s price point: Products highly priced could  lead to higher revenue.

Some challenges include:

• Balancing short-term and long-term goals: An excessive emphasis on acquiring new customers may lead to insufficient attention to retaining existing ones.
• Team collaboration: Compensation plans should reflect the need for SDRs and AEs to work together seamlessly.
• Market fluctuations: Compensation plans should reflect flexibility since economic changes potentially affect sales.