Dear SaaStr: Should I Limit My Top Salesperson’s Commissions? They make so much. Sastra

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Dear SaaStr: Should I Limit My Top Salesperson’s Commissions? they make a lot

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Not until the company gets too big – if even then.

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It is often the case that top sales reps reach close to 2x to 5x as much as the average rep. With the exact same/same lead. And you may even end up with a rep who earns 8x or more on average, if they can just make off a ton of revenue.

And if you have a really good team, they can all make really good money.

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It can often seem almost… easy.

It’s not easy. It almost never happens.

The last thing you want to do is discourage your top rep from making a ton of money. You want them to keep going. Especially when leads are relatively rare and precious. A great rep not only closes a higher % of deals, but he generates more revenue per lead. You want to encourage it, not discourage it.

The day comes for most enterprise SaaS companies as they reach $100m when a senior sales exec makes $1m a year.

It’s a nice day. Because the company probably just closed a $5m TCV deal.

,

Now… at some point, you’ll be so big, and sales so sophisticated, and your brand so strong… that you’ll want to limit commissions. But that’s a long way off. Often over $100 million in ARR.

Here’s a little more: Why a great rep can close 9x more than a poor rep, and 2.5x more than a good rep. SaaStr and your #1 sales rep should be driving an M6 convertible by month 12. (And not buying a Panerai watch.) | Sastra

Image from here: 110201 sales comp ppt

Published on 18 October 2022



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