Designing sales compensation at a SaaS company is always tough. When you’re layering in product-led growth (PLG), it gets even trickier. But getting this right has HUGE payoff for growth. Today, we’re breaking it down with specific tips and advice from sales comp experts.
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Building Blocks of Sales Comp
Before diving into PLG specifics, let’s make sure we’re speaking the same language:
- OTE (On-Target Earnings): Base salary + potential commissions if quotas are met.
- Quota: Individual targets, usually revenue-based.
- Accelerator: Extra bonus potential for smashing quotas. (Good idea for PLG!)
- Clawback: Taking back commissions for churned customers. (Aim to enforce this.)
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Your PLG Comp Design Playbook
- Goals First: Are you focused on new customer growth, expansion, better conversion rates…? Goals drive everything else.
- Know Your Team: “Hunter vs. farmer” is too simple. For PLG, roles like Product-Assist and Account Managers focused on expansion are key. (We included some OTE examples)
- Incentivize What Matters: Don’t just pay for closed deals! Early-stage, reward the right activities, later focus on outcomes.
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Key PLG Compensation Questions
Let’s tackle the common sticking points:
- Self-serve sales count? YES, if the account meets your ‘qualified’ criteria. Not doing so risks sabotaging your PLG efforts.
- Pay AEs on expansion? For a period after the initial deal, YES. This encourages the right type of ‘land and expand’ deals.
- “Too many small deals” problem? This is solved through ACCOUNT ASSIGNMENTS, not by punishing reps. Focus them on the accounts with the potential to spend big.
- Commision caps? Generally a bad idea. “Windfall clauses” protect you better from giant outlier deals.
Additional Expert Tips
[Include a few of Alexandra’s and Ben’s points from the original article.]
The Bottom Line
Sales comp in the PLG world requires a more nuanced approach. Done well, it’s a powerful lever to align your people and smash your growth goals.
Need more help? Let’s talk about tailoring comp plans to YOUR specific business model and goals. Read our blog post on how to ask for update in email
