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114 points seanlinehan | 2 comments | | HN request time: 0.424s | source
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ghiculescu ◴[] No.43543832[source]
I can see why you’d need software to calculate comp, if your comp system is so complex!

As a case study in simplicity: our sales people get 1xMRR for each deal closed, or 2xMRR if the deal signs an annual contract. SDRs get a flat amount for each demo sat (doesn’t have to close, but does have to be accepted by the AE). The amount is equivalent to 0.75xMRR for a typical customer.

That’s really all you need in SaaS. This has scaled from less than 1M ARR through to… more than 100x bigger than when it started.

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seanlinehan ◴[] No.43546585[source]
A simple salary + percent commission is a great model.

That said, this calculator was built to model/simulate the things that are super common in enterprise SaaS:

1. It takes sellers time to ramp up. Experienced sellers might be willing to jump to your company, but not if they are guaranteed to only get their (relatively) low base salary for 1-2 quarters.

2. If you decide to do a ramp, you have to make a choice about the OTE.

If you can avoid doing these things, that's great. Though whether that will fly largely depends on whether your sales cycle and target talent market supports it!

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1. infogulch ◴[] No.43550172[source]
I wonder if it would be reasonable to offer sellers a sliding scale to trade off their salary and commission rate over, say, ten graduations. Then let them choose whatever scale they want, maybe with some rules about how they can change it etc to prevent high frequency minmaxing.
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2. seanlinehan ◴[] No.43550366[source]
Some companies do things like this, but I'd be cautious about it.

There's a few things I'd consider:

* If you have a bunch of reps, doing the periodic accounting to cut the right checks becomes more of a pain (though it's a pain anyways)

* When you give a choice, the employee might make what, in retrospect, winds up being the wrong choice. This can lead to pissed off sales people and regrettable churn.

OTOH, sales comp plans change every year anyways, so could just be renegotiated