The Blueprint: How to build a winning commission structure

1. Structuring Your Commission Plan

Commission structures aren’t static.

They’re going to evolve as you grow and scale your business. And that applies - regardless if you’re going from $10m to $20m, or $50m to $100m.

The main thing to remember is that it’s got to align with the needs of the business.

So what works for your fellow sales leader at another company isn’t necessarily going to work for you.

With that being said, we wanted to share Cognism’s journey on commission structures. Keep scrolling to find out more 👇

2. The Evolution of Cognism's Commission Structure

We’ve been on quite the journey with our commission structure. And maybe you’ll be able to relate and take some advice from it.

And before we get into the nitty-gritty of how our commission structure has changed as we’ve grown, here’s a little snapshot of the different approaches we’ve taken ⬇️

Starting off, let’s deep-dive into…

Cognism's previous commission structures

Meetings attended (for SDRs)

To begin with, our sales team was measured purely by meetings attended. David explained more:

“It was a very high meetings attended target. And that was right at the start of the business in 2018, when we didn’t know our ICP. And we also didn’t have an operational structure.”

“So at that point, our aim was to collect as many conversations as quickly as possible. Now, the downside of this system was that the quality was very varied.”

Annual contract value (for AEs)

Here’s how you calculate it 👇

Paying AEs on ACV is good when you’re first starting out as a company. In the early stages the company’s value primarily comes down to the annual recurring revenue that you make.

However, as you grow and expand you need to look further than ACV (see the TCV for AEs section for more, under “current commission structure”).

Sales Qualified Opportunities / SQOs (for SDRs)

SDRs were looking to book meetings that fit a specific criteria, in order to be rewarded in terms of commission. And it was up to the AE to judge that.

This was implemented at a time when we didn’t have an operational structure. So it was the right approach at that time.

3. Cognism's Current Commission Structure

Qualified meetings attended + revenue sourced (for SDRs)

The switch over from a meetings attended target to a part revenue target incentivises SDRs to bring quality leads into the pipeline.

Here it is in a nutshell:

Every SDR has a set number of accounts that they own.
This structure isn’t based on the potential subjectivity of an AE.
75% is meetings attended; 25% is revenue, so SDRs are aligned to the AEs.

David said:

“The meetings attended side of things focuses the rep on quantity and getting our foot through as many doors as possible. And then the revenue piece still rewards and motivates SDRs to focus on quality.”