Sales Compensation Blog

One of Makana Solutions' founding principles is to empower sales management to optimize their sales resources through easy access to relevant best practice information on sales compensation. On a regular basis, I, our team of experts, as well as recognized industry authorities, will post what we hope you will find to be relevant, thoughtful advice on sales compensation issues. So let's get started.

SaaS and subscripton-based sales compensation

We recently hosted a webinar with industry experts Jeff Kaplan and Tom Wilson, devoted to the unique challenges of sales compensation in this business model. We recorded the webinar so you can see it in its entirety, but we had so many great questions during the webinar that this is a topic we will be revisiting often and will post relevant information in an area of our site dedicated to SaaS Sales Compensation Best Practices. Below is one of a number of key ideas that came through.

Starts with Strategy and the relateds business roles

We learned in an advance survey of attendees that many of the attending companies had transitioned to the subscription-based model from a traditional enterprise license. Tom Wilson, our guest compensation expert , compared the significant differences in the sales roles for the two models. In the enterprise software model, Tom pointed out that the role is typically one of a "big game hunter" where the sales rep's responsibilities are:

• Find and influence the buyer where the value proposition is based on "projected" return on investment
• Negotiate price and terms
• Close the large "contract" sale
• Design and train to use effectively
• Sell upgrades and expansions

In a SaaS model the responsibilities shift to one of "Master Chef" where the rep's role is to:

• Find and influence the user & buyer where the value proposition is based on "experienced" return on investment
• Negotiate subscription terms
• Close a "commitment" sale
• Tailor and training to expand usage
• Embed the system into the business
  

When the job role shifts this significantly, it is important to take a fresh look at both the skills of the team as well as supporting roles and not just "tweak the plan". Good plan design follows the business strategy. Once you have clarity on the roles and how each role influences the customer, the measures and incentives will be much easier to identify.

There were many questions from the webinar participants that we had no time to answer. Stay tuned to the blog and ask more. I will use this forum to continue the dialogue.