A Guide to SDR Compensation and Commission Plans


Aoife Daly

A Guide to SDR Compensation and Commission Plans


Reading Time: 6 minutes

A Guide to SDR Compensation and Commission Plans


Aoife Daly

Content Marketing Manager, Operatix

You’ve hired a team of talented SDRs, trained them to a high standard and given them all the tools needed to enable their success. Yet there is another problem that will creep up on you – the high rate of SDR churn. Demand for experienced sales representatives is at an all-time high and continues to grow, making it more difficult than ever to retain top-performing reps.  If you don’t offer a competitive SDR compensation plan and reward outstanding performance, there’s no doubt they may be tempted to look elsewhere – and they won’t have to look far.

While employee retention doesn’t just boil down to having a great SDR compensation plan, an attractive incentive scheme and commission plan is the first step in creating a motivating sales environment. Not to mention the fact they will help you stand out from the competition and attract more experienced representatives.  

The most basic part of compensating an SDR is via their base salary. While the average base salary is undoubtedly increasing along with the demand for representatives, it is estimated to be around £35,000 in London and $58,000 in San Francisco as of March 2022 according to Glassdoor. However, an average base salary will attract an average SDR; if you’re looking to hire sales representatives with a track record of high performance, you can expect to pay more.

Once you’ve figured out the base salary, you can turn your attention to creating both an incentive and commission structure, both of which often go hand-in-hand when building an attractive SDR compensation plan.

This guide to SDR compensation was taken from our SDR Handbook, a comprehensive guide to building, managing and enabling a successful sales development team. Download this free eBook here.

SDR Commission Plans

A commission plan is a type of long-term monetary incentive that acts as an add-on to the employee’s base salary and is awarded based on the number of meetings booked or sat, pipeline generated or deals a representative closes or another set performance variable. 

Most experienced SDRs seek a handsome commission plan, and it’s equally as beneficial for the business as it is for the rep. A tiered commission structure rewards employees for hitting above their quota, boosting morale and productivity. The more deals they close, the more money they’ll have on their paycheck, encouraging reps to go above and beyond the bottom line. 

When building a commission plan, consider:

  • What is the key objective, and how is it going to be tracked? – be clear about what commission is awarded for, such as meetings booked, deals closed, calls made or opportunities created.
  • What is your budget? – clarifying this ensures you aren’t making promises you can’t keep, as well as helping to decide upon if and where to cap commission, commission rate, and what type of structure to go with.
  • What are competitors paying their SDR teams? – be sure you’re using an appropriate rate by researching the market. In order to retain your salespeople, you will need an enticing commission program. If you pay below the going market rate for your industry, you risk losing your best-performing reps.

There are multiple commission scheme structures to consider, all of which bring their own benefits. Below are the most common commission structures used in a sales environment.

SDR Compensation

Base salary and commission

As the name suggests, this structure is where the salesperson enjoys a base salary with commission on top, and is the most common type. It provides security to sales reps as they’re guaranteed a minimum payment every month, yet boosts both motivation and morale as it rewards hard work. The average salary-to-commission rate is around 70:30.

Tiered commission plan

A tiered commission plan is another common structure used in a sales environment and is similar to the base salary and commission structure. With a tiered commission structure, however, there are tiers with increased expectations/goals and commission rates rather than a flat rate of commission. As they reach the different benchmarks, they will make a higher percentage on each deal. This adds an element of competition and motivation, as well as rewarding reps as they make their way up the tiers. 

Straight commission plan 

Also known as a full commission plan, this is when the sales reps don’t have a base salary and instead have an income based on commission alone. This attracts experienced, high-performing sales reps, but is only suitable for businesses with short sales cycles. While highly motivating, the lack of stability and high rate of commission means this plan comes with a level of risk. However, this model may be an option for start-ups that don’t have the resources to pay representatives who aren’t performing. 

SDR Compensation Plan: Incentives

While you’ve likely seen them pop up on LinkedIn as of late, gamification and incentivising aren’t just buzzwords. Rather, they’ve become a tool to not only motivate and engage employees but give them that all-important job satisfaction that will keep them on board.

