How Much to Pay a New Sales Rep

Photo by Fabien Blank via Unsplash

Let’s talk money.

Today, we’re going to discuss real-world pay rates for Inside Sales Reps.

Although I have decades of experience hiring sales reps, I won’t be sharing anecdotes about the “good old days” when we made peanuts compared to today’s Millennials, worked longer hours and then walked home uphill through 2 feet of snow.

Instead, to keep the data relevant, I’m going to share the numbers I’ve seen in the past 12 months. During this time, I’ve been involved with hiring more than a dozen sales reps across 6 different companies. In addition, I’ve spoken to more than 20 sales managers who were actively hiring reps.

Here’s what I’ve seen.


Entry Level Business Develop Rep (BDR).  Also known as Sales Development Rep (SDR), Lead Generation Rep, Lead Development Rep.

Most companies are hiring BDRs straight out of college or with 1-2 years of work experience that is not necessarily sales. Managers are looking for hustle, aptitude and attitude vs. sales experience. The BDR will be emailing and calling leads with the goal of setting up appointments or meetings for a “Closer”.

Base Salary $35-$40K.  Variable $25-35K.  Total On Target Earnings (OTE) $60-$75K.


Account Executives (AE). Also knows as Inside Sales Rep, Enterprise Sales Rep, Closer.

In companies that have existing teams with more than 5 reps, the AE is often a former BDR who has worked his way up and been promoted within a company.  For new teams,  smaller companies and businesses that need to uplevel their talent, we have hired external candidates directly into these positions.

AEs require 2-3 years of B2B sales experience. Since most of my customers are tech companies, we are usually looking for experience selling software, SAAS or technology. Here we are looking for relevant experience, an understanding and use of a sales process, and the right hustle/attitude/aptitude.

Base Salary $40-$55K.  Variable $40-$55K. OTE $80-$110K.


Experienced Account Exec and Enterprise Account Exec. Also known as Corporate Sales Rep, Inside Sales Rep, Enterprise Sales Rep (plus a bunch of made up titles trying to hide the fact that this is a sales person).

Here we require someone who has 5-10 years of relevant sales experience. We are usually targeting candidates in the same industry, who have worked in sales for competitors or partners and who are seasoned sales professionals. Often these reps will be working the largest opportunities while having less direct supervisions from management.

If I am hiring remote sales reps, I am looking for candidates like this who have a proven, successful track record of working remotely in sales.

Base Salary $45-75K.  Variable $45-75K.  OTE $90-$150K.


Where you are will affect what you make.

Location, Company Size, Experience and Industry all matter. 

There are numerous factors that will affect what you need to pay to hire good talent which is why I listed the ranges above.

Location. In towns where there is a larger pool of college graduates and entry level educated employees to hire from, I’ve seen an influx of companies building out Inside Sales teams. This includes places like Raleigh, Salt Lake City, Redmond, Pittsburgh, Seattle, plus any other “hot city” of the week.

In these cities, competition for good candidates is fierce. Many BDRs will have multiple interviews and offers from several companies. Almost everyone is promising a “cool work space with free food and ping pong” plus nearly identical compensation + benefits packages.

Here, my clients have set themselves apart by offering things like a fast paced startup environment, the chance to make an impact beyond just churning out calls and career advancement opportunities.

One suggestion – if you find someone you like – be prepared to make an offer and hire quickly. If you wait a week, you may lose them.

 

Company Size. Despite all the articles I read on startups not paying well, I’ve found that hiring experienced sales reps for a startup often requires paying a higher salary than it would to hire them for an established company.

This is because a startup will be competing with more established companies who will generally offer benefits like 401Ks, better health care benefits, a career path and some measure of security (sort of…other than the inevitable RIFs and Re-Orgs).

Enterprise Account Executives and experienced sales reps will often want a higher salary to offset the the risk of joining a startup. If you want to attract seasoned talent, be prepared to pay a premium.

That said, some people love working for startups and aren’t cut out for the corporate world. Others have done stints in both and are willing to take a pay cut to join a fast paced startup. I look for these people when recruiting for startups.

Startups can also offer equity to attract talent – especially to land experienced talent at below market rates. Many people are interested in equity and if it works for you, I’m all for it.

 

Experience. Generally, the more experienced the rep, the higher the pay. That said, for the positions discussed  here, the ranges have tended to hold true. Most companies will not pay extra for experience that is above and beyond their requirements.

 

Industry. My experience has been almost exclusively with tech companies and startups. All are selling B2B. The ranges reflected here may or may not apply to B2C or other industries.

 

The Hidden Paycheck. My friend the Sergeant likes to refer to certain informal benefits as “the Hidden Paycheck”. These can include things like working for a good manager, being given flextime to help when life issues come up, the ability to work from home, being treated with real respect, and getting good mentorship.

If you offer “hidden paychecks” then make sure your candidate is aware of them. Once a rep’s basic financial needs are met, the hidden paycheck can help you land a new hire even if you cannot afford to match their best offer.


This is the first post of a 3 Part Series on “Creating a Sales Team for a Startup”.

Part 1 – How Much to Pay a New Sales Rep

Part 2 – Creating an Effective Commission Plan

Part 3 – The Truth About Setting Sales Quotas

Shoot me an email or put a note in the comments if you’d like to provide your insight on any of these topics.


Are you having recruiting, hiring or turnover problems with your sales reps?  

Are you building a new team and want to get it right from the start? 

Contact me here to learn more about how Inside Sales Dude can help.


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