Those in usage sales how have you liked it compared to yearly ARR contracts? I’ve heard it’s good for continuous commission and attainable quota, but really tough to smash it out.
But it’s easier to break in though as there aren’t any risks that they pay for something that doesn’t get used right?
not really. how will a customer stop a business critical software if it get's overused? shut down all support agents and wait for customers to explode on social media? unlikely... it's rather likely that the blame game will start who underestimated usage.... and back to my original comment...
the point is that they are concerned that they don't know how much it gets used. if you convince them that it is underused during sales - why should they buy it at all? is your solution so bad?
Makes sense so you have to be really good with roadmapping the usage timeline for them to forecast.
It’s a farmer’s game with a hunter’s expectations sometimes. The commissions are slow and compounding, but that continuous commission takes time. You'll have to work closer with your customers, which can be really good depending on the seller.
It takes a long time to get paid. But when you do, it's a lot all at once. If you're talking about consumption based model of $$ - you def have to be patient. All my OFs were $0 so easy to get contracts across the line. But then I had to work with the customer to track towards consumption (selling MongoDB btw) - and again it would be months before I got paid out for that. But I did cash a lot of big checks towards the end. Don't join a company consumption based unless you plan on being there for 2 full years. It's a compounding positive effect, but expect to live on base pay for most of year one.
This is great context! Thanks! So would you recommend it? I feel like vector databases, databases, and cybersecurity can be a great career long term and those areas can be interchanged with the big money making companies.
It depends on how patient you are. The upside earning potential is great. But it depends on your comp plan. I'm moving away from it currently because they changed my ARR % payout from 14.5% to 3.5% - so now I'll have to wait still, but the $$ won't be worth the wait at all. So I'm running for the hills. But if you have a high base, a good comp plan, are content to wait for up to a year before you see any meaningful commish payouts, and want to be at a company for the long term, then yes it has the potential to be worth it.
Hey for what role was your ARR % slashed so much? Are we talking enterprise, commercial or product led sales?
That’s good to know! And damn that is one hell of a slash. Did the teams absolutely crush it and now finance is reigning it in?
Hahahahahha yeah exactly that 😂😂😂
yup. customers hate usage sales because they don't know how much they pay in the end and they are scared to totally crash internal budgets if the software project becomes a success and get's used a lot more than expected.