3 commission pay examples for Account Management & Customer Success

By QuotaPath Team • September, 2022 • 4 mins

commission pay examples for AMs and CSMs

Account managers (AMs) and customer success managers (CSMs) have very different roles than account executives (AEs) and sales development reps (SDRs). As such, their sales compensation also varies. Below, we highlight their responsibilities and salary info and share three commission pay examples for AMs and CSMs.

While AEs and SDRs focus on connecting with new prospects to guide them through the buying process until they close the deal, AMs and CSMs engage with customers after the sale. They partner with clients to meet their goals, optimize their use of the product, and upsell and cross-sell when applicable.

Although winning new business is important to business growth, retaining existing customers is essential to growth and profitability. This is especially true when you consider that:

So, when customer churn is high, it restricts growth which causes an uphill battle.

Getting AM and CSM commission pay structure right has always been essential for attracting and retaining the best talent. But with so many job openings, the current labor shortage, and the threat of an economic downturn, it is more important than ever to offer the right compensation plan to potential candidates for these critical roles. That’s why we assembled three sales compensation plan examples to help you attract and retain top AM and CSM talent.

Plan #1: Retention-based commission

The first of our three sales compensation plan examples is for businesses that pay AMs and CSMs a commission for each renewed account. In this case, the AM or CSM has a target retention number with an expectation of renewing a percentage of the contracts that they manage. 

A few examples of this include:

  • An Account Manager has a monthly retention quota of $33,000 ARR and earns a 10% commission of every deal they close
  • An IT Relationship Manager has a hardware quota of $100,000 of revenue to existing customers per quarter and earns 6% of every deal they close
  • An Insurance Contract Manager has a renewal quota of $20,000 of health insurance plans per month and earns 15% of the premium of every plan sold.

The details of this plan are as follows:

Retention-based commission with 1 Path to earnings

Quarterly net revenue quota of $300,000

Earnings rule:

0% – 100% = 7.5% commission rate

> 100% – 150% = 12.5% commission rate

> 150% = 15% commission rate

Plan #2: Retention & Upsell Bonus

Our second plan targets businesses that pay AMs and CSMs a bonus for each account renewal or upsell. It is common for AM and CSM compensation to be based on two major components—retention and upsells. Some AMs receive a bonus depending on their revenue retention percentage through either renewals or upsells.

A couple of examples of this include:

  • An Account Manager has a quarterly retention quota of $240,000 ARR and earns a 7.5% commission of every renewal deal they close. Plus, they have an upsell quota of $60,000 ARR and earn a 10% commission on every upsell deal they close.
  • An IT Relationship Manager has a hardware quota of $100,000 of revenue to existing customers per quarter and earns 6% of every deal they close. Plus they have an upsell quota of $10,000 and earn a 10% commission on every upsell deal they close.

The details of this plan are as follows:

Retention & Upsell Bonus with 2 Paths to earnings

Quarterly retention revenue quota per quarter = $240,000

Earnings rule:

0% – 100% = 7.5% bonus

> 100% – 150% = 12.5% bonus

> 150% = 15% bonus

Plus – Quarterly upsell revenue quota per quarter = $60,000

Earnings rule:

10% bonus

The details of this plan are as follows:

Retention-based bonus with 1 Path to earnings

Quarterly net revenue quota of $300,000

Earnings rule:

0% – 80% = $83.33 bonuses

> 80% – 100% = $100 bonuses

> 100% – 150% = $120 bonuses

> 150% = $140 bonuses

These compensation plan templates set a great way to begin creating SaaS sales compensation for your AM and CS teams. QuotaPath has expertise in partnering with organizations on designing effective comp plans that drive the right seller behaviors. For sales compensation consulting and sales incentive software that provides commission tracking, schedule time with a QuotaPath teammate today.

Curious to see who we integrate with? Check out our native integrations page to automate your compensation process. 

Updated on September, 2022

Leadership
Leadership

How to choose your sales commission structure

This article, which previously appeared on Close’s blog, covers sales commission structure design. Read on to learn various structures to consider, best practices, and three sales commission structures that QuotaPath’s Graham Collins has seen work most effectively for account executives (AE), sales development reps (SDR), and sales leaders.

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