Balancing Base Salary and Commission

Most AEs think the fastest path to $500K/yr is mastering closing. It’s not. The #1 factor that determines if you’ll ever see that kind of money? Your comp plan. Here’s a breakdown of what a “good” comp plan looks like: I’ve coached thousands of sellers. I’ve seen every comp plan under the sun. And here’s the truth: making $500K–$1M in tech sales isn’t just about hustle, mindset, or skill. It’s about driving the right vehicle. If you’re trying to win a Formula 1 race in a Prius, it doesn’t matter how great of a driver you are. Same with sales. You need the right plan, the right OTE, the right accelerators. Here’s the breakdown of what “good” looks like: 1. OTE (On Target Earnings). SMB → $100K–$150K Mid-Market → $150K–$200K Commercial → $200K–$250K Enterprise → $250K–$350K Strategic → $350K+ (yes, I’ve seen $400K OTEs) A healthy split is 50/50 base and variable. If you’re $200K OTE, $100K should be salary, $100K commission. 2. Quota to OTE ratio. This is EVERYTHING. Good comp plans follow the “6x rule.” Your quota should be ~6x your OTE. $150K OTE? Quota ~ $900K. $300K OTE? Quota ~ $1.8M. If you’re staring at a $200K OTE with a $2M quota… you’re underpaid. Period. 3. Commission percentage. Here’s how you know if your plan is good: Variable ÷ Quota = Commission %. 10%+? Solid. 5%? You’re basically working twice as hard for the same money. 4. Accelerators. This is where reps get rich. Great plans pay more the further you blow past quota: 100–150% = 1.5x 150–200% = 2x 200%+ = 2.5x Do the math: An Enterprise AE with a $300K OTE, $1.5M quota, and strong accelerators can hit $900K+ by getting to 300% of plan. That’s not a pipe dream. That’s how you turn a $300K “job” into a $1M “career.” TAKEAWAY Stop blaming yourself when you’re stuck at $150K. Sometimes it’s not you—it’s the plan. Top earners don’t just sell better. They pick the right vehicle, with the right comp plan, and then step on the gas. Choose wisely. Because the wrong comp plan = capped potential. The right comp plan = $500K+ career. Your plan matters. A lot.

Companies Are Bleeding Money. Here’s One Reason Why, and It Needs to Stop. Let me speak directly to Business Owners, Managing Directors, and Sales Managers, especially in FMCG, Oil & Gas, and Real Estate. You hire a sales rep. You tell him: “No salary. No food allowance. No transport. Only commission.” You think: “Pressure will make him perform.” You’re wrong. I started my journey as a sales rep, indoor and outdoor. Carrying my suitcase. Walking shop to shop. In the sun. In the rain. From there, I became a supervisor. Then an operation director with experience across West Africa, the Gulf, the Middle East, and Europe. So trust me when I say: I know what motivates a sales team, and what destroys it. Here’s the truth: The “commission-only” model fails when applied to full-time sales reps. Unless you’re hiring independent agents with their own network and tools, this model is a fast track to high turnover, poor performance, and lost revenue. If you’re asking someone to: • Report at 8 a.m. • Wear your brand • File daily reports • Hit daily KPIs Then that person is not a freelancer. He’s your employee. He deserves to survive. How can a hungry man sell your product with passion? This mindset isn’t just unfair, it’s bad business. Here’s what works: • Pay a basic salary (at least to cover survival) • Provide transport allowance • Reward with commission based on realistic KPIs (not just sales—count leads, visits, demos) You want loyalty? You want productivity? Treat your salespeople like people. Like partners. They are your frontline. Your face. Your brand. Respect the hustle. Invest in your team. Watch your business grow. Now, I want to hear from YOU: Are you a sales rep? A manager? A business owner? Drop your experience in the comments. Let’s talk. Let’s fix this together. #leadership #sales #marketing #HR

