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How to Negotiate a Sales Salary

RepVue Team
RepVue TeamMay 1, 2024

Negotiating a sales salary can be a daunting task, even for experienced sales pros. But , it is essential to ensure that you’re being fairly compensated for your skills and experience. Whether you are negotiating a starting salary or seeking a raise, we’ve got several key strategies that can help you achieve the best possible outcome.

First and foremost, do your research. Look up the industry standards for salaries, as well as the specific company you are negotiating with. You have to know what others are being paid for the position.Remember that you are negotiating for yourself and your own interests, and that it is perfectly acceptable to ask for what you feel you are worth. By approaching negotiations with confidence and a clear understanding of your own value, you can increase your chances of achieving a favorable outcome.

Understanding the Basics of Sales Salaries

Here are some basics you need to understand before entering into salary negotiations:

Commission Structure 

Sales salaries are typically composed of two parts: a base salary and commission. The base salary is a fixed amount that you receive regardless of your sales performance, while commission is a percentage of the sales you make. The commission structure can vary depending on the industry and company, so it’s important to understand the specifics of the commission plan before negotiating.

Research Industry Standards

Before entering into salary negotiations, research industry standards for sales salaries in your field. This information can help you determine a reasonable salary range for your experience and skill set. Repvue is a great resource for finding salary information for sales orgs in different industries..

Consider Your Experience

Your level of experience and past sales performance can also impact your salary negotiations. If you have a proven track record of exceeding sales goals, you may have more leverage to negotiate a higher commission rate or base salary. On the other hand, if you are new to the industry, you may need to be more flexible with your salary expectations.

Negotiate with Confidence

Be confident in your abilities and the value you bring to the company. Come prepared with specific examples of your past sales successes and how they have contributed to the company’s bottom line. Be clear about what you are looking for in terms of salary and commission.

Define Your Salary Goals

Once you have a good idea of industry standards and your own value, it’s time to define your salary goals. 

Determine the minimum salary you would be willing to accept, as well as your ideal salary. Keep in mind that salary is just one part of the compensation package, so consider other factors such as benefits, bonuses, and equity options. Having a clear idea of your salary goals will help you negotiate with confidence and avoid settling for less than you deserve.

It’s also critical remember the fact that what matters in a sales role is your take home pay, and that’s as much a function of your quota as it is your comp plan. You’ll often be better off in a role with a lower OTE if you’re more likely to hit quota. Keep that in mind when you’re negotiating and when you’re choosing a role.

The Negotiation Process

Here are the three key steps to follow when negotiating your sales salary.

Initiate the Conversation

The first step in negotiating your sales salary is to initiate the conversation. If you’re considering a new opportunity, this can be done during the interview process or after you have received a job offer. If you’re negotiating in a current role, we’d recommend initiating the conversation as part of an annual review or after the close of a successful fiscal year. 

When initiating the conversation, be confident and clear about your goals. Start by expressing your interest in the position and the company, and then transition into discussing your salary expectations. Be prepared to back up your salary expectations with your research and data.

Present Your Case

Once you have initiated the conversation, it’s time to present your case. This involves outlining your qualifications, experience, and achievements that make you a valuable asset to the company. Use specific examples and data to support your claims.

It’s also important to be flexible and open to negotiation. Negotiations are a discussion, not an ultimatum. Your minimum expectations and acceptable alternative forms of compensation, such as bonuses, commission, or stock options, should remain top of mind. Be sure to discuss these options and clearly understand their terms and conditions.

Handle Objections

During the negotiation process, you may encounter objections from the employer. These objections may be related to budget constraints, company policies, or other factors. But you’re in sales and overcoming objections is one of your specialties!

Treat any objections the way you would treat customer objections. Listen carefully and respond in a professional and respectful manner. Be prepared to counter any objections you might expect.

If you’ve done your research and know your worth, you should be able to show how meeting your salary expectations can motivate you to drive greater revenue for the company.

Sales Salary Negotiation Tactics and Strategies

Leverage Other Offers

One of the most effective ways to negotiate a better sales salary is to leverage other job offers. If you have received other job offers, use them as leverage to negotiate a higher salary with your current employer. This tactic can be particularly effective if the other job offers are for similar positions and pay more than your current salary.

To use this tactic, you’ll need to know the average salary range for your position in your industry and location. Once you have this information, you can approach your employer and let them know that you have received other job offers and would like to discuss your salary.

Emphasize Achievements

Another effective tactic for negotiating a sales salary is to emphasize your achievements. Be sure to highlight any accomplishments or successes you have had in your current role. This can include exceeding sales targets, winning new clients, or implementing new strategies that have resulted in increased revenue.

