SaaS Commission Structure for Renewals

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.

☁️ Software Tech
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📳 SaaS
10
FoodForSales
Politicker
3
AE
Some places give you a commish on renewals, some don't. When they don't, its hard to justify putting any effort into them since you don't get anything. Its very short sighted.

They ought to give you something if you put the effort into getting the client to re-up, even if its only a token amount.
Sunbunny31
Politicker
2
Sr Sales Executive 🐰
Pretty standard, tbh. You get paid on the NNR, so the incentive is to provide some kind of uplift. Many companies consider securing the renewal revenue as part of why they pay you a base and don’t provide additional incentive by way of commission.
unclespacejam
Politicker
1
ur dad’s brother
I’ve felt the exact same way when it comes to renewals. Not exactly motivating when you know you’re going through hoops to renew but you’re not getting a cent for your effort to get better terms or decrease a discount.

Insult to injury when management says “WeLL tHatS wUt uR BaSe sALary iS foR”
FinanceEngineer
Politicker
1
Sr Director, sales and partnerships
Yes, this is rather standard with ARR models and multi year deals with renewals. There should also be a customer success or AM person who has responsibility for the general renewals.
Maximas
Tycoon
0
Senior Sales Executive
Yes ,I do believe it's just astandard operating procedure!
oldcloser
Arsonist
0
💀
Par for the course.
bignautty
Executive
0
Enterprise Sales Director
Thank you, everyone! Super helpful answers.
CuriousFox
WR Officer
0
🦊
Seems normal to me bb.
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