When does your Saas Startup need to start thinking about sales compensation plans?
When it comes to planning a sales compensation plan for a SaaS (Software as a Service) company, timing is key. The right plan can drive sales and keep your team motivated, while the wrong plan can lead to frustration and turnover. So, when is the best time to start thinking about your sales compensation plan? Here are some best practices for timelines to consider.
Phase 1: Pre-launch
Before your SaaS product even launches, it's a good idea to start thinking about your sales compensation plan. This is especially important if you plan to hire a sales team before launch. During this phase, you should consider the following:
What are your sales goals? Make sure you have clear and realistic goals in mind before you start planning your compensation plan.
What is the market for your product? Research the competition and see what they are offering in terms of sales compensation. This will help you determine what is feasible for your company.
What is your budget? Your budget will play a major role in determining what you can offer your sales team. Make sure you have a good understanding of what you can afford before you start planning.
Phase 2: First few months of launch
During the first few months of your product's launch, it's important to get feedback from your sales team and make any necessary adjustments to your compensation plan. This is a good time to consider the following:
Are your sales goals being met? If not, you may need to reevaluate your compensation plan and see if there are any changes you can make to help your team meet their goals.
How are your sales team members performing? Take a look at the individual performance of your sales team and see if there are any areas where they need additional support or incentives.
Are there any changes in the market or industry that could impact your sales compensation plan? Keep an eye on any changes that could affect your plan and be prepared to make adjustments as needed.
Phase 3: Six months to one year post-launch
After the first few months of your product's launch, you should have a good understanding of how your sales compensation plan is working. This is a good time to review and make any necessary changes to ensure that your plan is still effective and aligned with your goals. Consider the following:
Are your sales goals being met? If not, it may be time to reevaluate your plan and see if there are any changes you can make to help your team meet their goals.
How is your sales team performing? Take a look at the overall performance of your team and see if there are any areas where they need additional support or incentives.
Are there any changes in the market or industry that could impact your sales compensation plan? Keep an eye on any changes that could affect your plan and be prepared to make adjustments as needed.
Conclusion:
Planning a sales compensation plan for a SaaS company requires careful consideration and regular review. By following the best practice timeline outlined above, you can ensure that your plan is effective and aligned with your goals. With the right plan in place, you can keep your sales team motivated and drive success for your company.
Here are a few examples of SaaS sales compensation plans for each stage of a company's growth:
Phase 1: Pre-launch
During the pre-launch phase, you may not have a fully-fledged sales team in place yet. As such, you may consider offering a commission-based plan to any early sales hires. For example, you could offer a 20% commission on all sales made during the pre-launch phase. This can be a good way to attract top talent and get them invested in the success of your product.
Phase 2: First few months of launch
During the first few months of launch, you may want to consider offering a combination of salary and commission to your sales team. For example, you could offer a base salary plus a 10% commission on all sales. This can help ensure that your team has a steady income while also providing an incentive for them to drive sales.
Phase 3: Six months to one year post-launch
After the first few months of launch, you should have a better understanding of what works and what doesn't in terms of sales compensation. At this stage, you may want to consider offering a more advanced commission structure that takes into account individual performance and company goals. For example, you could offer a tiered commission structure where top performers earn a higher percentage of commission on their sales. You could also consider offering bonuses for meeting specific sales targets or other performance milestones.
It's important to keep in mind that these are just a few examples, and the right sales compensation plan for your company will depend on your specific goals, budget, and industry. It's always a good idea to review and adjust your plan regularly to ensure that it is aligned with your goals and motivating your team.