It’s important to understand this upfront: Sales leaders expect reps to negotiate their offer. After all, you are in sales. You are expected to be able to negotiate every day for your job, so why would it be any different when you are talking about the terms of your own compensation?
1. Negotiate with a decision maker.
Preferably, this is your direct manager. Avoid the middleman – like recruiters and human resources professionals – at all costs. Always negotiate with the one who has the power to make the decision. This is the same tactic you should use to negotiate any sales deal.
2. Be tactful, professional and respectful.
Know when to push and when to back off. Part of being a great sales rep is being able to gauge, by the conversation and what you know from your research and intuition, when they’re willing to go further or when they think you are overstepping. It’s important to come across as confident in your skills and worthy of the compensation you deserve, but an over-inflated ego (and pushing an over-inflated ask) will damage your reputation before you even begin the job.
3. Start high.
As with any negotiation, always start high. If your ask is too high, you can always go down. But if you start low, you’ve got nowhere to go.
4. Clearly define your ask.
Decide what’s most important to you. Would you rather have a steady paycheck or the ability to over-earn by over-performing? Ideally, it’s the latter, and you’re more likely to negotiate successfully on performance-based compensation. Sales managers love reps who have the confidence and are willing to bet on themselves.
Come to the table with a definitive list of the things you want. Common negotiation points on compensation include base salary, variable pay, bonus and equity (but understand that if you ask for more money, you should be prepared to take on a higher quota).
Other negotiation points include PTO, onsite versus remote work, and travel requirements. You should also know what your expected ramp time to quota will be, whether you will be working on territory or named accounts (territory accounts can be valuable negotiation points), and what your sales support will be. Is support a dedicated or shared resource? High performance can demand priority support. If the company has the human capital, you may want to ask for dedicated support and lead gen.
5. Know the difference between a recoverable and non-recoverable draw.
Recoverable and non-recoverable draw are common negotiation points. Recoverable draw is a set amount of money that is paid within a specified time period (kind of like commission paid in advance). Commissions during the time are used to pay the company back for the draw amount. If commissions exceed the draw amount, you will be paid the difference. With a non-recoverable draw, you don’t have to pay the company back for the draw amount. However, you will likely not receive commissions until the commission amount exceeds the draw.
6. Understand your leverage.
First, do your research. What’s your market value, and what compensation are others with your experience, track record of quota attainment, asking for and getting? Have your data available to use if needed. Sales leaders love facts/data.
Second, what happens if a sales manager says no to your ask? Are you prepared to walk? Do you have a fall-back plan? Know the bottom-line of what you will accept.
You should also understand how much the employer needs you. Do they have a plan B? What is their urgency to fill the position?
7. Get everything in writing.
You don’t have a real offer until you have an offer letter. This is so important, I’ll say it twice: You don’t have a real offer until you have an offer in writing. I’ve heard hundreds of stories from reps who believe they’ve been the victim of a bait and switch hiring scenario. Only when you have an offer in writing have you secured the terms of your employment. Never give your resignation notice to your current employer until you have a countersigned and dated offer letter from your new employer.
Not sure what to make of your offer? Check out our guide on How to Evaluate a Sales Job Offer!
