Article · 10 min read

How to build PLG sales comp plans

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Three concrete ways to handle the awkward case where the product sourced the deal, including a higher first contract rate with no expansion pay. It answers the specific question rather than talking about PLG in general.

  • 58 percent of surveyed companies run a PLG model and 91 percent plan to push further into it.
  • Most cap expansion commission eligibility at 12 months from the initial deal, some at the first 90 days.
  • Paying 20 percent upfront is very high, and only makes sense when the account will clearly add users later.
  • If 30 percent of free users convert without an AE, build in a cliff or decelerator so you are not paying for organic conversion.

It answers 2 questions

  1. How do I build a comp plan that pays for the strategy we actually have this year?
  2. How do the best companies pay reps in a hybrid or product-led motion where the product sourced the deal?

Read with it

  1. From the Chennai-built comp platform that actually runs these plans for hundreds of companies. It gives the pay mix by role... Everstage Article · 18 min read SaaS Sales Compensation Guide: How to Design Scalable and Fair Plans Everstage
  2. Five design rules worth memorising, including show causality and keep the payout cycle under 60 days, plus a business case... Winning by Design Article · 15 min read Compensation for SaaS Sales Organizations Winning by Design
  3. A worked example for a 3M dollar ARR business with two or three reps: 200k OTE at 50:50, quarterly targets blending new,... Pocus Article · 11 min read Sales Compensation: How to Choose the Best Plan for Your Product-Led Team Pocus
  4. A deliberately contrarian first plan: cover the rep's fully loaded cost first, then pay 20 to 25 percent on everything above... SaaStr Article · 9 min read A Framework For Your First SaaS Sales Comp Plan Jason Lemkin
  5. Podcast · 31 min Aligning sales compensation with strategy, not SKUs (with Stephen Long) Stephen Long
  6. Podcast · 37 min Incentives and Compensation in Product-Led Sales with AJ Bruno AJ Bruno
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