Incentives are more important than you may think; a study by Glassdoor showed that 57% of candidates reported them as being one of their top considerations before accepting a job offer. Another study found that 85% of the workers were more motivated to do their best when an incentive scheme was in place.

In short, incentives are a reward for outstanding performance and reaching pre-agreed goals. Gamification, on the other hand, is adding an element of game-playing or competition into the work environment. We know both to improve productivity, increase team performance and boost employee morale, proving to be an important part of getting the best results out of your team.

Putting an incentive scheme in place

When launching a new incentive scheme, ensure to answer the following questions:

  • What are the goals and objectives of the incentive scheme? – ensure they are measurable as well as motivating yet achievable. Consider your team’s pain points and the areas where you believe they need extra motivation.
  • What incentives work best for your team? – some employees may prefer a financial bonus, while others are more motivated by a paid experience day. If your SDRs do not want the prizes, it will not motivate them to work harder and achieve the target. Survey your employees to see what motivates them to ensure your incentive scheme is successful.
  • How are you going to measure performance and results? What are the key performance indicators (KPIs)? – both you and your team should be able to track their progress towards the end goal, so identify KPIs in advance. Doing so will allow them to increase their productivity and performance, giving them an additional push if they fall behind. Set up your own automated tracker, such as an Excel spreadsheet, or invest in incentive software.
  • What is the budget? – you don’t want to promise extravagant gifts in return for results if you can’t keep up your end of the bargain.
  • How long should the incentive be in place? – there are benefits to having both long-term and short-term incentive plans, so consider having a mixture of both. Short-term goals create a sense of competitive urgency, causing a spike in performance and motivation. Long-term goals improve company culture and more consistent productivity.

A successful incentive program and SDR compensation plan are those that are well thought out, measurable and use a reward system that motivates employees. Sending out a survey that allows your SDRs to rank what type of incentives would be attractive to them is a surefire way of making sure your scheme yields the results you want.

The most popular types of incentives include: 

  • One-off monetary bonuses 
  • Apparel and merchandise 
  • Entertainment such as concert tickets and experience days 
  • Gift cards and subscriptions 
  • Technology and electronics

As well as surveying your SDR team, monitor what incentives drive the KPIs and have the most influential impact on team performance.

SDR compensation

SDR Compensation Plan Takeaway Points:

  • The average base salary for an SDR is around £35,000 in London and $58,000 in San Francisco.
  • Incentivising your sales function can increase motivation, performance and job satisfaction, helping to retain your top performers.
  • A study has found that 85% of workers were more motivated to do their best when there was an incentive scheme in place.
  • There are multiple types of SDR compensation plans, including base salary and commission, tiered and straight commission plans.

About Operatix

Operatix is a Sales Acceleration company specialized in supporting B2B Software vendors to identify new revenue streams, increase qualified sales pipeline, and accelerate channel development across Europe and North America. Operatix has a wealth of experience in working with the biggest tech players worldwide as well as a multitude of emerging software vendors.

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Digital transformation is changing how companies buy and use business solutions, making vendors re-assess the capabilities of their channel ecosystem. With channel dynamics in constant flux, vendors need to be ready to cut ties with partners that don’t share their vision or have connections with the right B2B buyers.


Operatix has supported numerous vendors in their path to Channel transformation by assessing current partners and recruiting new partners that are more aligned with their new channel strategy. Once the right partners have been identified, Operatix built scalable outbound sales development programs that accelerated their routes to market.

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Identifying the accounts that are more likely to buy from you is part of our expertise. We will research the market, identify verticals and industries that can benefit from your solution and set up qualified sales engagements for your teams to kick-off the sales process. 

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Our team will identify new sales opportunities within the strategic accounts that you haven’t been successful in penetrating through your sales & marketing efforts. By applying the ‘Challenger Sale’ methodology we use a tailored, multitouch approach to connect with prospects, generating qualified sales engagements for your team and ultimately increasing your pipeline.

