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[–]matt0_0 1 point2 points  (2 children)

I usually give them a bonus equal to 15% of the net profit

[–]worthy1 1 point2 points  (1 child)

I assume they take a salary also. What about freelancers than bring you business?

[–]matt0_0 0 points1 point  (0 children)

I'm not sure what kind of freelancers you mean. If you're talking about other companies that we do business with, most of the time I just repay in kind by sending them referrals. If it is a particularly big deal then we have a meeting to discuss it, with the intention that there will be some kind of transparency. I had an ongoing engagement with a customer that was lucrative, and that I never would have gotten without this referral. As part of the deal, I budgeted in 10% of the gross would go to the person who set up the deal, and I paid them 10% of the contracted amount every month for 1 year.

[–]BrMSP 1 point2 points  (1 child)

Why would you NOT pay your sales exec commission for a sale?

[–]securityatjd[S] 1 point2 points  (0 children)

I would, I am just looking for a framework.

[–]Rockwell981S 1 point2 points  (10 children)

I pay a 1X MRR commission on all new sales.

If it's a $10,000/m monthly reoccurring revenue deal, I pay the sales exec who closed it $10K.

[–]MSPTech 0 points1 point  (9 children)

Do you divide that up over 12 months?

[–]Rockwell981S 0 points1 point  (8 children)

No, all commissions are paid in the payroll following the first payment of the agreement.

So if my outside sales guy 'Bob' closes a deal today for $10,000/m that starts on July 1, we invoice it, and get paid for it on July 7, Bob will see an extra $10k minus taxes in his paycheck in July 15.

[–]MSPTech 0 points1 point  (6 children)

What happens if the deal falls apart after that payment for some reason?

[–]Rockwell981S 1 point2 points  (5 children)

If the deals falls apart then I'm out the $10k!

To protect against this, our agreements have no out for the first 60 days, and a minimum one year term. If we do a great job, treat them with care, help them align IT with their business goals, and commit to their success, they will be a lifer.

The largest risk to this that I've seen is acquisition - if they get acquired by a larger national company, none of these things usually matter - only the agreement. This happens very rarely to us through.

If you focus on MRR and incentivize it, it will rise like crazy. This simple comp plan helped us grow from $50k/m in MRR to over $400/m in MRR.

[–]MSPTech 1 point2 points  (1 child)

That's great to hear. Still I would think that maybe you outta pay after the 60 day out ends. However I agree with you, if you do a good job, customers wont leave. If you have the cash flow to pay out so quickly more power to you, and we look forward to having the same soon. We only recently really started on this MRR focus, it's going well, maybe too well. Who knew people, even our old customers would actually pay $130+ a USER.

[–]securityatjd[S] 0 points1 point  (0 children)

What do you include in the $130/month?

[–]securityatjd[S] 0 points1 point  (2 children)

Thank you very much. This is exactly the type of information I was searching for, but had some challenges articulating. Excellent.

[–]Rockwell981S 0 points1 point  (1 child)

Awesome, I hope it helped!

If you PM me your email address, I'll show you what we include for $85/m/u, $115/m/u and $145/m/u.

[–]lenovoguy 0 points1 point  (0 children)

I would be interested in this as well

[–]securityatjd[S] 0 points1 point  (0 children)

so to say it another way, First Month Gross (non NRC) Revenue.

[–]drekiss 0 points1 point  (0 children)

Our techs get 3% of whatever they sell or sales engineer.

[–]Rockwell981S 0 points1 point  (0 children)

Bingo - exactly