Best Practice Report

Principles Of Variable Compensation For Revenue Development Reps

July 3rd, 2023
Seth Marrs, Principal Analyst
Seth Marrs Principal Analyst
Amy Hawthorne, Principal Analyst
Amy Hawthorne Principal Analyst
With contributors:
Christian Jibilian , Michael Belden

Summary

B2B organizations frequently bounce between the extremes of paying revenue development representatives (RDRs) purely for their activity and paying them only for handoffs that result in revenue. Effective RDR variable compensation balances the goals of the business with what motivates reps. Variable compensation should be paid for desired outcomes, not the activities that produce them. To motivate performance, establish clear and direct links between RDRs’ efforts and the outcomes they’re being paid to deliver. In this report, we examine the principles that inform RDR variable compensation and a practical approach to establishing an effective RDR variable compensation plan.

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