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Using a proactive outbound sales approach has been proven to be one of the most effective methods to engage with prospective customers. By applying the ‘Challenger Sale’ methodology we use a tailored, human approach to getting in touch with prospects to increase your qualified sales engagements and ultimately generate more pipeline.

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If your marketing leads aren’t converting, it might be a lead qualification issue. Operatix can help sieve through leads that need further qualification, so they are ready for an AE or sales team member to engage with.

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At Operatix we will support your 1:1, 1:few or 1:many approach to get your team in front of decision makers in the accounts that matter the most to you. 

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Generating Pipeline for our clients is our key-objective. And we do that by using a multi-touch, multi-channel approach to generate qualified sales engagements for our customers’ sales teams.   

Account Intelligence / Deep Dive

Understanding buying centres, hierarchies and relevant personas in strategic accounts is a fundamental step to increase conversion rates. By leveraging account intelligence in a sales conversation your team can tailor their message and provide value to their prospective customer. But sales & marketing teams often struggle to dedicate time and resources to do the deep research and this is where Operatix can help.

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Finding quality data is an on-going challenge for B2B Tech vendors. The accuracy of data platforms is questionable and that is why Operatix developed a manual process to identify & verify contact details for decision makers within strategic target accounts.

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Operatix can develop Sales Playbooks that enable teams to sell more effectively. Your Playbook will be fundamental to implementing the correct messaging, accurately position your solution against competitors, and adapting the communication of your value proposition to different buyer personas.

Lead Qualification

If your leads aren’t converting, it might be a lead qualification issue. Operatix can help filter through leads that need further qualification, ensuring that they’re ready for an AE or sales team member to engage with and progress through the funnel. 

Partner Portal / Marketing Concierge Service

Vendors often spend thousands of dollars building multifunctional Partner Portals to help channel partners educate their teams, manage opportunities, and create marketing programs. Still, these portals are often underutilized due to lack of bandwidth and capacity from vendors to offer support in enabling their partner community. Operatix, through their Partner Development team, can support your partners to make the best use out of your partner portal, managing the relationship with your partners and helping them set up co-marketing campaigns to drive more revenue for both businesses. 

Marketing & Sales Alignment

The sales development function is often seen as the “glue” that brings sales & marketing teams together. By working as an extension of your teams, Operatix will be your predictable source of pipeline, sales & revenue.

Optimization of MDF

Market Development Funds are an important component of any channel ecosystem, though vendors believe they are not maximizing the return on investment they should be getting from their MDF programs. At Operatix, we build scalable outbound sales development programs that will give you the visibility of return over the invested spend and will provide clear value for your channel partners.

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The 80/20 rule is still very applicable to the channel, which means that investing in partner productivity should be a priority for vendors looking to grow their businesses. Operatix can increase partner productivity and shorten sales cycles, by identifying ready to engage sales opportunities for your most valued channel partners.

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Whether your business decided for a Tier 1 or Tier 2 distribution model, Operatix can help your channel partners get to revenue quicker. By providing qualified sales engagements to your channel partners we can accelerate your route to market with tangible and easily measurable results.

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Recruiting the right Channel Partners is the first step for a successful channel program. Operatix has helped over 350 B2B Software vendors recruit suitable channel partners across EMEA and North America, supporting them to scale and expand their presence in different geographies and verticals. 

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To truly work as an extension of our client’s sales & marketing teams, we have also adapted our business models to show how our clients operate, and how their success is measured. With our risk/reward business model your investment is proportional to the results our team delivers.

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By outsourcing your sales development and partner programs to Operatix; we reduce headcount and the challenges that come with managing people, technologies, and processes. We take care of your sales development, so you can focus on what matters the most: growing your business.

Revenue Acceleration

Operatix helps your business get to revenue quicker. By providing qualified sales engagements for your direct sales team (to kick-off new sales cycles), or by accelerating the growth of your channel partners, our focus remains on delivering tangible results for your business. 

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