Commissioning Your Outbound Prospectors for Demos Set Only? Eek!

June 29, 2012 by

There are a number of different commission structures that can be given to outbound prospectors (i.e. someone whose SOLE responsibility is generating qualified leads for sales reps to build their pipeline).

However, if you are ONLY paying your reps based on number of appointments or demos set for the sales reps you are likely to run into some quality issues.

And lets be serious, if your outbound prospecters are passing along junk, not only are your sales reps going to be wasting their time, they will begin to take appointments/demos less seriously — and then what happens when there is actually a legit, hot qualified lead? It may get overlooked. Kind of reminds me of the story of the boy who cried wolf — the outbound prospector who cried qualified lead, I guess we could call it. God, I’m a dork.

Below is an example of a commission structure that OpenView has recommended to some of the outbound prospecting teams in our portfolio. This particular commission is paid out on a quarterly basis (although I think paying out monthly is a good strategy for most). You’ll notice the goal is 60 appointments for the quarter, 13 of which convert to TRUE opportunities via the sales reps — in other words, they are able to gather the whole kit and caboodle: Budget, need, timeframe, authority.

In this template example, the commission is uncapped — set more than 60 appointments? Get paid out at $50/appointment infinitely for the rest of the quarter. Set only 19 appointments in 90 days — you get $0. Harsh? Sure, but it’s also harsh for you as management to be paying base salaries, benefits, etc. for your outbound prospectors only to see them hit just 30% of their goal!  And from what I’ve seen, our portfolio companies pay some damn good base salaries for this type of role.

Even if you think the template below wouldn’t resonate well with your team (like I said earlier, different strokes for different folks), I still think that paying based on appointments AND opportunities created from those appointments (and putting a higher value on the latter), will get you much higher quality.

What compensation structure has worked well for your outbound prospecting team? Do you pay based on appointments or opportunities? Or both? What are your thoughts on giving outbound prospectors a small chunk of change when a deal actually closes? Would love your thoughts!

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Discussion

  • Aaron

    As a former lead qualifier who had a capped compensation plan- I think this makes a lot more sense. Reward your rockstars!

    One of the important KPIs I was taught to work for from the beginning was a very high qualified lead to opportunity ratio. Different organizations’ needs will be unique, but once I was fully ramped up and truly comfortable with the types of conversations (6 months in), I was trusted with qualifying the budget, need, timeline, and authority. My goal was that 90% of leads passed would be determined to be real opportunities. In the beginning, that percentage was lower (50-60%).

    This led to fewer leads being passed to reps, of course, but increased their productivity as almost every single one they were passed turned into a bona fide opportunity. I was also ONLY paid on opportunities- in an attempt to mitigate the quality issue that you allude to.

    Great insight as always Devon!

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Meet Devon

Devon McDonald

Devon McDonald is responsible for working directly with key stakeholders within OpenView’s portfolio to provide strategic guidance in the areas of sales, marketing, and influencer channel development, as well as operational efficiencies.

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