It’s easy to determine how to compensate a closer since their role is commission based. But what about an inbox manager? Or a customer success rep? How do you structure their pay when there's no obvious revenue number to point to? Well, I actually have a framework that I use to build performance pay for any role, no matter how "non-sales" it seems. Here it is: Step 1 - Figure out what they actually produce You need to identify the measurable thing this person creates or delivers. And I mean really specific. So instead of saying "manages the inbox,", you can say "books qualified calls with prospects." Some examples: - Calls booked with qualified prospects - Client retention rate as a percentage - Scripts written and approved for use Step 2 - Work out the unit economics Let me walk you through this with the inbox manager example. Let's say your agency charges clients $300 for every qualified call you deliver to them. So each call your inbox manager books brings in $300 in revenue. Now, your total cost to deliver that call, when you add up ads, VA time, and tools, comes out to about $150. That leaves you with $150 in margin per call. You can comfortably pay out 15-20% of that margin without killing your profitability. If you take 15% of $150, that's $22.50. Round it up to $25 per call to keep things clean. Now you just repeat this process for every role in your business. Step 3 - Decide on the base and performance split This part really depends on how complex the role is and what your cash flow looks like. You need to figure out what makes sense for your specific situation and margins. Here's what that looks like for an inbox manager: They get $1,000 a month as a base, which covers their time. Then they earn $25 for every qualified call they book. If they hit the target of 40 calls in a month, that's $1,000 in performance pay. So their total potential earnings are $2,000 a month. This structure makes them genuinely want to book more calls, while you still have predictable base costs you can plan around. Step 4 - Get really clear on what "qualified" means You absolutely need crystal-clear definitions here, or you'll end up in constant arguments about what counts and what doesn't. For scripts, here's how I handle it: A script is considered approved when you've personally reviewed it and given the green light to use it. You measure reply rate only after the script has been sent at least 100 times. And any bonus tied to performance gets paid two weeks after the campaign launches. Apply this same level of clarity to whatever role you're paying performance on. Step 5 - Track everything in a simple way Create a performance tracker that you review with your team every single week. They should always know exactly what they've earned and exactly why they earned it. There should never be confusion or mystery around their pay. Your team should be able to calculate their own earnings in their head while they're working.

𝗧𝗵𝗲 𝗗𝗼𝘄𝗻𝘀𝗶𝗱𝗲𝘀 𝗼𝗳 𝗖𝗼𝗺𝗺𝗶𝘀𝘀𝗶𝗼𝗻-𝗢𝗻𝗹𝘆 𝗦𝗮𝗹𝗲𝘀 𝗥𝗼𝗹𝗲𝘀 Today, let us discuss the pitfalls of commission-only compensation in sales and offer strategies for balanced remuneration that promote ethical behaviour and retention. 𝘾𝙤𝙣𝙨𝙞𝙙𝙚𝙧 𝙩𝙝𝙞𝙨 𝙨𝙘𝙚𝙣𝙖𝙧𝙞𝙤: A company adopts commission-only pay for its sales team. 🍀 Initially, sales spike. 📈 𝗕𝘂𝘁 𝘀𝗼𝗼𝗻, 𝗽𝗿𝗼𝗯𝗹𝗲𝗺𝘀 𝗲𝗺𝗲𝗿𝗴𝗲: • High Stress Levels • Unethical Sales Tactics • High Employee Turnover What's happening? 𝗦𝗵𝗼𝗿𝘁-𝗧𝗲𝗿𝗺 𝗙𝗼𝗰𝘂𝘀: 👉 Sales reps prioritize quick wins over long-term relationships. 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲𝗱 𝗣𝗿𝗲𝘀𝘀𝘂𝗿𝗲: 👉 Financial insecurity leads to stress and potentially unethical behaviour. 𝗧𝗮𝗹𝗲𝗻𝘁 𝗥𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 𝗜𝘀𝘀𝘂𝗲𝘀: 👉 Top performers leave for roles with stable incomes. 𝗛𝗼𝘄 𝗰𝗮𝗻 𝗛𝗥 𝗮𝗱𝗱𝗿𝗲𝘀𝘀 𝘁𝗵𝗶𝘀? 𝙄𝙢𝙥𝙡𝙚𝙢𝙚𝙣𝙩 𝙖 𝘽𝙖𝙡𝙖𝙣𝙘𝙚𝙙 𝘾𝙤𝙢𝙥𝙚𝙣𝙨𝙖𝙩𝙞𝙤𝙣 𝙎𝙩𝙧𝙖𝙩𝙚𝙜𝙮: 𝗕𝗮𝘀𝗲 𝗦𝗮𝗹𝗮𝗿𝘆 𝗣𝗹𝘂𝘀 𝗖𝗼𝗺𝗺𝗶𝘀𝘀𝗶𝗼𝗻: • Provides financial security. • Motivates performance without undue pressure. 𝗕𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸 𝗦𝗮𝗹𝗮𝗿𝗶𝗲𝘀: • Use industry data to set competitive base pay. • Consider tools like PayScale or Glassdoor Salary Insights. 𝗘𝘀𝘁𝗮𝗯𝗹𝗶𝘀𝗵 𝗖𝗹𝗲𝗮𝗿 𝗖𝗼𝗺𝗺𝗶𝘀𝘀𝗶𝗼𝗻 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲𝘀: • Align incentives with both sales volume and customer satisfaction.   𝗣𝗿𝗼𝗺𝗼𝘁𝗲 𝗘𝘁𝗵𝗶𝗰𝗮𝗹 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗲𝘀: • Incorporate company values into performance metrics. • Reward long-term relationship building. 𝗞𝗲𝘆 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆: A balanced compensation model fosters ethical behaviour, reduces turnover, and attracts high-quality sales talent. 𝙒𝙝𝙖𝙩 𝙘𝙤𝙢𝙥𝙚𝙣𝙨𝙖𝙩𝙞𝙤𝙣 𝙨𝙩𝙧𝙖𝙩𝙚𝙜𝙞𝙚𝙨 𝙝𝙖𝙫𝙚 𝙬𝙤𝙧𝙠𝙚𝙙 𝙛𝙤𝙧 𝙮𝙤𝙪𝙧 𝙨𝙖𝙡𝙚𝙨 𝙩𝙚𝙖𝙢? 𝗟𝗲𝘁'𝘀 𝗱𝗶𝘀𝗰𝘂𝘀𝘀! 👉 Follow Iwona Bokinczuk for more insights on effective HR strategies. 💬 Contact me if you're looking for HR or recruitment advice for your business. #SalesCompensation #HRInsights #EthicalSales #TalentRetention #IwonaBokinczuk #FollowForMore

