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Sales Compensation: Tips and Tricks to Building a Powerful Plan

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Sales Compensation: Tips and Tricks to Building a Powerful Plan

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We’ve all heard Tom Cruise’s famous line from Jerry Maguire, but showing your sales team members "the money" is often a complicated equation. In this webinar, you’ll learn the tactics and secrets for designing, planning and implementing powerful sales compensation packages that yield results and actually scale.

In the webinar, CeCe Bazar, sales expert at OpenView Venture Partners, lead a discussion with John Kosturos, head of sales at RingLead, and Howard Brown, CEO of RingDNA centered on building a powerful sales compensation plan.

You'll learn:

- The secrets to creating an effective compensation plan
- How to automate the compensation process with technology
- How to make sure your data is strong for accurate compensation, reporting and lead routing

We’ve all heard Tom Cruise’s famous line from Jerry Maguire, but showing your sales team members "the money" is often a complicated equation. In this webinar, you’ll learn the tactics and secrets for designing, planning and implementing powerful sales compensation packages that yield results and actually scale.

In the webinar, CeCe Bazar, sales expert at OpenView Venture Partners, lead a discussion with John Kosturos, head of sales at RingLead, and Howard Brown, CEO of RingDNA centered on building a powerful sales compensation plan.

You'll learn:

- The secrets to creating an effective compensation plan
- How to automate the compensation process with technology
- How to make sure your data is strong for accurate compensation, reporting and lead routing

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Sales Compensation: Tips and Tricks to Building a Powerful Plan

  1. Who are we creating comp plans for anyway?
  2. Meet the Millennials – Your New Sales Hires
  3. The Profile of a Successful BDR or SDR Hire 0-2 Years of Experience Coachable Genuine Curiosity Track Record of Winning Hungry Eager to Make Impact Goals and Results Driven Ultimate Stalker
  4. What Millennials Need Out of Their Comp Plan…
  5. Simplicity Structure
  6. Creating Structure •  Calls •  Emails •  Conversations •  Appointments •  Opportunities •  Closed won
  7. Comp Plan Creation: Creating a Comp Plan that Drives Success
  8. Elements of a Comp Plan Base: What you see in your paycheck not including any bonuses, benefits, or perks associated with the job. Bonus: Additional compensation awarded to an employee for achieving specific goals or metrics. Kicker: Any additional spiff or bonus outside of a reps bonus that is tied to closed/won deals or competition.
  9. What is a bonus comprised on? 40% Appointment 60% Opportunities
  10. Potential Bonus: $1K monthly pay out Goals: 16 Appointments, 8 Opportunities Pay out: Appointments Set ($25 each) Opportunities Created ($75 each) ***As always, we recommend that this number be uncapped*** Example Comp Structure
  11. OTE Breakdown: Base vs. Bonus 70% Base 30% Bonus
  12. Additional Kicker 10% MRR .89% ARR
  13. Tying It All Together Designing a comp plan is like closing a deal: –  Remember your target audience –  Know what you want them to do –  Show them how to get there –  Tell them what the results are –  Be consistent in your delivery
  14. John Kosturos, VP of Sales
  15. The Ultimate Sales Compensation Plan 100% Data Driven
  16. Cold Calling 2.0 Model Controlling the List
  17. Reports on current accounts to identify the ideal account profile •  Accounts with the largest transactions •  Accounts with the highest lifetime value •  Accounts that buy most often •  Accounts with the lowest activities from MQL to SQL •  Accounts with the least number of activities from SQL to close •  Accounts with the lowest average time from MQL to SQL •  Accounts with the lowest average time from SQL to close •  Accounts with the highest % of MQL to SQL •  Accounts with the highest % of SQL to close Ideal Customer Profile (Accounts)
  18. “75 percent of the customer information held by most enterprises is inaccurate, out-of-date or ineffective.” (Gartner) • Geography • Industry • Employee size • Revenue • Investment Capital • Free cash flow (optional) Ideal Customer Profile (Accounts)
  19. Map Your Entire Potential Dream Market!!
  20. Identify Decision Makers at Target Accounts
  21. Think About It for a Moment
  22. •  Best buyer market segments (segment top 20%) o  Industry, employees, revenue, geography, other proprietary metrics •  Average deal size per segment •  Total number of potential accounts per segment (mapping markets) •  What percentage of leads should convert to customers •  Number of activities it takes to close an account •  Goal for how long it should take for you team to work through each market segment B2B Sales Comp Plan Metrics
  23. •  25000 potential accounts •  3 key contacts per account (75,000 contacts) •  8 activities per contact on avg (24 activities per account) •  600,000 total activities to exhaust the list •  New reps can accomplish about 600 activities per week •  600,000/600 = 1000 weeks •  If the goal of the company is to exhaust the list in 12 months, it will take ~18 sales people (1000/56 = 17.85) Sample Target Segment Analysis
  24. Top 3 best buyer segments for example company: 1.  Technology companies in USA have an average deal size of $10000 and close at about 5%. (Assuming 600 combined call/email activities completed per rep, per week.) 2.  Manufacturing companies in USA have an average deal size of $3000 and close at about 10%. (Assuming 600 call/email activities completed per rep, per week) 3.  Banks in USA have an average deal size of $20000, close at about a 4% clip (Assuming 600 call/email activities completed per rep, per week)   Example of Compensation Calculation
  25. You can calculate your annual revenue per rep with a clear understanding of your avg deal size and close rate. 1.  (5% closed) = 1250 new accounts * $10K avg deal = $12,500,000 •  $694,444 revenue per rep •  $104,000 - $208,000 (comfortable salary + commission range) 2.  (10% closed) = 2500 new accounts * $3K avg deal = $7,500,000 •  $416,666 revenue per rep •  $62,500 - $125,000 (comfortable salary + commission range) 3.  (4% closed) 1000 new accounts * $20K avg deal = $20,000,000 •  $1,111,111 revenue per rep •  $166,666 - $333,333 (comfortable salary + commission range) Example of Compensation Calculation
  26. Business Data Report Card Forecasting D Customer Service F Sales Efficiency C- Productivity D- Client Renewals D CRM User Adoption F
  27. Howard Brown CEO, RingDNA
  28. We all build comp plans to achieve top performance
  29. But top performance is actually the sum of many parts
  30. The Golden Rule: If it’s not in CRM it doesn’t exist
  31. 6 out of 10 SaaS companies now use SDRs to create opportunities for account executives Source: Bridge Group, 2015
  32. Two primary ways to comp SDRs RESULTS   REVENUE   Mee,ngs,  Opportuni,es   %  of  Won  Opportuni,es  
  33. But putting too much emphasis on any one area can spell trouble
  34. Commonly Tracked Metrics
  35. Give SDRs insight into tracking activity volume versus goals.
  36. The number of sales conversations directly affects quota attainment Source: Bridge Group, 2015
  37. The entire team will perform at a higher level
  38. To get more wins
  39. Q&A

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