I'm hoping to get some examples of how commission is handled for SaaS renewals.
I have over 10 years of sales experience but this is my first time selling for a SaaS company with commission paid against ARR. If I sign a net new client, I'm paid a fixed % of the contract's ARR, with an additional kicker for a multi-year term.
For renewals of existing client contracts, I'm only paid on the difference from prior year's contract value. For example - if I renew a $100k contract for $150k - I'm paid on the $50k difference.
Even if I get a current client to sign a multi-year and agree to better business terms (e.g. quarterly invoicing instead of monthly, Net-30 payment, etc.) but the contract value stays flat, I am paid 0% commission because there is no ARR growth year over year. From a comp standpoint, there's no difference for me between a current client deciding to walk and not renew, and a current client agreeing to a 3-year renewal at current cost.
Is this standard operating procedure? I've only spoken with one friend who handles renewals for one of the world's largest SaaS companies - and they are paid on the TOTAL contract value of renewals, not just the difference.
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