By emphasizing your achievements, you can demonstrate your value to the company and make a strong case for a higher salary. Be sure to come prepared with specific examples of your successes and be ready to discuss how they have contributed to the company’s bottom line.

Be Willing to Compromise

While you will likely hope to get the highest salary possible, it is important to be realistic and understand that there may be limitations to what your employer can offer.

When negotiating your salary, be open to alternative forms of compensation such as bonuses, commission, or stock options. You might consider negotiating other aspects of the job such as vacation time, flexible work arrangements, or professional development opportunities.

There may be other perks that can be negotiated, too. You might be able to negotiate a signing bonus, relocation expenses, or a company car. It’s important to do your research and know what is reasonable to ask for based on your industry and experience level.

One tactic to consider is bundling your requests. For example, you could ask for a higher base salary and an extra week of paid time off instead of just asking for a higher salary. This can show that you are willing to be flexible and can help your potential employer see the value in your requests.

Remember, negotiating your total compensation package is about finding a balance that works for both you and your potential employer. Be confident in your worth and clear in your requests, but also be willing to compromise and find creative solutions.

Balance base and variable pay in negotiations. In many cases your employer may be more likely to give you a raise in the variable component of your compensation because it’s directly related to what you sell. While you may start a negotiation by asking for an increase in your base, oftentimes you can compromise by agreeing to take most or all of the increase in your variable pay.

Consider other Factors

Oftentimes in sales, factors other than your base and variable pay will have a huge impact on how much money you make. Things like your quota, the product that you sell, or your territory can often have more of an impact on your W2 than the specifics of your compensation. Be sure to consider these factors wisely, as in many companies there is more flexibility here than with what reps are paid.

Dealing with Rejection

You may face rejection when negotiating your sales salary. It’s important to remember that rejection is not personal, and it’s not a reflection of your abilities. Instead, it’s an opportunity to learn and grow. Here are some tips to help you handle rejection in the sales negotiation process.

Request Feedback

If a potential employer rejects your salary negotiation, it’s important to understand why. 

Requesting feedback from the employer can help you learn from the experience and improve your negotiation skills in the future. Politely ask the employer to explain their reasoning for the rejection. This feedback can help you understand what you did well and what you can improve on for future negotiations.

Consider Alternative Positions

If the employer is unable to meet your salary expectations, consider alternative positions within the company — or finding a new sales job elsewhere. It’s possible that there are other opportunities that better align with your skills, experience, and salary expectations. 

If possible, you should try to decide in advance what you’ll do if your efforts to negotiate a raise or increased package are unsuccessful. Will you walk away from the role or opportunity? Do you have a fall-back role that you can take? If so, you’ll be in a much stronger negotiating position.

Accepting the Offer

Congratulations, you have successfully negotiated your sales salary and received an offer! Before accepting the offer, there are a few things you should do to ensure that you are making the right decision.

Review the Contract

Make sure to review the contract thoroughly before accepting the offer. Look at the salary, commission structure, benefits, and any other important details. If there is anything you don’t understand, don’t be afraid to ask for clarification. You want to make sure you fully understand the terms of the contract before signing.

Clarify Expectations

Before accepting the offer, it’s important to clarify expectations with your new employer. Make sure you understand what is expected of you in terms of sales targets, performance metrics, and other key performance indicators. You should also discuss how your performance will be evaluated and what support you will receive from the company to help you achieve your goals.

By reviewing the contract and clarifying expectations, you can ensure that you are making an informed decision when accepting a sales salary offer. Remember, negotiating salary is just one part of the process. It’s important to set yourself up for success by fully understanding your role and responsibilities within the company.

Long-Term Salary Growth

Negotiating your sales salary is not just about getting a raise in your current job, but also about setting yourself up for long-term salary growth. By planning for future negotiations and investing in professional development, you can position yourself for continued success and increased earnings.

Plan for Future Negotiations

When negotiating your sales salary, it’s important to think beyond your current position and consider how your negotiation strategy will impact future negotiations. This means taking a long-term view of your career and considering factors such as industry trends, company growth, and your own professional goals.

One effective strategy for planning for future negotiations is to document your achievements and track your progress over time. By keeping a record of your successes and the impact you’ve had on the company, you’ll be better equipped to make a case for a higher salary when it comes time for your next negotiation.

Another important factor to consider is the market value of your skills and experience. By staying up to date on industry trends and salary benchmarks, you’ll be better equipped to negotiate a fair salary that reflects your true value.

Invest in Professional Development

Investing in your own professional development is another key strategy for achieving long-term salary growth. By developing new skills and expanding your knowledge, you’ll be better equipped to take on new challenges and responsibilities, which can lead to increased earnings over time.

And don’t overlook the importance of building your network and staying connected to industry trends and developments. By doing so, you’ll be better equipped to stay up to date on the latest trends and opportunities.

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