Article · 9 min read

A Framework For Your First SaaS Sales Comp Plan

Jason Lemkin · SaaStr Free Intermediate

A deliberately contrarian first plan: cover the rep's fully loaded cost first, then pay 20 to 25 percent on everything above it, with no caps. Whether or not you adopt it, it forces you to think about sales as a profit centre.

  • Pay no commission at all until the rep has covered their own fully-burdened base and benefits.
  • After that, pay 20 to 25 percent of every additional dollar of ACV, roughly double a BigCo rate.
  • All-in, an inside rep takes home about 20 percent of the ACV they close, split about 50/50 base to bonus.
  • Traditional big-company plans only start working around 25M to 30M ARR or 40 to 50 reps. Never cap commission.
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The question it answers

  1. How do I build a comp plan that pays for the strategy we actually have this year?

Read with it

  1. From the Chennai-built comp platform that actually runs these plans for hundreds of companies. It gives the pay mix by role... Everstage Article · 18 min read SaaS Sales Compensation Guide: How to Design Scalable and Fair Plans Everstage
  2. Three concrete ways to handle the awkward case where the product sourced the deal, including a higher first contract rate with... QuotaPath Article · 10 min read How to build PLG sales comp plans QuotaPath
  3. Five design rules worth memorising, including show causality and keep the payout cycle under 60 days, plus a business case... Winning by Design Article · 15 min read Compensation for SaaS Sales Organizations Winning by Design
  4. Podcast · 31 min Aligning sales compensation with strategy, not SKUs (with Stephen Long) Stephen Long
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