I am budgeting for building out a sales team in the US/Canada for a B2B software. How much should I budget for a Sales rep in a year in the US? And in proportion, what sort of a quota can I expect an experienced sales person to carry in ratio to their salary? The kind of information I am looking for are some general guidelines. Something like - 5 year sales experience 100,000k (mix of fixed + variable) and 500k in revenue. etc. I know it depends on the industry and if the sales rep comes from the industry I am in etc. Any sort of advice on how to go about planning quota vs sales salary would help? PS: I looked online but the ranges are so large, I can't tell if it would fit well to my industry etc. Just so that there is context about the product, industry, and deal size, it is a Learning Management System (LMS) to be specific sold to Learning and Development/Training/HR decision makers in companies between 250 to 1000 employee size range. Average annual license cost would be 15,000 USD. Sales cycle may be 3-6 months. And I would be passing on inbound leads and hiring 1 to 2 outbound SDR to feed the sales person leads.
One of the simplest and most used sales commission structure is variable pay as a percentage of a single sale’s revenue. Imagine your company sells a certain product for $100,000 with a sales commission rate of 5 percent. For each one they sell, your reps would collect $5,000. Another simple sales commission structure is the gross margin plan. These commission models consider the profit of each transaction, including the price of sale and the costs associated with making that sale. The company would then see a $90,000 profit on that deal. It is a good plan to use as you begin to grow your sales team and scale your business.
You can read more here: https://www.xactlycorp.com/blog/sales-commission-structures
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Answered 3 years ago
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