Churn accounted for

Question

Hi Fellow SaaS Account Managers,

How is your commission structure set up and does it account for Churn?

I'm working for a new company and my target & commission are based on hitting 110% ARR quarterly. I'm solely responsible for renewals, upsells & expansion, and not for acquiring NN logos. My thought here is that whenever I have one or multiple customers churn, due to whatever reason, it's almost impossible to hit my ARR number. Does anyone have experience with this? Or do you have a split commission/target based on retention & ARR.

Accepted Answer

My assumption is that 110% ARR has churn built in. Most solid companies are in the 10-20% per year churn, meaning with your remaining 80% of your book, you'll need to upsell approx 35% to get to 100% ARR. (If it's 10% churn more like 22%).
This is pretty par for the course in the AM land.

Answer

I would think most would have churn included, or else would abuse it. My number isn’t based on ARR/Retention, but I’m an AE. Yes, I eat clawbacks if they occur before the transfer to the AM team.

Answer

churn only matters if im paid on money they havent received yet otherwise accounted for

Account Manager 101

Churn accounted for

6 comments

Account Manager 101

Churn accounted for

6 comments

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