ICONIQ - Sales Compensation Guide
In May venture firm ICONIQ published their definitive guide to sales compensation.
They surveyed 236 Go To Market execs and B2B SaaS companies - including representatives from marketing, sales and customer success.
Whilst you should chart your own course when developing your comp model, it provides a valuable sense check on what others are doing so can validate your own scheme.
Download the entire document because you can learn from every slide - but here are five that jumped out to me.
The Go To Market Org
As Revenue Operations becomes a more established strategy, the question of leadership structure comes up regularly.
Should the Marketing lead (maybe a CMO) report into the CRO?
In this graphic that is exactly what happens. Sales, Marketing and Customer Success leadership report up into a single revenue leader - whether that is a CRO, a CCO or CEO.
The reminder here is that the CRO is not the VP Sales rebranded.
The CRO takes on responsibility for two other orgs and needs to demonstrate leadership and experience in those two disciplines.
Responsibilities across the GTM Org
CROs need to ensure they have appropriate coverage and corresponding incentives to cover each stage of their customer journey.
This graphic does a nice job of displaying the coverage, including primary, secondary and even tertiary incentives for each role.
In another article I published around accountability, it is important to factor these secondary and tertiary incentives into your plan - they typically are linked to factors outside of the direct control of the individual, which drives collaboration across the teams resulting in healthier business.
Marketing and SDRs comped on closed revenue
AEs comped on retention
CSMs targeted on NPS
Its worth building this graphic for your own org to check you are happy with the coverage.
SDR Compensation
SDRs are primarily comped on top of the funnel activities - generating meetings, handing over prospects for AEs to accept as a Sales Qualified Lead.
Increasingly SDR’s have a component linked to closed won revenue - that might be an additional SPIFF rather than linked to quota, but incentivises the SDR to be creating high quality opportunities and partnering with their AE further along the process.
AE Compensation
AE’s primary comp metric is closed won revenue - ARR, with around a third also being focused on how long the contract is (multi-year) and a services element.
One to watch is net dollar retention - does this customer continue to grow or are they a bad fit and churn or reduce spend? Expect this metric to become more common in AE comp models.
Account Managers v CSMs
The final slide I’ll share shows the relative compensation metrics between an Account Manager and a Customer Success Manager.
Some companies conflate these two roles or use the terms interchangeably.
An Account Manager is a sales role with a comp scheme based on maintaining or increasing the ARR from an account.
A CSM is a value based role focused on ensuring the customer is getting the value out of the product they purchased.
Yet when we look at the comp metrics, they look very similar - CSMs are also targeted on Closed Won ARR, Net Dollar Retention and Renewal Rates - the top three for AMs.
You should be very clear on the roles you have and their goals.
Your customer needs to be able to trust that your CSM really is focused on them being successful and not under end of quarter pressures to add on a module they don’t need.
Get the ICONIQ Sales Compensation Guide
I recommend downloading the 77 page full guide.
You’ll find more detail including:
ramp periods
commission draws
quota ratios
commission caps
Accelerators and decelerators
PLG commission schemes
Get started
Whenever you are ready, there are two ways that I can help you accelerate your revenue growth.
Buyer Experience Audit - I’ll impersonate a buyer researching your segment and company and let you know what I find. Ideal for planning your RevOps strategy.
RevOps Impact Playbooks - I’ll help you implement one or more tactical processes across your revenue teams - content, referrals, testimonials, adoption and more.