Our Pillar Partner, PhoneWorks, recently published a white paper "2010 Sales Compensation Study". Here are the hightlights of their finding.
During September 2010, Phone Works LLC conducted an online survey regarding 2010 compensation for sales development and inside sales. For purposes of this report, sales development and inside sales are defined as:
Sales Development: Representatives who use the phone and Internet to generate leads and opportunities for sales; they do NOT close sales but pass qualified leads and opportunities to inside sales, field sales or resellers.
Inside Sales: Representatives who use the phone and Internet to nurture leads throughout the purchase cycle, carry a sales quota, and obtain buyers’ commitments to execute orders. Inside Sales reps may share territories and a commission structure with field sales organizations.
Key Findings – Sales Development
Sales Development teams continued to grow in 2010, with 33% of respondents reporting new sales development teams in 2010. Respondents with teams in both 2009 and 2010 report an average growth of 47% in the number of sales development reps. Projections for 2011 indicate a continuation of growth at a similar level (46%).
Compensation levels increased an average of 8% for sales development reps
Average base salary increased from $51,000 in 2009 to $55,000 for 2010
Average target compensation increased from $79,000 for 2009 to $ 85,000 for 2010
Compensation for sales development managers increased
6% for average base salary, from $84,000 in 2009 to $89,000 in 2010
5% for average target compensation, from $134,000 in 2009 to $141,000 in 2010
Average base salary for sales development reps is 66% of total compensation
80% of sales development reps receive some form of "commission" on closed sales
50% of non-commission incentives are based on "results" – number of qualified leads or opportunities
37% of respondents use SPIFF regularly and 15% use SPIFF occasionally.
Sales development reps are on track to achieve an average of 67% of quota for 2010
Primary basis for establishing quota for sales development reps is the number of qualified leads produced
Challenges for Sales Development
34% of respondents cite top challenges as items not within the direct control of sales development, including the inability to directly affect revenue, relying on others to close deals, pooled commission funds, shared commissions, and problems with tracking leads once the lead is handed off (Chart 22).
Key Findings – Inside Sales
Inside Sales teams continued to grow in 2010; the total number of IS reps within the respondents’ companies grew 30% for 2010 over 2009. The respondents estimate an additional 20% growth in number of inside sales reps for 2011.
Companies with field sales teams (68% of respondents) reported an average growth rate in number of field sales reps of 4% for 2010 over 2009 and are projecting a 10% growth in field sales for 2011 (Chart 36).
Compensation is shown for both inside sales reps and inside hybrid reps, as 47% of respondents report having some hybrid reps (24% of respondents have 100% hybrid reps). Hybrid reps function primarily as inside sales reps and visit customers in the field periodically.
Average Target Compensation for inside sales reps in 2010 is $103,000, virtually the same as for 2009 ($105,000).
Average Target Compensation for inside HYBRID sales reps in 2010 is $124,000.
Average Base Salary for inside sales reps for 2010 is $63,800, up from $56,000 in 2009, a 14% increase.
Average Base Salary for inside hybrid reps for 2010 is $73,800.
Charts 53 and 54 show TARGET ranges for inside sales and hybrid reps.
Charts 55 and 56 show BASE SALARY ranges for inside sales and hybrid reps.
Quotas for inside sales reps and hybrid sales reps have increased at slightly different rates:
IS Quota 2009: $ 1.8M 2010: $ 2.1M 2011 Projected:$ 2.5M
Hybrid Quota 2009: $ 1.9M 2010 $ 2.2M 2011 Projected:$ 2.8M
As reported by respondents, the average percentages of quota achieved in 2009 and anticipated for 2010 are:
IS Reps 2009: 57% 2010: 63%
Hybrid Reps 2009: 55% 2010: 61%
Inside Sales Management Compensation
Average target compensation for inside sales managers for 2010 of $156,000 increased 20% over 2009.
Average base salary for inside sales managers for 2010 of $103,000 increased 16% over 2009 ($89,000).
Senior Inside Sales Management Compensation
Average target compensation for 2010 is $235,000, up from $224,000 in 2009, a 5% increase
Average base salary for 2010 is $148,000, virtually unchanged from 2009’s $149,000.
Challenges for Inside Sales Compensation Structures
Approximately 50% of respondents are looking to balance compensation by making adjustments to
Base vs. Commission
Individual vs. Team
Inside vs. Field
Inside Sales Territory Assignments
Pay vs. Performance
Deal Size vs. Commission
Another 20% of respondents are concerned about having a competitive compensation plan to attract new inside sales reps and retain high performers.