An SDR compensation plan that pays the SDR a bonus on completed demos.
Demos Completed Bonus
Use SDR comp plans like this one when you want to reward your team for scheduling demos that actually occur. Under this sales compensation model, the SDR earns a bonus for every demo that runs that they scheduled. Note: This SDR comp plan does a great job of promoting quality demos and eliminating the risk of no-shows. To take it a step further, consider adding a Closed Won Commission, as well.
$75K
On-Target Earnings
$150K
Quarterly Quota
$51K:$24K
Base:Variable
8x
Quota:OTE
Model your plan
Forecast Earnings
Split
68:32
Quarterly Quota Bonus
Revenue:OTE
8.0x
We recommend a ratio of 4 to 10x
$1-$30 million
ARR
Build a funnel
Quarterly
Paths
Path 1: Quarterly Quota Bonus
Path Description
Quota
Type
Earnings Rule
This plan includes a single path that pays a bonus following every demo completed that the SDR initially booked.
To help curb our no-show rates on demos, we switched from an SDR compensation plan that paid a bonus on demos scheduled to one that only pays a bonus once a demo actually takes place.
- Mallory A.
VP of Sales
Plan Examples
Sales Development Rep
demos completed:
15
Bonus per demo completed:
$200
Market Development Rep
demos completed:
90
Bonus per demo completed:
$100
Business Development Rep
demos completed:
10
Bonus per demo completed:
$300
How to customize this plan
As with most compensation plans, the two major components that will vary across sales teams are:
Quota
First, you’ll need to decide on the quota period. We recommend both quotas have the same period. Your quota period is the frequency at which a rep is held to that sales quota.
In our experience, about 45% of the plans on QuotaPath fall under a quarterly quota frequency. Annual plans make up 25%, as do monthly quotas, and 5% consist of other frequencies, such as weekly, bi-weekly, or semi-annually.
We recommend aligning your quota to your sales cycle. Then, once you decide that, you’re ready to determine a quota that is low enough to be attainable and high enough to be valuable for your business.
Bonus Rate
The best way to start is by thinking about how many opportunities you want your SDRs to open each month or quarter. You can guess (we don’t recommend that!) or solve by figuring out how many qualified opportunities your SDRs should create to hit a financial target. (Hint: Use our Sales Funnel!).
When you have that determined, you’ll have the applicable bonus for your quota period. For monthly quotas, you’ll divide the annual bonus by 12.
For instance, say you have a target of 10 opportunities per month and an annual bonus of $12k. Divide $12k by 12 to reach the monthly bonus of $1k, which you would then divide by the 10 qualified opportunities, giving you a $100 bonus per qualified opportunity generated.
Frequently Asked Questions
What makes this a good SDR compensation plan?
Like the SDR Closed Won Commission plan, the Demos Completed Bonus plan gives your SDRs a reason to provide some quality control around who they are booking demos with. Because they only earn a bonus from demos that actually occur, they will be more motivated to only book demos with serious prospects.
What’s a good bonus rate for this SDR comp plan?
Depends on your business needs! Some plans offer a $20 bonus per demo completed, while others offer a $500 bonus per demo completed. To come up with a bonus rate that makes sense for your business, look at the value of each of these opportunities. A quick way to figure this out is to take your ASP (average sales price) and multiply that by your qualification rate and then qualified:close rate. If your ASP is $25k and you qualify 40% of your opps, then a demo is worth $10k in qualified pipeline. Then if your qualified-to-close rate is 30%, each completed demo is worth $3k for your business on average. So paying $20 for each of those opps seems a bit low, and you want to motivate your SDRs to book as many demos that actually come to fruition as possible.
What’s the difference between sales commissions and bonuses?
Sales commissions and bonuses both classify as variable compensation. Commissions differ from bonuses in that bonuses reward a pre-determined dollar amount that doesn’t vary. Commissions, on the other hand, consist of a percentage of the total revenue from a deal that changes most oftenly based on the annual recurring revenue (ARR) or total contract value. For example, If an SDR earns 4% of every deal that eventually closes, that’s commission. Meanwhile, if a rep earns $200 on every qualified opportunity they create, that’s a Single Rate Bonus! To see commissions and bonuses tracked automatically in QuotaPath, book a time with our team here.
What other SDR comp plans should I consider?
Other SDR commission structure templates include the Qualified Opportunity Bonus, which pays a rep a fixed rate bonus for every qualified opportunity they pass on to sales. Or, you can offer just the Closed Won Commission to reward the rep a set percentage on every deal that closes from their leads. For a blend of the two, you can look into the Qualified Opportunity Bonus. In any case, QuotaPath can track and payout these plans to make it a bit easier on your finance and revenue teams.
