Choosing the right person
One of the questions I hear all the time from business owners is how much they should pay for a salesperson. If they pay too much, the cost of sale is too high, and profitability goes down. If they pay too little, they cannot get high-level talent and are vulnerable to high turnover.
So how do you figure out what salespeople are worth? The most popular compensation model is one that’s around 50% salary/50% commission. This is especially common for “hunting” roles that require new business development. A higher base and lower commission is the norm for “farming” roles, in which the rep’s main focus is growing existing client revenue.
Here, based on my work over the years helping companies find, choose and equip their sales teams, are some rules of thumb that you should keep in mind: Commission plans should drive the behaviour your company is looking for. For example, if you want more new business, the commission plan should be weighted toward hunting achievements.
Avoid limiting the commissions a salesperson can make: a great business developer will want to know that their income is as high as the effort they put in. Remember that no matter what the salary, there should always be a clear, attainable sales target—attainable through reasonable, not superhuman, effort. Whoever you’re hiring from us they’ll require expense reimbursement related to business travel and client engagement. These expenses should be accounted for in your cost of sale analysis while developing the commission plan.
So how do you figure out what salespeople are worth? The most popular compensation model is one that’s around 50% salary/50% commission. This is especially common for “hunting” roles that require new business development. A higher base and lower commission is the norm for “farming” roles, in which the rep’s main focus is growing existing client revenue.
Here, based on my work over the years helping companies find, choose and equip their sales teams, are some rules of thumb that you should keep in mind: Commission plans should drive the behaviour your company is looking for. For example, if you want more new business, the commission plan should be weighted toward hunting achievements.
Avoid limiting the commissions a salesperson can make: a great business developer will want to know that their income is as high as the effort they put in. Remember that no matter what the salary, there should always be a clear, attainable sales target—attainable through reasonable, not superhuman, effort. Whoever you’re hiring from us they’ll require expense reimbursement related to business travel and client engagement. These expenses should be accounted for in your cost of sale analysis while developing the commission plan.
One size doesn't fit all
Typical Compensation Breakdown & Target Income on plan | The types of Salesperson you can get for this money | Typical role for this sales level | Activities
Base Salary £22k – 25k
Sales Target £44k – 50k
Either a Junior B2B sales person with less than 4years of experience or a more senior sales person but with a limited career to date
Junior inside/outside sales/lead generation roles with all industry types from technology to industrial to business services companies or Junior account manager with consumer product companies
Base Salary £29k – 44k
Sales Target £58k- 76k
Either a sales rep with 3-7years B2B experience or a senior, accomplished person at the later stages of their career when they are less marketable to employers
Mid -Level inside/outside sales role fore media companies. Hardware/software companies & business services companies or Territory/Account Manager with consumer packages goods companies
Base Salary £36k-50k
Sales Target £73k – 100k
5+ years of strong B2B Consultative/Insight sales experience; presents very well in-person; has a consistent history of high recommendations & a breadth of quality experiences in both Corporate & SME sales be it Direct or Indirect
B2B sales companies (ad agencies, media companies, business services, IT) that are focussed on selling into companies with more than 200 employees
Base Salary £60k – 94k
Sales Target £130k -145k
10+ Years of extremely successful sales experience in a progressively more complex sales environment; Industry experience (so that they can hit the ground running )
Companies selling £million solutions into mid-enterprise level clients. Very common in IT or senior telecoms industry
The base salaries in each range vary by a significant amount. At the highest level, a sales person might be getting £60,000 or they might get £100,000. So, how do you stop yourself from making a £40,000 mistake?
These are some of the variables that account for big salary swings:
All this aside, here’s one piece of advice I would offer: the one thing you never want to compromise on is talent. Experience, on the other hand, is something you may have to compromise on to align with your budget.
