Hello, we are a small cloud SaaS startup. We are planning to hire 3 sales people. I am guessing what should we look when hiring and how much bonuses should we pay that would motivate them to close more deals? Our software price is $40 USD per user. For example, I am thinking to pay 30% of deals monthly value for 5 months after the deal is closed. Which method is most efficient and motivates salesman's to work close more deals? (note that company shares can't be given) Anyone has experience on hiring, managing and expanding international software sales team? Thank you.

Assuming each sales person is carrying a $1,000,000 quota then that works out to 2084 new users per year.

That translates to an annual bonus of $125K USD on target earnings.

If you are looking to motivate more sales, then I would suggest a sliding bonus structure that increases as reps sell more. I would also include a mechanism to prevent sales reps from sandbagging (defering deals for higher bonus).

Assuming a monthly quota of 175 new users acquired per month.


175 or less new users per month = 30% of value of first five months value

If attained quota from previous month (over 175 new users):
0 to 175 new users earn bonus of 30% of value of first five months value
175 to 350 new users earn bonus of 45% of value of first five months value
350+ new users earn bonus of 60% of value of first five months value.

I would also not underestimate the competitiveness of sales people. Run sales contest for your reps, and give the top rep for the previous month perks for winning. It could be as simple as a prime parking spot, or gift certificate for dinner.

Have you considered a reseller/partner program/affiliate program? These programs are typically commission only and are very scalable as they do not require the same labor costs as a direct sales force.

I've had great success growing international partner programs & affiliate programs for various SaaS companies.


Mick Kitor

Answered 6 years ago

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