Designing a Sales Compensation Plan for SDRs and BDRs

All sales reps are not created equal. Distinctions must be noted in role, experience, and expertise. As such, no one-size-fits-all compensation plan will treat everyone fairly and get the most from a diverse sales team. While the goal of any comp plan should be to encourage and reward the behaviors that lead to success, what works for a 20-year enterprise veteran may not be best for rookie Sales Development Reps (SDRs) or Business Development Reps (BDRs). Generally, SDRs focus on inbound leads while BDRs seek prospects. They are often less experienced than other types of sales professionals, and their comp plans should strike a balance between security and incentive, with an eye on long-term reward and growth. With that, here are some tips for designing a compensation plan specific for SDRs and BDRs:

• Base Salary vs. Variable Earnings

  One of the most important considerations is the type of compensation, such as one with either a solid base salary or more aggressive variable earnings. While a base provides security, it does not necessarily drive incentive, and a commission-only pay structure can leave reps vulnerable during slumps or slow times. A balance between the two is optimal. On average, a 60/40 split is most common. Too low a base could lead to high attrition, and too high can foster complacency. Of course, everyone needs to earn a living, but be wary of making young sales pros too comfortable. A little hunger can inspire drive and be a great motivator for burgeoning careers.

• Keep Competitive

  With any comp plan, organizations must be aware what their competitors pay for similar roles. Remember, the best talent wants the most compensation, and young sales pros often see dollar signs before other considerations. This does not necessarily mean you must outbid your competition, but you need to be aware of the types of incentives you can offer that make your organization most attractive. Also, things like geographical region can influence a plan. Areas with a higher cost of living can make a difference in your base/variable salary percentages. In addition, an organization’s products and services may affect the length of your sales cycle, which is another factor when designing a plan.

• Activities to Track

  Salary and comp plans for SDRs and BDRs are often structured to reward activity above all else. Some examples of lagging and leading activity KPIs that can contribute to the comp plan include:

  Efficiency and number of prospects engaged, via:

  • Calls
  • Emails
  • LinkedIn

  Effectiveness, such as:

  • Meetings scheduled
  • Meetings completed
  • Pipeline generated/Opportunities created

While many people find it intimidating to discuss money, such as asking about salary in job interviews or approaching bosses about a raise, compensation is a prime consideration of employee engagement and satisfaction. As such, it is too important to neglect or treat like a dirty word. This is especially true with SDRs and BDRs. Organizations should remember that a fair and transparent comp plan serves as these reps’ introduction to sales and primes them for a lucrative and rewarding career in the industry.

5 Practical Prospecting Tips You Should Implement Today 5 Essential Steps to Ensure a Successful Sales Meeting