3 out of 5 SaaS companies now have some form of usage-based pricing, according to OpenView Partners. The benefits of usage-based pricing are clear: lower barriers to entry for new users and pricing that is fairer to customers. As with any innovation or large scale change, however, this comes with challenges. Adopting new pricing models requires shifts in thinking across an organization, including changes to sales compensation structures.
In fact, many of the companies we speak with who are actively working on implementing usage-based pricing cite sales compensation structure as one of the biggest challenges in their rollout. SaaS salespeople have spent their entire careers with incentivization structures based on contracts being signed, rather than tied to product usage. Figuring out how to change comp structures - and how to get sales teams excited about these changes - are still open questions in the industry.
To help companies as they answer these questions, Palette has created a guide to Sales Compensation in the Usage-Based Pricing Era. This guide will help go-to-market teams think through some of the changes they need to make across their organizations as well as within their sales compensation structures to support usage-based pricing. If you're working on this transition, we'd love to hear from you!