A sales development rep (SDR) compensation plan that pays a flat bonus on every qualified opportunity that the rep generates.
Use this sample compensation plan when you want to reward your SDRs on every opportunity they source to hand off to the AE team. The structure involves a bonus applicable to each qualified opportunity, without any cap. Note: We recommend setting clear parameters ahead of time on what constitutes a “qualified opportunity.” For instance, you don’t want your SDRs getting in the habit of passing off a series of poor leads that never amount to anything. Instead, set a scoring system in place to encourage your SDRs to create quality leads with a high chance of closing — and pay them accordingly by offering a bonus for each one. You might also consider combining this plan with a closed won commission structure that pays the SDR a percentage of the deal once it finalizes.
We recommend a ratio of 4 to 10x
This plan includes one path with a Single Rate Bonus applied to every qualified opportunity the SDR creates.
I oversee a 10-person SDR team, and when we switched to a Qualified Opportunity Bonus plan like this one, we immediately saw an increase in the quality of leads.
Head of Sales Development
15 qualified opps
Bonus per qualified opp:
30 qualified opps
Bonus per qualified opp:
10 qualified opps
Bonus per qualified opp:
As with most compensation plans, the two major components that will vary across sales teams are:
Begin by figuring out how many opportunities you would like your reps to create during the quota period you chose. This can be done by either guessing (not ideal!) or by solving for how many leads your reps should create to hit a financial target.
If you don’t compensate your SDRs on revenue, then you should use averages. For example, if you have an ASP (average sales price) of $20k and a qualified:close rate of 10%, each qualified opportunity is worth $2k on average. Then if you have a financial target of $40k per SDR per month, the target would be 20 opps per month.
Once you have determined the quota of qualified opps, you would find the applicable bonus for your quota period.
If you have an annual quota, that’s easy – it’s the same as your annual variable. If you have a quarterly or monthly quota, you’ll divide the annual bonus by 4 or 12, respectively.
So say you have a target of 12 opportunities per month and an annual bonus of $20k. Dividing $20k by 12 gives you a monthly bonus of $1666, which you would then divide by the 12 qualified opportunities, giving you a ~$140 bonus per qualified opportunity generated.
That really depends on your business needs! Some plans offer a $20 bonus per opportunity, others offer a $500 bonus per opportunity. What it comes down to is 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 qualified:close rate. So, if your ASP is $25k and your qualified to close rate is 40%, each qualified opportunity is worth $10k for your business on average. So paying $20 for each of those opps seems a little unfair – you want to motivate your BDRs to create as many opps as possible!
Sales commissions differ from bonuses in that bonuses reward a set amount of money that doesn’t change. Meanwhile, commissions consist of a percentage of the total revenue from a deal that changes usually based on the annual recurring revenue (ARR) or total contract value. For example, If a rep gets 12% of every deal closed, that’s commission. If a rep earns $250 for every demo they set, that’s a bonus — a single rate bonus!
Other SDR comp plans include the Closed Won Commission structure, which pays the SDR a percentage of the sale after the account executive wins the business from the SDR’s lead. Or, you can combine the Qualified Opportunity Bonus and Closed Won Commission to reward the rep a set dollar amount on every new opened opportunity and even more money when the deal closes.
Some companies will pay SDRs a bonus for hitting a specified amount of activities over the course of a week, month, or quarter. These might include number of outbound calls, meetings set, emails, LinkedIn messages or other outbound efforts. It’s not a bad idea, we just think for quality control, rewarding SDRs based on qualified opportunities and/or deals won is better in the long run for your business and also the rep.
QuotaPath! We’re biased, but in all seriousness, our sales compensation and commission tracking system makes it so neither you or your reps have to manually track or triple check the work of your existing solution or manual math. With real-time updates thanks to our native integrations, you can trust the data is there and accurate. Give your SDRs an Earnings dashboard to see how each qualified opportunity adds to their next paycheck.
A sales development rep (SDR) compensation plan that pays a single, flat rate commission on any won deals that the SDR initially generated the lead for.
An SDR compensation plan that pays the SDR a bonus on qualified opportunities as well as a commission on closed/won deals that originated from their leads.