Sales Performance Management in the Subscription Economy
In the start-up phase, companies aggressively recruit customers
with the expectation of having a long-term relationship with them
and consciously decide to put short-term protability rmly in the
back-seat. New businesses want recognizable or market-leading
clients to show that there is a strong demand for what they sell.
From the operational perspective, during the acquisition phase,
companies invest their incentive dollars into “hunters” - sales
people who sign up more new customers, with longer contract
durations. They also want to maximize annual contract value
(ACV) to show investors that the product or service ts market
need and that there is money to be made. The metrics that play
the most important role in this stage that affect the design of
compensation plans are the number of new customers, average
contract value and the number of multiyear contracts.
In this stage, our customers are focused on acquiring new customers to grow their business.
The primary focus of their incentive compensation spend will be on incentivizing sales and marketing
teams to increase leads and acquire new logos.
Start-up businesses leverage their ICM solution to:
• Measure & report on the engagement model across multiple teams.
• Design commission, bonus and MBO plans based on nancial metrics, such as annual contract
value (ACV) and monthly recurring revenue (MRR) and non-nancial metrics, such as the qualied
lead velocity rate (LVR).
• Tie an individual’s compensation performance to results on a monthly, weekly or daily basis,
which puts you in a great position for coaching to drive even greater results.
Although most investors don’t expect prot in the early stages, they are looking for key indicators of
future success and the ability to measure those indicators across the entire company.
Start-up businesses leverage their EPM solution to:
• Obtain instant access to the data required to calculate costs associated with sales engagement.
• Analyze protability based on individual, product line or service. This gives the leadership team
better control of the incentive levers that will drive the business.
• Create logical models to better understand how their go-to-market is truly performing and give
the leadership the ability to drill into the right level of detail to make adjustments accordingly.
Sales and Revenue
Start-up businesses need to maintain a laser focus on new business acquisition, targeting the choicest
subset of their prospect universe--despite the strong temptation to chase everything and anything.
Start-up businesses leverage their SRM solution to:
• Automate, or execute on demand, calculations for individual models or all models.
• Dene complex sales prediction rules against any data set, such as customer proles
• Align your sales team and their compensation to your customer engagement model to ensure the
start-up investments are not lost due to inefciencies across the broader team