Earlier this month, Iconiq released it's 2023 guide to sales compensation. The report covers how SaaS companies are structuring their sales compensation plans, the split between different types of sales incentives, quota levels for different types of sales roles, as well as benchmarks for commission payments, OTE, and more.
The data comes from a survey of 236 SaaS go-to-market leaders conducted in March 2023 by Iconiq. There is a wide range of company ARR scale represented, from $5M all the way up to $1B+, and a mix of mostly top-down and hybrid sales motions. The companies span a wide range of industries and geographies, with the biggest group, about 40%, located in the western United States.
One of the key trends Iconiq covers is the way sales compensation is changing in 2023 as the market has shifted. Quota attainment has decreased in 2023 as the economic environment has changed. In response, companies are tightening up their compensation plans by focusing on the bottom line over activities, leads, and other metrics which may be a step removed from profitable revenue growth.
At Palette we believe that strong performance should be rewarded. Similarly, the survey found that 82% of SaaS startups use accelerators and use 71% use spiffs. Interestingly, over half of companies have a formal clawback plan. While there can be many reasons for using clawbacks, they are often a result of miscalculated commissions, suggesting that there is room to further operationalize and automate commission plan administration.
The study is full of insights and stats around all things SaaS compensation. You can read the full report here.