SaaStr

JANUARY 24, 2019

As you scale your salesteam, unless you are very careful whom you hire and how you train them, incentives being what they are in variable compensation, some negative behavior will creep in. Many call it “Churn and Burn” or other variants. Clawback sales commission for customers that churn quickly. It’s bad for everyone.

Scale 223

Scale Churn Sales Hiring Sales 223

SaaStr

MAY 6, 2023

On commissions / pay-out: For start-ups where cash matters, I strongly suggest compensating the reps mainly on cash brought in. If it’s too high, it’s not worth it in many cases, unless your churn is high. But if your churn it high, incent these deals even without all the cash up front. Approaches vary here.

Compensation 208

Compensation Churn Revenue SaaS 208

Practical Advice on SaaS marketing

AUGUST 1, 2018

Churn is bad for software-as-a-service (SaaS) companies. But knowing there’s a churn problem is one thing; fixing it is something else. To bring down churn, we need to understand what’s behind the numbers. Wrong customers Sometimes high churn happens when SaaS providers sell to the wrong customers.

Churn 122

Churn Metrics Compensation Software Review 122

Tom Tunguz

MAY 12, 2015

In 2015, the company prioritize on-boarding to mitigate short-term customer churn by investing more time at the beginning of a relationship. In the early years, Hubspot prioritized growth and consequently compensated their sales teams exclusively on new bookings. There is no optimum compensation structure for a CS team.

Compensation 100

Compensation Customer Success Sales Recruiting Churn 100

CustomerSuccessBox

JANUARY 10, 2022

To help you, you watch over your churn, the proportion of customers lost by your business over a given period. In recent years, CS professional compensation structures have tended to rely on revenue-generating activities, which will continue in 2022. Compensation system. There has been addition of stock or stock options.

Compensation 52

Compensation Customer Success Trends Management 52

Tom Tunguz

NOVEMBER 27, 2016

Many times startup teams ask how to compensate a sales team for renewals and upsells. In addition to mitigating churn, startups spend 2-10x less on acquiring a marginal ARR dollar when expanding and upselling accounts. How should SaaS startups compensate their sales teams for upsells and expansions?

Compensation 100

Compensation Scale Sales SaaS 100

SaaStr

SEPTEMBER 12, 2023

Tie compensation to these metrics to incentivize performance. A classic on founder compensation, always one of the most searched topics. The company will need a Sales Ops/Enablement professional for every 30-50 salespeople to manage training, onboarding, territories, and compensation plans. NPS is A Great Core Metric.

Sales Hiring 219

Sales Hiring Technical Advisors Compensation Outsourced Development 219

SaaStr

APRIL 13, 2023

In times of anemic NPS and high customer churn, DevRev strives to create the world’s most customer-centric companies led by happy developers. Everstage is a leading Sales Compensation Management platform that automates commission processes, and enables sales teams with on-demand access to performance insights.

Scale 191

Scale Compensation B2B Innovation 191

SaaStr

FEBRUARY 14, 2023

Churn, upsells, renewals, and all that, and compensating against it. And about measuring and identifying Almost Churn. Second, they’ll never churn as long as they are reasonably happy and you go visit. If you don’t let them down, and they get to know you personally — they will never churn.

Customer Success 277

Customer Success Compensation Churn Enterprise 277

SaaStr

JUNE 22, 2021

Q: What is the better SaaS sales compensation plan: paying reps the 12 months up front for the contract value or paying them pro-rated 12 monthly payments? So my vote is: Assuming your churn is fairly low. Just pay them the commission on all 12 months upfront; and … Add a clawback for customers that churn in less than 12 months.

SaaS Payments 169

SaaS Payments Compensation Payment Services Sales 169

CustomerSuccessBox

JUNE 8, 2022

The capacity to forecast that a specific customer is at a high risk of churning while there is still time to do something about it is a major new possible revenue generator for any company. We, at CustomerSuccessBox , spoke to some of the Top Customer Success Influencers to know how they manage churn! Q: Please introduce yourself.

Churn 52

Churn Management Customer Success Subscription 52

Kellblog

MARCH 29, 2023

This includes an explanation of why I excluded (what I view as old school) churn, lifetime value (LTV) and LTV/CAC analysis from those metrics. That explanation is also available in considerably longer form in my SaaStr talk: Churn is Dead, Long Live NDR. The presentation is chock full of links to interesting articles (e.g.,

Metrics 122

Metrics Compensation Benchmarks Interviewing 122

SaaStr

AUGUST 7, 2020

The best sales teams scale together, with low churn and ideally close to zero churn in management and top performers. This doesn’t mean huge compensation for low quotas. They have low attrition. Turning over a sales team is very hard on the organization. It’s a lot of work to train and build a team. At least, not that well.

