The basics of managing a commission plan for a SaaS company

By Helena Hernández

Make your SaaS: Software as a Service sales reps happy

We may think that SaaS commission calculation is way more complex than standard commission calculation. The truth is that this type of commissions tend to be ambiguous and there’s where things get complicated for sales managers.

But, the secret is very simple. The key difference between SaaS sales commissions and other sales commission for other products is that reps are paid based on the time period value of the deal instead of the unit price of the product. You have to start with this idea in mind. At the end of the day, what matter more is Software as a Service commission calculation is how you measure deal value.

Software as a Service plan can use the monthly recurring revenue (MRR), Quarterly Recurring Revenue (QRR) or Annual Recurring Revenue (ARR) as a metric. Find the better metric for your team by basing your SaaS sales compensation plan on a recurring revenue time-frame that equals your most common contract renewal term.

It is important for a sales manager to perform subtle modifications to commission plans as the years goes on because of the nature of the market. This demonstrates that the manager is thinking ahead to manage Software as a Service commission plans in a flexible and scalable way.

And, we insist on two things. One, keep the plan as easy to understand as possible; it should be very obvious for your sales reps to know what to do and how to act to get best rewards. Two, use technology to automate your process, a commission tracking software; Blitz is an example of what a commission tracking software should be.

Create multiple sales commission plans in the same platform with Blitz.  This software will enable you to adapt to your sales compensation plan changes and your company evolves. Schedule and project your future sales based on contracts, and integrate your billing systems. Blitz has the ability to adjust to quotas, sales reps IDs and different commission types based on the sold products.

Start your commission tracking plan for your SaaS sales department and have a sales team full of top performers!

Tags: Business Management

About Blitz

Blitz is a global software for sales commissions. We help our clients to track and calculate sales commissions effectively and on-time.