Should closed deals be a part of SDR compensation?

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Should closed deals be a part of SDR compensation?

Should sales development representatives be compensated for deals closed, or just meetings booked? There are two variables to take into account for this vital decision, let's dig in.

SDR compensation is always a tricky question and will vary across B2B sales teams. When payment is such an important part of what drives a sales team, making sure you get it right can’t be left to chance. Let’s consider two variables that determine if closed deals should be a part of your compensation structure.

Sales cycle length

Complex B2B sales cycles can range anywhere from 1 month to 1 year. Therefore, some SDRs wouldn’t see money from a closed deal for a long time. A period of more than two to three months is beyond the outlook of a rep in a role that usually has a two-year expiration date. Timely compensation tied to direct, visible contributions is the most motivating for any employee. To keep your SDR team eager and passionate, tie compensation to a quick-win metric like monthly meetings booked.

Qualified or not

Our preferred SDR compensation structure is a fixed salary + fixed bonus on each opportunity (SQL). This structure provides a competitive base salary, and a standard incentive for each meeting passed on to and accepted by an Account Executive. When your company has a firm definition of the target market and ideal customer profile, the SDR’s job finishes when they schedule the meeting. Meaning every meeting is qualified. However, this payment structure can be customized to your company’s SAL/SQL goals and qualification process. Compensating on level of opportunity qualification, rather than closed deals, is extra motivation for direct added value.

To sum things up, a long B2B sales cycles mean more complex processes, and less direct value added by SDR. Drive your reps by tying their pay to their immediate contributions, before they forget what their bonus was even for.

We’ve identified 20 can’t miss sales development KPIs for B2B outbound teams. Read the ebook.

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