Companies usually discuss gross salaries with their employees rather than net salaries, as the employee’s personal situation may affect the calculation of their taxes in some countries. Therefore, we might have 2 employees with the same gross salary but different net salaries.
Base salary
That said, the salary of the SDR, as in any worker, starts from the same basic criteria:
- No employee may be below the minimum wage.
- Sometimes company’s agreements may be improved.
- Aligned with the industry standard, most importantly! If you pay below average, you probably won’t get the right person or you will most likely have a lot high turnover rate, which will turn out to be much more expensive than paying the average salary for the role you are looking for.
- The average base salary of an SDR is between 18k€ and 35k€ plus commissions of around 30%. This is a wide range, as the base salary depends on the city in which the company is located, the type of client that must be obtained, the experience required for the position, and the languages.
We must also consider other perks which count as part of the salary. If these exist, they must be specified. Some examples may be additional paid vacation days, health Insurance, allowances, transportation, and training.
Commissions
SDRs are salespeople, and as such they earn commissions. There is no one-size-fits-all model. There are several possibilities, and the model may evolve or change depending on the objective set. However, the commission plan must be attractive and ambitious, so that it motivates sales reps to achieve those objectives.
To establish the commission plan you have to be very clear about what your market is like –
- What sectors are you targeting and if you have many buyers.
- What is the size of your buyers and your average ticket value.
- Sales cycle.
These questions are part of how you establish your pricing and also answer how you should commission your SDRs and your Account Executives.
For example:
- A company sells its license for €150,000 per year.
- This means that the company only sells to large companies.
- That its market, being large, is more limited and does not have an infinite number of buyers.
- Its sales cycle is very long.
- The Account Executive who sells these licenses is experienced, meticulous, and patient since throughout the sales process they have to meet with different interlocutors, most likely senior managers. The SDR that works with the AE must also be patient and resilient since it will take longer to close a meeting than when selling to other types of companies.
- When the deals are of this caliber and with a long sales cycle, the basic salary and commissions are higher than in other companies.
In this example, the AE will earn 75k€ as a basic salary and a 10% commission on all their sales. The SDR works for 2 AEs and closes 12-15 meetings a month. The salary of the SDR is also above average and will receive a commission as a reward for closing the meeting. If the sale is closed after 9 -13 months the SDR will also receive a percentage of 1% of the sale’s value.
Another example:
- A company that closes deals of €5,000 on average per year
- Smaller size companies
- It has an almost infinite market
- Short sales cycles (1 month)
- Your AEs don’t have to be as experienced, as decision-making processes will be faster and there are fewer decision-makers in the process. Making it the perfect role for an SDR who has already covered their prospecting cycle.
- In this case, the salary of the AE is 50-50%
In this case, there are 2 SDRs for each EA instead, and the SDRs close about 15-20 meetings per week. Since sales are closed quickly, the SDR generally earns their commission based on qualified closed meetings and does not usually earn a percentage of the final sale.
We hope we have helped you clarify this dilemma, being so specific gives us great depth in the sector. If you are in a position to grow or organize a sales team, let’s talk!
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