Sales Hiring 309

Sales Hiring Scale Sales Recruiting Compensation 309

SaaStr

SEPTEMBER 9, 2022

Folks that increased quotas to compensate for sales comp inflation and lower margins ended up in many cases with low attainment. Sales reps in low NRR and high churn environments got paid almost the same as enterprise reps. Not a bad thing per se, but it also put a lot of pressure on business models. Then ultimately, no one is happy.

Scale 302

Scale Venture Capital Sales Hiring Sales 302

ChurnZero

OCTOBER 19, 2018

Churn Monster #5: Manic Customer. With Halloween approaching there’s all sorts of spooky things around us, which makes it a perfect time for us to talk – churn monsters! These churn monsters take big bites out of your customer base, which can be very scary. This month’s churn monster installment is about a manic customer.

Churn 49

Churn Compensation Customer Success Retention 49

SaaStr

MARCH 8, 2021

If the deal churns / lasts < 12 months, you can claw back a proportionate amount of the bonus. But unless churn is high, you’ll see it doesn’t matter that much in the long run. A bit more here: The ultimate guide to SaaS Sales Compensation Plan | SaaStr. That’s pretty do-able for inside sales.

Scale 162

Scale Sales Compensation Churn 162

SaaStr

NOVEMBER 24, 2021

It’s 2021, but surprisingly, a significant number of SaaS companies still use outdated sales compensation plans. Salespeople are often compensated at the highest rate when they win brand new business, but that might not be good for revenue expansion and might contribute to churn.

Sales Hiring 181

Sales Hiring Scale Compensation Sales 181

ChurnZero

MARCH 15, 2019

Churn Monster #10: Bad Fit Customer . This month we are going to take a look at a churn monster that we’ve all experienced but is different than all the rest, for one very specific reason, that we will get into. Let’s take a look at a scenario involving a bad fit customer and how we should handle this one of a kind churn monster.

Underperforming Technical Team 45

Underperforming Technical Team Churn Software Review Compensation 45

ChurnZero

NOVEMBER 29, 2022

There were also a number of customers who turned us into shelfware or essentially churned. As humans, we naturally focus on what we are measured on, and more importantly, what we are compensated for. A variable compensation plan is an effective way to motivate your team to achieve their individual goals.

Customer Success 98

Customer Success Sales Recruiting Technical Review Compensation 98

User Pilot

MARCH 25, 2024

To improve your company valuation, reduce churn by optimizing the customer journey , use feedback to improve customer experience, optimize your pricing strategy, focus on account expansion , and leverage product virality for customer acquisition. SDE is the profit of the business owner and his compensation. SaaS valuation formula: SDE.

SaaS 105

SaaS Customer Lifetime Value Acquisition Metrics 105

SaaStr

JULY 23, 2020

But unless churn is high, you’ll see it doesn’t matter that much in the long run. A bit more here: The ultimate guide to SaaS Sales Compensation Plan | SaaStr. Ultimately, it should all solve out to say 20% of the bookings goes out to sales comp, one way or another. If cash is an issue, you can pay monthly instead.

Scale 170

Scale Compensation Subscription Payment Features 170

Incredo

OCTOBER 17, 2019

What are 5 common SaaS sales compensation models? The reason is that commission-only position doesn’t guarantee a fixed financial compensation at the end of each month. Pros: With this way of compensating, you reward high-performing sales reps when they show they can do more for you! See below! New and expensive customers.

SaaS Payments 150

SaaS Payments Compensation Payment Services Sales Recruiting 150

Incredo

OCTOBER 17, 2019

What are 5 common SaaS sales compensation models? The reason is that commission-only position doesn’t guarantee a fixed financial compensation at the end of each month. Pros: With this way of compensating, you reward high-performing sales reps when they show they can do more for you! See below! New and expensive customers.

SaaS Payments 144

SaaS Payments Compensation Payment Services Sales Recruiting 144

ChurnZero

FEBRUARY 17, 2021

Customer Success Compensation Strategies. TSIA Resource: Pointing Due North – Customer Success Compensation Trends. Reduce Churn. TSIA Resource: Churn Is a Downstream Issue – Don’t Fix Churn, Create an Anti-Churn Environment. ChurnZero Resource: Segmentation to Prioritize Customer Engagements.

