Welcome to Dear Wiz, an advice column by sales operations folks for sales operations folks. Each month, we select a “Wiz” to answer your burning questions about the best ways to work, learn, and grow in this quickly expanding field. Have a question? Send us an email below.
For our inaugural column, we’re talking about bonuses. Trailblazers across the interwebs asked us, “Bonuses for sales ops teams are a hotly contested topic. How do we get them? And what do they look like?”
Great question. We’ll let sales ops Wiz and fellow Trailblazer Justin Petrillo take it on. Petrillo is a senior director of business operations at Bluecore, an e-commerce marketing platform, and he has more than six years of experience as a sales operations leader.
Do sales operations professionals deserve bonuses?
Is this a trick question? Yes, of course, they do. In 2020, sales operations went from nice-to-have to must-have — with 89% of sales professionals considering the role critical to growing the business. This team (or sometimes a single person!) is responsible for informing your sales strategy, forecasting, managing your sales tech, and training — all of which work together to drive productivity and scale processes that ultimately contribute to a business’s top and bottom line.
As sales operations professionals receive more notice, the same subject keeps popping up: bonuses. Should we get compensated (à la bonuses) the same way core sales teams get compensated?
To answer, we must first dig into how sales teams get paid. Reps typically get a cut of whatever revenue they generate. Want to earn more money? Then bring in more money. This is often referred to as variable compensation, where you get a bonus based on if you hit or exceed your quota. It’s simple, direct, and easy to measure.
A sales ops bonus should be tied to revenue targets. Because if a sales ops leader is successful, then the sales team should be hitting or surpassing their targets.
Pivot to sales operations, however, which has only been around for a few decades, and things get complicated. Most people still don’t understand what we do, and have no idea what variable compensation for sales ops should look like. They may not associate sales ops with this pay structure, because they see sales ops as a cost center, not a revenue driver. They’re wrong.
High-growth startups, for example, know they need to offer a competitive base salary, along with a bonus of at least 15% to 30% based on sales performance. High-growth businesses typically burn through money at warp speed, and that bonus incentivizes sales ops to focus on projects that drive revenue. It acts as a type of equity and gives them skin in the game to ensure your company’s success.
Variable compensation also acts as a tool to retain top talent. Sales ops is a competitive job market. In order to keep good leaders, you need to be able to scale their compensation. Bonuses are the best way to do that.
How do you structure bonuses for sales ops?
So yes, bonuses are important. But how do we calculate them? What should they be based on? There are two competing philosophies on this: revenue-based versus project-based.
The first school of thought is simple: a sales ops bonus should be tied to revenue targets. Because if a sales ops leader is successful, then the sales team should be hitting or surpassing their targets, right?
The second school of thought is that sales ops folks are strategic, long-game thinkers, meaning some necessary initiatives they implement may not impact revenue right away. It could pay off next quarter or even next year. Since sales ops isn’t always focused on the right now, that means their compensation should be tied to project completion and not revenue.
By developing a clear bonus structure, you’ll not only keep your sales ops leaders incentivized, you’ll ensure they’re in lockstep with your sales leaders.
I’m a big believer of the former. By tying sales ops bonuses to revenue, you align them more closely with the sales department. They’ll have the same goals and incentives, which translates into cohesive and complementary priorities. The worst thing that could ever happen is a sales rep says they need some form of support to help them hit a number, and then the sales ops leader says no because it isn’t aligned with their compensation.
Tying bonuses to revenue also makes for a more supportive cross-functional team. Instead of feeling envious about sales reps raking it in, the sales ops team can celebrate with them. Because when sales makes money, so do we.
How do I advocate for bonuses?
When you’re considering job offers as a sales ops leader, ask if the company typically scales compensation for the position and if so, what they tie that variable to. You should have a crystal clear understanding of how it’s measured and where those metrics are pulled from. A tactic I’ve seen deployed with much success is pitching your own compensation plan. You get direct input into a variable compensation plan that’s aligned with the company’s revenue targets, and can feel confident about hitting your goals.
From the other side of the table, if I’m a hiring manager, and I give a sales ops candidate that option and they don’t take the variable, then I honestly don’t know why I’m offering them the job. If you really believe you’re good and you’re going to work hard to achieve those benchmarks, why wouldn’t you want the variable? You should expect that you’re going to earn it.
And if you’re a sales ops leader who wants this added to your compensation plan, that’s something you’ll usually be able to address during your review. You’re pushing for a raise, but you hit a wall when it comes to getting that salary increase. By asking if you can tie part of your compensation to a performance variable, you align your growth with that of the business. To a chief financial officer (CFO), that’s a way more palatable argument than just asking for an increase in your base.
The sales ops function is only going to take on a bigger, broader role beyond 2020. By developing a clear bonus structure, you’ll not only keep your sales ops leaders incentivized, you’ll ensure they’re in lockstep with your sales leaders.
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