How salespeople are paid — Sales fundamentals & the commercial org

You need this cold — both to negotiate your own package and to show fluency in interviews; for anyone entering their first commissioned role, this section is also where naivety costs the most actual money.

Base vs variable, and OTE. A sales package has a base salary (fixed, paid regardless) and variable (commission and/or bonus, paid on results). OTE — on-target earnings — is base plus the variable earned at exactly 100% of target: "£60k base, £120k OTE" means £60k guaranteed plus £60k variable at target.

The split signals the role:

closing roles (AE) sit near 50/50;
account management and presales are more protected — often richer on base than the AE's 50/50; 60/40 to 80/20 is common;
SDRs in between.

Crucially, OTE is not a cap — above target, accelerators mean reps earn beyond it. Evaluating an advertised range — one NHS-facing startup publishes a "£45–90k" spread for a single AE role, which is exactly a base-to-OTE shape — your first questions are: what's the split, and what does the variable plan look like?

Quota. A quota is a salesperson's formal target for a period — usually annual, broken into quarters, expressed in bookings or revenue ("£800k of new business this year"). The board sets a company revenue plan; RevOps and the VP divide it across the team with deliberate over-assignment (total quota exceeds the plan, because not everyone will hit); each rep's number is tuned to their territory's realistic potential — ideally. Quotas reset yearly and almost always go up.

Quota attainment — the honest numbers. Attainment is the percentage of quota delivered. The truth interviewers rarely volunteer: across B2B software the share of reps who hit or exceed quota is roughly half in a good year — and several recent-year surveys put it well below that — and a team where 90% hit usually means soft quotas, not universal brilliance.

Two implications:

When an advertised OTE looks dazzling, ask "what percentage of the team hit quota last year?" — a respected question that tells you whether the OTE is real.
Missing quota in a bad year is common and survivable; sustained bottom-decile attainment is what ends jobs (see PIP, section 6).

Field note
Reps talk about advertised OTE as a marketing number, and the gap is structural: OTE assumes 100% attainment in a market where roughly half the team misses. When salespeople compare offers among themselves, the questions are what the median rep actually earned last year, how many of the team are above 80% of quota, and whether the top earner's number came from the plan or from one freak deal. A company confident in its numbers will answer; evasion is itself data.

Commission mechanics. Commission is variable pay as a percentage of what you sell; the base commission rate is roughly variable-at-target ÷ quota (£60k variable on a £600k quota ≈ 10%). Around that core, plans add machinery:

Accelerators: higher rates above 100% of quota — e.g. 10% to quota, 15% from 100–130%, 20% beyond. A star rep's marginal deals are nearly pure profit, and accelerators are why top reps can earn double OTE. Ask whether the plan has them and whether commission is uncapped.
Decelerators: the reverse — reduced rates below an attainment floor (e.g. 5% while under 50% of quota).
Caps: some plans cap total commission — widely considered a red flag in closing roles; a cap tells the star rep to stop selling in October.
Draw: a guaranteed advance on commission while you're new. A recoverable draw is repaid from future commissions; non-recoverable is a genuine floor. Joining a new sector, negotiate a non-recoverable draw covering your ramp period — for a career-changer, one of the most important terms in the offer.
Clawback: commission taken back if the customer cancels or fails to pay within a window (say 90 days). Standard; check the window.
SPIFF (Sales Performance Incentive Fund): a short-term bonus on a specific behaviour — "£1,000 for every POC of the new module started this quarter".

Commission is typically paid monthly or quarterly, in arrears, on signed deals — which brings us to what "sold" actually means.

Voice from the field
As Mark Roberge, HubSpot's first sales leader, argues in The Sales Acceleration Formula (2015), the compensation plan is one of the most powerful tools a company has to steer its sales team — change what the plan pays for and you change what reps do. Read any plan you are offered as a statement of what the company actually wants from the role.

4. Bookings, revenue, ARR — what "sold" actually means

Three words that sound interchangeable and aren't; commercial fluency means never mixing them up.

Bookings: the total value of contracts signed in a period. Sign a 3-year, £100k/year LIMS deal today and you booked £300k today. Bookings are what quota and commission usually key off — usually on the annual value of what you sign; multi-year deals rarely pay full commission on the whole TCV (total contract value), so always ask which your plan uses.
Revenue: what accountants recognise as earned, spread over the period the service is delivered. The same deal produces £100k of revenue per year for three years. Sales celebrates bookings; the CFO reports revenue.
ARR — Annual Recurring Revenue: the annualised value of all active subscription contracts — the standard health metric of a SaaS business ("we're at £5m ARR, growing 60%"). Its monthly sibling is MRR. Recurring revenue compounds, and expansion and renewals (the AM/CSM machinery from section 2) protect it. When a startup ad says "help us get from £2m to £10m ARR", you now know exactly what they're asking for.

Two more numbers that govern a rep's life: pipeline — the total value of open opportunities you're working ("I'm carrying £1.2m of pipeline") — and win rate, the percentage of qualified opportunities you close (25–33% is a common enterprise range). They combine into pipeline coverage: the industry rule of thumb is pipeline worth 3–4× your remaining target, which lines up with win rates of 25–33% (strict arithmetic: coverage = 1 ÷ win rate, so a 25% win rate needs 4×) — and is why prospecting never stops even for closers.

You already hold a version of this. If you've ever tracked a book of potential work — grant applications in a lab, a consultancy's live proposals, a freelancer's leads list — you already hold an informal version of this metric; sales formalises it, prices it, and manages to it weekly.