Remember that experience isn’t just measured in number of years on the job. In order to earn that higher pay, a sales rep needs to have been working in one lane. If they’ve jumped from industry to industry, suddenly their experience doesn’t mean much. The biggest variable—the one that could mean the difference between £60,000 and £100,000—is how specific a sales person’s experience is to your industry; how well they know your competitors and the industry players and how much influence they have with them.
If you hire someone with less experience, you’ll get away with paying them less, but you’re taking a risk. However, if you think they have the talent to be a great sales person for your company you can always train them on the particulars of your industry. What you can’t teach are drive, personality and smarts.
Base Salary £22k – 25k
Sales Target £44k – 50k
Either a Junior B2B sales person with less than 4years of experience or a more senior sales person but with a limited career to date
Junior inside/outside sales/lead generation roles with all industry types from technology to industrial to business services companies or Junior account manager with consumer product companies
- 30-60 cold calls per day
- Immediate to 2-week sales cycles
- All sales activity is very measured
- Simple client decisions
Base Salary £29k – 44k
Sales Target £58k- 76k
Either a sales rep with 3-7years B2B experience or a senior, accomplished person at the later stages of their career when they are less marketable to employers
Mid -Level inside/outside sales role fore media companies. Hardware/software companies & business services companies or Territory/Account Manager with consumer packages goods companies
- Very micro-managed (lots of activity reporting)
- Clients likely have a fairly simple decision-making process (not too many influencers)
Base Salary £36k-50k
Sales Target £73k – 100k
5+ years of strong B2B Consultative/Insight sales experience; presents very well in-person; has a consistent history of high recommendations & a breadth of quality experiences in both Corporate & SME sales be it Direct or Indirect
B2B sales companies (ad agencies, media companies, business services, IT) that are focussed on selling into companies with more than 200 employees
- Sales person has a little more autonomy (more 1:1 coaching but not so much granular activity tracking)
- More measured by sales results & pipeline than by volume activity
- Sell into mid & enterprise decision makers, so process is a little more complex
Base Salary £60k – 94k
Sales Target £130k -145k
10+ Years of extremely successful sales experience in a progressively more complex sales environment; Industry experience (so that they can hit the ground running )
Companies selling £million solutions into mid-enterprise level clients. Very common in IT or senior telecoms industry
- Highest performing sales person is likely to be the best paid people in the company
- Likely to be a complex & lengthy decision – making process/sales cycle
The base salaries in each range vary by a significant amount. At the highest level, a sales person might be getting £60,000 or they might get £100,000. So, how do you stop yourself from making a £40,000 mistake?
These are some of the variables that account for big salary swings:
- Industry type: No matter how much experience a sales person has, if an industry has a very high cost of sale, the salesperson is going to earn a lower base salary.
- Brand recognition: Is your brand recognizable? In other words, will it do most of the work for you? Companies with a strong brand know that’s all they need to get in the door. Because their sales are marketing-driven, the big money-makers at those companies will be the marketers. Companies with zero brand awareness will need a more experienced (read: more expensive) sales team.
- Scarcity of talent: Some Geographic Territories, because they boast an unemployment rate well below the national average, is a seller’s market. Those with strong sales skills can sell them at a higher price. On the other hand, in some areas even though there are more jobs & more talent overall, the unemployment rate is higher, making the going rate for a good sales person more reasonable.
All this aside, here’s one piece of advice I would offer: the one thing you never want to compromise on is talent. Experience, on the other hand, is something you may have to compromise on to align with your budget.
Remember that experience isn’t just measured in number of years on the job. In order to earn that higher pay, a sales rep needs to have been working in one lane. If they’ve jumped from industry to industry, suddenly their experience doesn’t mean much. The biggest variable—the one that could mean the difference between £60,000 and £100,000—is how specific a sales person’s experience is to your industry; how well they know your competitors and the industry players and how much influence they have with them.
If you hire someone with less experience, you’ll get away with paying them less, but you’re taking a risk. However, if you think they have the talent to be a great sales person for your company you can always train them on the particulars of your industry. What you can’t teach are drive, personality and smarts.