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If you’ve worked in sales, revenue operations, or finance for any amount of time, I don’t have to tell you how important sales compensation is. You already know the right sales compensation plan can motivate your team, improve their performance, and boost overall job satisfaction. And, conversely, you already know the wrong compensation plan can do the exact opposite- demotivate teams, decrease performance, and cause high rates of sales rep turnover.

sales compensation statistics

So, what makes a good sales compensation plan in 2021? The answer may surprise you. In fact, five years ago,  the components of a good sales compensation plan were dramatically different from what makes a good sales compensation plan now.  

Ready to learn more? Keep reading for 28 statistics of the current state of sales compensation!

The Current State of Sales Compensation

These statistics are intended to paint a picture of how sales reps are currently being compensated, how sales compensation has changed over time, and the current state of sales teams in general.

  • On-target earnings, or OTE, for the average sales rep is $115,000 (source).

  • A 60:40 commission structure is the standard for average US sales organizations. Although, commission structures vary dramatically across industries and companies (source).

  • On average between 40% and 50% of an employee’s preferred total award experience has nothing to do with the physical reward itself, but rather the award presentation and professional development (source).

  • Current median sales pay by industry (source):
    • Wholesale and Manufacturing Sales Representatives: $61,660
    • Insurance Sales Agents: $50,600
    • Advertising Sales Agents: $51,740
    • Real Estate Brokers and Sales Agents: $50,300
    • Securities, Commodities, and Financial Services Sales Agents: $64,120
    • Door-to-door Sales Workers, News and Street Vendors, and Related Workers: $26,430
    • All other: $33,200

  • The average base salary for a SaaS salesperson is $51,040 (source).

  • In a recent study of more than 160,000 salaries, job aggregator Indeed calculated the national average base salary to be $64,379 for a SaaS account executive and $49,216 for an account representative (source).

  • Workplace hub Glassdoor calculated the average base salary for a SaaS specialist to be between $34,613 and $53,000 (source).

  • And The Bridge Group, an inside sales consulting firm, calculated the average base salary for a SaaS inside sales rep to be $60,000 — with on-target earnings of $118,000 (source).

  • Nearly 60% of companies say that quotas are set as a collaborative effort between the CEO with input from senior management (source).

  • More than 40% of surveyed sales leaders missed revenue targets in 2020 (source).

  • 58% of sales teams said that they will increase the size of their workforce in the next year (source).

  • In the 1990s, approximately 25% of US companies were using non-cash rewards compared to 80% in 2018 (source).

The Importance of Smart Sales Compensation

The sales compensation statistics in this section are intended to underline the importance of being strategic about sales compensation.

  • 43% of sales reps say they would be willing to leave their organization for just a 10% salary increase (source).

  • 56% of employees that leave their current job say inadequate pay was the motivating factor (source).

  • 58% of people say that they would feel more engaged if leaders gave recognition to the job they were doing (source).

Sales Productivity & Performance Statistics

This next section is meant to highlight the current state of sales performance, as well as the different factors that influence sales productivity and performance.

  • Only 37% of sales reps’ time is being spent on revenue-generating activities (source).

  • 51% of sales organizations are using data to analyze and improve performance (source).

  • 51% of sales professionals state that their companies use data to assess their sales performance (source).

  • Sales agents who spend at least 3 hours every day on sales-related activities are more satisfied with their job (source).

  • 65% of sales managers say that the biggest challenge for them is the lack of time and resources to perform their job (source).

  • Only 24.3% of salespeople exceeded their quota last year (source).

  • Happy workers are 12% more productive and unhappy workers are 10% less productive (source).

The Challenges of Sales Compensation 

Although we’d love to paint an entirely rosy picture of sales compensation, these next statistics highlight how difficult it can be to get sales compensation right.

  • 64% of organizations reported correct quota setting as the major challenge for their sales compensation program in 2017 (source).
  • Only 17.6% of sales professionals rate their job satisfaction as outstanding (source).
  • Among the top challenges in sales for 2020 include the disconnect between sales managers and sales professionals; relationship management and quota attainment; the usefulness of CRM tools (source).

Successful Sales Compensation Programs

Last but not least, this section will demonstrate how an effective sales compensation strategy can have a huge impact on productivity and revenue generation.

  • 90% of top-performing companies utilize incentive programs to reward their sales associates (source).
  • Properly structured incentive programs can increase employee performance by 44% (source).
  • Companies utilizing an incentive program reported a 79% success rate in achieving their established goals when the correct reward was offered (source).

Key Takeaways About Sales Compensation in 2021

Now, if you’ve made it this far, you’re probably asking yourself, “So what does all of this mean for me?” So glad you asked! 

Here’s our take:

  • Salaries, commission structures, and sales incentives vary based on industry. This means there is no one-size-fits-all approach to sales compensation planning. So we recommend, doing your own research and relying on the data to guide your sales compensation planning process.

  • Although money certainly motivates sales teams, a combination of monetary compensation, non-monetary compensation, and good old-fashioned recognition will motivate your teams most effectively and will increase overall job satisfaction.

  • Sales reps need more time to sell. They’re spending their time on all sorts of administrative work, data entry, and other non-selling activities. As a sales manager or operations leader, it’s time to investigate operational inefficiencies to buy more time for your reps.

  • Across the board, organizations who implement a sales incentive program and who compensate reps well see more productive sales reps and generate more revenue in general.

About Spiff

Spiff is a leading sales commission platform that automates commission calculations and motivates teams to drive top-line growth. With a combination of an intuitive UI, real-time visibility, and seamless integrations into current systems, Spiff is the first choice among high-growth businesses. The platform enables finance and sales operations teams to self-manage complex incentive compensation plans and provides transparency for sales teams. See Spiff in action! Schedule your demo today.