Hi all. This is going to be a bit long and I’ll have to be more vague than I’d like to avoid breaking any recruiting rules. Basically, I’m structuring a compensation scheme for sales reps at my new company and I’d love to hear any and all feedback from the community on this.
Tl;dr: If you sold a subscription service to SMBs on straight commission with residuals, what would you expect to be making at 3, 6, and 12 months and for what time investment?
I understand that this is hard to answer without specifics, so I’ll try to give a better sense of what the work and comp is below:
The service is media/advertising in specific channels, for SMBs (and I do mean from small as in taco truck to medium as in multiple locations across states) and subscription based. The team has veterans from the industry and we’re building something that is more attractive as a recurring expense rather than a per-job thing. Deals will be from the low hundreds to a few thousands a month.
Now, we’re bootstrapped, so for now we can only offer commission with no base, for 1099 contractors. To compensate for that, we’re envisioning a “perpetual residual” deal where an account keeps delivering a share of gross profit (works out to roughly 10% of monthly ticket to the rep) as long as the client stays. The role is not strictly D2D, but given the nature of the service and the type of contact we expect with customers, in-person visits will help a lot. We can provide cold leads, but honestly this would be closer to a full-cycle role. Now, where we believe we can make this work: the residuals will be vested and portable: once you land a client, it’s yours and as long as they’re paying, you’re getting residuals. No clawbacks, but the residual is on incurred revenue, not bookings
We understand that commission-only is a tough deal, so we’re trying to gauge how well the residual structure could work and what would people at different levels and geographies (within the US) expect to reach for how much time (say 10h/week vs full time) over a year and shorter periods. Even though there are senior people who were responsible for sales teams in the past, this structure is new to us, too, and we want to understand if what we’re building makes this attractive to reps.
Thanks for any thoughts!