First SDR comp plan
Demos Completed Bonus
If you’re bringing on your first SDR, we recommend this plan. It allows you to identify what a good demo looks like so that you can modify your plan from there.
The downside? You pay for a lot of poor demos.
When to use this plan?
Why use a Demos Completed Bonus plan?
Helps you determine what a good demo looks like and reduces risk of no-shows
Customize the Demos Completed Bonus Plan
Like this plan? Sign up for QuotaPath for free to add your business inputs and adjust the variables.
Forecast earnings & plan performance
See potential earnings based on your inputs and goal attainment progress.
Calculate your Quota:OTE ratio & Sales Funnel
Quickly assess how realistic, attainable, and healthy your OTE to quota ratio is. And, calculate the number of activities needed.
Streamline plan management
Assign the plan to your team and automate sales commission calculations. Be confident your team is being paid fairly and accurately.
How to adjust this compensation plan template
To customize this plan, you will adjust these 10 variables.
On-Target Earnings (OTE)
OTE combines base salary with variable pay and represents the total amount of money your reps can expect to earn if they hit 100% of their goals.
Pay Mix
Refers to the percentage of a salesperson’s total compensation, made up of base salary, commission, and other incentives. The most common pay mix in SaaS for SDRs is 68% base and 32% variable pay.
Company Revenue
Revenue is the total amount of income that a company generates from its primary operations. In SaaS, annual recurring revenue is one of the most important metrics.
Annual Revenue Generated
This is the annual goal for how much revenue the company generates based on the leads created from the SDR.
Revenue:OTE Ratio
This ratio calculates the multiplier increase between an SDR’s OTE and the amount of revenue the company generates based on the leads the SDR creates. The most common multiplier in SaaS is revenue 8x that of the OTE, but this will vary based on size and stage of the company.
Demos Completed
A “qualified opportunity” classifies as any lead the SDR creates that meets specific criteria or parameters so that reps pass along quality leads to their AE counterparts.
Closed/Won Deals
These represent any deal that an AE goes on to close that originated from an SDR-sourced lead.
Average Contract Value
Often abbreviated to ACV, this number represents the average deal size that your company sells.
Average Contract Value
Often abbreviated to ACV, this number represents the average deal size that your company sells.
Revenue Period
Your revenue period sets the frequency at which your SDR team’s revenue goal resets. In SaaS, the most common revenue period is quarterly. However, this number will vary based on your sales cycle.
Frequently asked questions
What makes this a good SDR compensation plan?
Like the SDR Closed Won Commission plan, the Demos Completed Bonus plan gives your SDRs a reason to provide some quality control around who they are booking demos with. Because they only earn a bonus from demos that actually occur, they will be more motivated to only book demos with serious prospects.
What’s a good bonus rate for this SDR comp plan?
Depends on your business needs! Some plans offer a $20 bonus per demo completed, while others offer a $500 bonus per demo completed. To come up with a bonus rate that makes sense for your business, look at the value of each of these opportunities. A quick way to figure this out is to take your ASP (average sales price) and multiply that by your qualification rate and then qualified:close rate. If your ASP is $25k and you qualify 40% of your opps, then a demo is worth $10k in qualified pipeline. Then if your qualified-to-close rate is 30%, each completed demo is worth $3k for your business on average. So paying $20 for each of those opps seems a bit low, and you want to motivate your SDRs to book as many demos that actually come to fruition as possible.
What’s the difference between sales commissions and bonuses?
Sales commissions and bonuses both classify as variable compensation. Commissions differ from bonuses in that bonuses reward a pre-determined dollar amount that doesn’t vary. Commissions, on the other hand, consist of a percentage of the total revenue from a deal that changes most oftenly based on the annual recurring revenue (ARR) or total contract value. For example, If an SDR earns 4% of every deal that eventually closes, that’s commission. Meanwhile, if a rep earns $200 on every qualified opportunity they create, that’s a Single Rate Bonus! To see commissions and bonuses tracked automatically in QuotaPath, book a time with our team here.
What other SDR comp plans should I consider?
Other SDR commission structure templates include the Qualified Opportunity Bonus, which pays a rep a fixed rate bonus for every qualified opportunity they pass on to sales. Or, you can offer just the Closed Won Commission to reward the rep a set percentage on every deal that closes from their leads. For a blend of the two, you can look into the Qualified Opportunity Bonus. In any case, QuotaPath can track and payout these plans to make it a bit easier on your finance and revenue teams.
Explore similar compensation plans
Qualified Opportunity Bonus
Use for long sales cycles and when you have a solid understsanding of what qualifies as an opportunity.
Closed Won Commission
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Qualified Opportunity Bonus & Close Won Commission
Our favorite SDR plan that spreads the payout across the sales funnel.
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