SaaS Sales Basics
Roles, funnel, quota, and how SaaS sales orgs are structured.
What is SaaS sales?
SaaS (Software-as-a-Service) sales is the practice of selling software delivered over the internet as a subscription rather than a one-time license. Instead of shipping a product, vendors charge monthly or annual fees and are compensated on recurring revenue. That single fact reshapes the entire sales motion: reps are rewarded for winning the right customer (one who will stay and expand), not just signing the biggest logo they can find.
The core loop is: find a company with a problem your product solves, convince the right people it's worth solving now, and land a contract that renews and expands. Everything else — cold calls, discovery, demos, proposals — is scaffolding around that loop.
The SaaS sales funnel
A typical B2B SaaS pipeline has predictable stages. Each stage has an owner and a conversion rate. Learn the math and you'll never guess whether you're on track.
| Stage | Owner | Typical conversion |
|---|---|---|
| Lead / Prospect | Marketing + SDR | — |
| MQL (Marketing Qualified Lead) | Marketing | 10–20% of leads |
| SQL (Sales Qualified Lead) | SDR | 25–40% of MQLs |
| Discovery / Opportunity | AE | 60–80% of SQLs held |
| Demo / Evaluation | AE + SE | 50–70% |
| Proposal / Negotiation | AE | 60–80% |
| Closed Won | AE | 20–30% overall |
SDR vs BDR vs AE vs AM — who does what
- SDR (Sales Development Rep): handles inbound leads — MQLs from marketing, demo requests, chat conversations. Their job is to qualify and book meetings for AEs.
- BDR (Business Development Rep): essentially the same role butoutbound. They cold call, cold email, and prospect into accounts that have never raised a hand. Many companies use SDR and BDR interchangeably.
- AE (Account Executive): owns the deal from discovery to close. Runs demos, builds business cases, negotiates contracts. Carries a revenue quota.
- AM (Account Manager) / CSM (Customer Success): takes over once the deal is signed. Responsible for renewals and expansion. In enterprise, AMs carry an expansion quota; CSMs are usually retention-focused.
Career path and compensation
The classic SaaS ladder is SDR → AE → Senior AE / Enterprise AE → Manager / Director → VP Sales / CRO. Some reps sidestep into Sales Engineering, RevOps, or Enablement. Time-to-promotion varies but 12–24 months as an SDR is normal before promotion to AE.
Compensation is quoted as OTE (On-Target Earnings) — base salary plus variable if you hit 100% of quota. Rough US ranges in 2026:
| Role | Base | OTE | Split |
|---|---|---|---|
| SDR / BDR | $55–75k | $70–100k | ~70/30 |
| Mid-market AE | $80–120k | $160–240k | 50/50 |
| Enterprise AE | $120–170k | $260–400k+ | 50/50 |
| Sales Manager | $140–180k | $260–350k | ~60/40 |
Quota, OTE, and accelerators
Quota is the revenue target you're accountable for. For SDRs it's usually a meeting or opportunity number (e.g., 12 SQLs / month). For AEs it's ARR sold — commonly 4–6× your OTE. So a $200k OTE AE typically carries a $1.0–1.2M annual quota.
Accelerators pay you a higher commission rate once you exceed 100% of quota. A rep at 150% attainment often takes home 2× their variable — this is why great AEs earn far more than base-plus-target implies.
How sales orgs are structured
Most SaaS companies split teams by motion and bysegment:
- Inbound team: SDRs qualify hand-raisers. Volume-heavy, faster feedback loop, generally easier as a first role.
- Outbound team: BDRs cold-prospect into named accounts. Harder, slower, but the skills transfer to becoming an enterprise AE.
- Segments: SMB (up to ~200 employees), Mid-Market (200–2,000), Enterprise (2,000+). Deal size, sales cycle length, and complexity rise with segment.
What this means for you
If you're breaking in, the shortest path is inbound SDR at a mid-market SaaS company that's growing 30%+ year-over-year. You'll get enough volume to develop skills fast, mentorship from AEs, and a real chance at promotion within 18 months. Continue with Breaking Into Sales for the tactical playbook.