Great comp plans fit on a sticky note. Bad ones need a whiteboard. A salesperson shouldn’t need a PhD to figure out their commission. They need a straight line from effort to earnings. Here’s a real-world AE plan, broken down so it’s impossible to misunderstand: The Annual Plan: $75K base / $150K OTE / $750K quota The Monthly Pace: Hit a $62.5K quota by closing 8–9 deals at an average of $7.5K each. The Commission: 10% on all new business. Paid from dollar one. No decelerators. The Kicker: 13% total commission on all revenue above 120% of the monthly goal. That’s it. The rep knows their base, their target, their pace, and the upside for overperformance. Clarity creates focus. Focus drives results. What’s the most confusing comp plan you’ve ever had to deal with? #Sales #SalesLeadership #Compensation #Startups #SaaS

𝗧𝗵𝗲 𝗿𝗲𝗽 𝗺𝗮𝗸𝗶𝗻𝗴 $𝟭𝟴𝟬𝗞 𝗼𝗻 𝗮 $𝟰-𝟱𝗠 𝗯𝗼𝗼𝗸 𝘄𝗶𝗹𝗹 𝗻𝗲𝘃𝗲𝗿 𝘁𝗮𝗸𝗲 𝘆𝗼𝘂𝗿 𝗷𝗼𝗯 𝗳𝗼𝗿 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲 $𝟭𝟴𝟬𝗞. 𝗛𝗲𝗿𝗲'𝘀 𝗵𝗼𝘄 𝘆𝗼𝘂 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗴𝗲𝘁 𝘁𝗵𝗲𝗺. A client was building out a sales role and asked me a version of a question I hear constantly. How do you get someone who's already killing it to leave? The math is the real obstacle. If a rep is making $180K selling $4 to $5M a year somewhere else, and you're building a brand new territory from zero, you can't just match their commission percentage on day one. There's no pipeline yet. The numbers don't work for them. So instead of trying to out compensate, we talked about restructuring the risk. Higher guaranteed base for the first 6 to 12 months. Commission percentage that starts lower but increases as the guaranteed compensation (base) winds down. It's not a discount. It's a bridge. You're not asking someone to take a pay cut on faith. You're giving them a runway to get to the same number a different way. My two cents: the question isn't about cost. It's about ROI. The uncertainty about making the wrong hire means that investment capital for a territory rep's compensation may not deliver an ROI. The real question is, how much do you trust yourself to hire someone that mitigates your risk? Once you know, figure out what strategies and tactics can improve your risk. Pro Tip: before you make this about compensation. Find out why the candidate is even open to talk. Why are they looking? What would a change solve for them, professionally. What do they value the most in their professional life? Is it challenge, growth/advancement, winning team, mission/purpose, a decent boss, less bureaucracy, work-life balance, flexibility? The answer(s) are just as much compensation as the salary and commission plan. You just need to figure out how much they value it.