A typical SaaS (Software as a Service) organization has several sales roles that contribute to its overall success and growth. Some common roles in SaaS companies include – Sales Development Representatives (SDRs), Account Executives, Solution Consultants, Customer Success Managers (CSMs), Account Managers (AMs), Renewal Managers, and Sales Managers.
Before discussing the sales roles and the type of compensation associated with them, it is important to understand the different types of deals that may exist in a SaaS company. Though deal types can be specific to each company, the following are some generic types that are widely used across all companies.
1. New Business, which is a new customer signing their first contract with the company.
2. Renewal deals, which are with existing customers that are extending their contract once the current one expires.
3. Debooking deals, which are situations where a customer backs out of a deal and often require a clawback of the commission paid to the rep.
4. Expansion deals, generally identified by CSMs or AMs. These can include:
- Upsell/Upgrade deals, which involve selling more features of the same product.
- Cross-selling deals, involve selling additional or complementary products to the customer.
- Add-On deals, which involve selling additional products that work with the original product.
Now, let’s discuss the different types of roles that exist and how they are compensated.
Sales Development Representatives (SDRs)
- SDRs are the frontrunners of the sales cycle, identifying and reaching out to potential customers to generate leads. They are typically tied to New Business Deals in an organization.
- Their primary goal is to find the right customers and ensure they are dealing with a decision-maker. If the lead is qualified, the SDR will pass it on to the Account Executives.
- Once passed on to the AE, they typically are not responsible for any further closing of the deal. The most common way to incentivize SDRs is by compensating them based on the number of qualified leads they push through.
Account Executives
- The new prospects are passed on to the AE who then takes over the responsibility of closing the deal. They present the product(s) and prove how they will solve the customer’s problems.
- Compensation is a dependent deal being closed and can differ based on specific scenarios. If a deal is passed from an SDR, it is typically a New Business Deal. If they can get the customer to buy more than previously discussed, it can be considered an Upsell deal, etc.
- All these scenarios can warrant different compensation structures to encourage reps to push the best deals through the sales cycle and ultimately grow the business.
Customer Relationship Managers, Account Managers, and Renewal Managers
- Customer Relationship Managers, Account Managers, and Renewal Managers work together during the post-sales process. Sometimes, these roles are merged for simplicity or lack of resources in a company.
- The basic distinction between the three is that CSMs’ primary role is to ensure that the customer is getting value for money on their existing product and identify if there is scope for opportunity expansion. The AMs use their business sense to create new opportunities for the customer or follow up on the opportunities identified by the CSMs. Renewal Managers are primarily responsible for renewing contracts, product, and pricing updates, and ensuring customer retention by focusing on high-value areas.
- Another key metric that all three roles might get compensated on is the Churn Rate, which refers to the rate at which existing customers cancel their recurring subscriptions.
Overall, the different sales roles and their compensation structures within a SaaS company can vary greatly depending on the company’s specific needs and goals. Understanding the different types of deals and roles can help to ensure that the sales team is properly incentivized and motivated to drive growth for the organization.
