How Should Compensation Work for Fractional Sales Leaders?

About the Author: Ali Braverman is a fractional sales leader helping tech and media start-ups define and scale their sales strategies. Ali has led sales teams at Fortune 500 companies including Google, Pinterest, Uber and TikTok, while also building teams from scratch at Just Women’s Sports and Search Discovery. Ali specializes in helping start-ups develop strategies, streamline processes, and build high-performing sales teams. You can find her on LinkedIn or reach her at ali@justfollowingup.com.

‍

If you’ve ever worked in a full-time sales leadership role, you’re familiar with the basics of compensation: a base salary, commission, and possibly bonuses or equity. 

But for fractional sales leaders who join organizations on a part-time basis, structuring compensation can be trickier.

Here’s how to think about fair and effective compensation models when you’re providing — or soliciting — fractional sales leadership services.

‍

Commission-only compensation rarely makes sense

Commission-only roles are a staple of the sales world, but they typically don’t translate well to fractional sales. 

Below are four major reasons why. 

1. Misalignment of responsibilities: In fractional roles, you’re often tasked with simultaneously building the sales infrastructure and executing on sales. Pure commission doesn’t reflect the broader responsibilities of strategy, process-building, and team leadership.
2. Risk imbalance: Early-stage startups rarely have a proven product-market fit, a repeatable sales process, or robust sales collateral in place. Without these elements, you — the fractional leader — bear a disproportionate share of the risk if you’re only paid when deals close.
3. Lack of key metrics: To even consider a fair commission-based structure, you need reliable data, such as Average Contract Value (ACV), average close rate, and average sales cycle length. These metrics are critical for modeling the potential earnings from commission and ensuring the compensation is equitable. If a startup hasn’t tracked these metrics for at least a year, any commission agreement is essentially guesswork.
4. Strategic vs tactical work: While it may sound appealing for startups on a tight budget, commission-only compensation often undervalues the strategic nature of fractional sales work. 

The bottom line: Senior fractional leaders often do more than just “close deals.” They’re building systems and processes, strategizing go-to-market, and laying the groundwork for sustainable, scalable revenue. 

‍

So, when does a commission-only structure make sense? 

Generally speaking, commission-only compensation only makes sense if the role is strictly front-line selling, and you’re coming in purely to prospect and close deals within a well-oiled sales machine. 

This scenario is rare for senior fractional leaders because their clients are typically early-stage companies, who are hiring a fractional sales leader in large part for their strategic acumen. They typically need help building the machine, rather than just running it.

‍

When a base + commission structure makes sense 

A hybrid approach that includes both a base fee and commission can be ideal. It accounts for the strategic work while also rewarding revenue generation.

1. The base fee covers your strategic contributions — building systems, designing sales playbooks, and guiding overall go-to-market efforts.
2. Commission provides upside for hitting or exceeding revenue goals. 

With this structure, both parties benefit: you’re incentivized to drive sales, and the startup only pays additional compensation when cash actually comes in.

The base pay also mitigates risk for you in situations where the company’s product or sales funnel is still evolving. At the same time, the company avoids sinking a large fixed cost into a full-time role.

‍

When a base-only commission makes sense 

Base-only compensation works when the focus is on strategic leadership rather than front-line revenue generation. 

There are four common scenarios when base-only compensation makes sense. 

1. Sales Infrastructure Building: If the primary objective is designing comp plans, setting up CRMs, or creating sales playbooks, a commission component is irrelevant. You’re focused on building the engine, not running it on the racetrack just yet
2. Team Development: If the goal is to coach and mentor the existing sales team, you’re also not necessarily the front-line closer. Your value lies in elevating the team’s long-term performance, which fits best with a flat fee.
3. Working with an Early-Stage Startup: Typically, pre-revenue or pre-market-fit companies need strategic leadership vs a closer. During this phase, a fractional sales leader can focus on shaping the go-to-market strategy, identifying key customer segments, and laying the groundwork for scalable growth.

If both parties just want to “test the waters”: Base-only compensation is an excellent option for a trial run, especially if it’s a shorter contract that doesn’t align with the average sales cycle. For example, if the average sales cycle is six months, but both you and the company want to try a three-month trial engagement, commission-only compensation wouldn’t fairly reflect your contributions, whereas base-only would make sure you’re compensated for the upfront work.

‍

The sweet spot: Balance, fairness and alignment 

Because fractional leaders aren’t full-time employees, their compensation structure may require more nuance. 

But whether it’s a project-based fee, an hourly retainer, or milestone-based payments, the structure should always maintain these same core principles:

1. Fairly compensating strategic work
2. Rewarding results
3. Aligning risk and incentive 

You know that as a fractional sales leader, your contributions often go beyond closing deals. You’re there to create sustainable, profitable revenue operations by combining strategic direction with tactical execution.

Whatever compensation structure you choose, it should reflect the strategic value you bring, the risk you assume, and the outcomes you drive.

‍

A Framework for Starting Compensation Discussions

When structuring compensation for fractional sales leaders, a helpful starting point is a 70/30 split between base pay and variable compensation. This means 70% of the total compensation is guaranteed as a base fee, while 30% is tied to performance-based incentives. 

From there, you can adjust the commission percentage up or down depending on factors such as the maturity of the sales process, the clarity of revenue goals, and the level of strategic versus tactical work. 

For example, if the role is more focused on building infrastructure and coaching, a higher base percentage may make sense. Conversely, if there’s already a well-defined sales engine and the focus is driving revenue, a higher commission percentage could be appropriate.

The bottom line: By shaping fair, transparent and mutually beneficial arrangements, you can empower both yourself and your clients to thrive. 

And by setting — and sticking to — appropriate expectations, you not only safeguard your own value but also elevate the fractional sales leadership profession as a whole. 

‍

‍

If fractional work sounds exciting to you, or you want to learn more, check us out at https://fractionaljobs.io. We've got plenty of live jobs from startups looking for senior-level fractional talent.