The Better Inbound AE Comp Plan

Jul 09, 2024
The Better Inbound AE Comp Plan

If your AE's don't do any prospecting.

Because you feed them enough inbound and SDR outbound leads. 

Considering paying AE commission based on their win rate. 

This gives them incentive to optimize conversion. 

Rather than incentive to burn through leads. 

Don't use this as a growth solution.

Use it to solve a problem if your AE's are burning through expensive leads. 

If they're living off the low hanging fruit and not converting the harder deals.

Consider a sliding scale where their commission percentage increases alongside their overall win rate. 

This scales well for financial efficiency while rewarding the right behaviors. 

You might even be able to throw away the entire quota system if you nail this properly. 

Imagine that, an AE role with no quota. 

That's what I did with my inbound AE's at Aircall. 

Tell them we feed you pipeline and you get paid a percentage based on your win rate. 

Of course the question of lead quality comes into play, but that's another subject.

For example:
80% - 100% win rate = 30% commission
60% - 79% win rate = 20% commission
30% - 59% win rate = 15% commission
1% - 29% win rate = 10% commission

This obviously doesn't make sense if the AE's are responsible for generating their own pipeline, in that case they need a quota. 

But it makes a ton of sense if you're paying to deliver them pipeline. 

It focuses the compensation on what's in their control. 

If they aren't the ones generating pipeline, they can't really be in control of achieving a specific quota.

But they can certainly be in control of their win rate. 

That said, you'll need a solid system in place for qualifying leads and ensuring they meet a certain quality standard, but this isn't hard to do. 

If done right, everyone wins.

There's nothing worse than being held accountable for hitting a certain revenue quota when the job is converting leads that are provided to you by marketing and/or SDR's. 

One could make the argument that all AE's should be generating their own pipeline but in transactional environments where it's more cost effective to generate these leads through marketing or outbound SDR efforts, it often makes sense to have AE's focused strictly on running demos.

Usually because there's so many of them and you want your best AE's on demos all day instead of spending half their time prospecting, which means you need twice as many AE's to cover the demos. 

In these situations it makes sense to look at the win rate as the commission lever rather than the quota attainment. 

It eliminates the blame game and allows AE's to be in control of their success because even if the marketing team didn't meet their target for leads, the AE can still convert at a high rate. 

You may also consider instead of their win rate dictating a percentage of revenue paid, it could be a specific dollar amount so that even if the marketing team doesn't provide the full target of leads they can still earn their full OTE (this is ideal).

Happy Selling,

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