Customer Success 78

Customer Success Technical Review Scale Sales Hiring 78

SaaStr

MARCH 7, 2023

Companies are giving price breaks this year to reduce churn and increase retention, with the caveat that it might go up next year. AE and SDR compensation is another tactic to align GTM with what you want. Some other strategies for creating a more efficient go-to-market are: Adjusting pricing and contract terms with customers.

Outsourcing Services 164

Outsourcing Services Scaling Venture Capital Forecasting 164

ChurnZero

OCTOBER 30, 2020

Top SaaS CEOs Talk Compensation, Automation, and Investors. Customer Success Compensation Catches Up to Sales. In the next three to five years, compensation between Customer Success and Sales will become close to equal.”. What’s Next For Customer Success? Nick Mehta CEO, Gainsight. . . .

Customer Success 93

Customer Success Technical Review Systems Review Compensation 93

User Pilot

MAY 20, 2024

Types of customer advocacy programs Companies use a few kinds of customer loyalty programs to boost visibility and drive growth : Customer referral programs reward users with discounts, upgrades, extra credits, or even monetary compensation for referring prospective customers to the product.

Scale 76

Scale Strategy Social Media SaaS 76

ChurnZero

DECEMBER 2, 2021

From sessions on building variable compensation plans and Customer Success tech stacks to fostering customer advocacy and community, BIG RYG explored how today’s Customer Success leaders are tackling major industry challenges and advancing their Customer Success game. Variable compensation plans need to be achievable.

Customer Success 98

Customer Success Technical Review Scale Compensation 98

Totango

DECEMBER 3, 2020

This continues a trend of high reliance on CS teams in the past few years, and with it has come an evolution in the compensation structures for these team members. They are becoming standard because companies are increasingly recognizing how CS technologies can reduce churn and generate revenue by improving the customer experience.

Customer Success 64

Customer Success Compensation Scale Onboarding 64

ChurnZero

JULY 8, 2022

To calculate NRR, deduct your revenue churn (contract expirations, terminations and downgrades), add any expansion revenue and divide it by your renewable revenue. With that said, if you track NRR in isolation, you can hide churn behind expansion. As a CEO or investor, you never want to be surprised, especially by churn.

Technical Review 98

Technical Review Software Review Retention Metrics 98

Tom Tunguz

APRIL 8, 2015

Because of the nature of SMBs, the startup must battle the higher churn rates of smaller customers which slow growth, creating the S curve above. At some point, the startup pursues the enterprise market to continue to achieve high growth rates with decreased customer churn. Smaller customers churn at higher rates.

Innovation 177

Innovation Startup Scale SMB 177

ChurnZero

JULY 2, 2020

Q: How do you tie employee compensation plans to the customer to promote customer-first behaviors or expectations? A: [Abby]: Compensation is a great way to make people care about a goal or task and stay focused on achieving it. Even if it is part of their compensation.

Compensation 98

Compensation Customer Success Engagement Churn 98

Tom Tunguz

SEPTEMBER 10, 2013

I’ve written about When to Hire Your First Sales Person and what a hypothetical compensation plan for sales people might look like. There I assumed the typical ACV/compensation ratio was about 4:1 but in practice that number is closer to 10:1. Median Monthly Revenue Churn is 0.75%.

Benchmarks 111

Benchmarks Startup Sales Hiring Compensation 111

Chaotic Flow

MAY 13, 2014

The last two posts discussed the potential uses of SaaS customer success metrics for reducing churn and accelerating customer acquisition. In addition to the basic financial metrics, more advance metrics such as the customer lifetime value, churn cohorts and the various SaaS magic numbers may also be calculated.

Metrics 135

Metrics SaaS Compensation Benchmarks 135

Baremetrics

SEPTEMBER 8, 2021

Start monitoring your subscription revenue accurately Get deep insights into MRR, churn, LTV and more to grow your business. Understanding Equity in SaaS The standard definition of equity is the compensation that represents ownership. Try Baremetrics Free. This income would be accounted for as income. Try Baremetrics free.

Payment Methods 81

Payment Methods SaaS Payments Compensation Payment Services 81

ChurnZero

JUNE 10, 2020

The Ultimate Guide to CSM Compensation Plans – Explore the available compensation plans, the right framework for thinking about CS compensation and best practices. . Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

Customer Success 69

Customer Success Compensation Scale Customer Lifetime Value 69

ChurnZero

JUNE 11, 2021

As you accumulate more customer data, and tweak your scoring based off that data, the better your health score will be at predicting churn. The very first question you ask should be: did the customers who I expect to leave, in fact, churn? Group A’ had a high risk of churn. What’s the right turning point for identifying churn?”.

Software Review 96

Software Review Systems Review Scale Underperforming Technical Team 96