Comp Plans That Drive Real Usage

Most comp plans buy the wrong behavior in a usage-based world—and the results show up as stale pipelines, noisy dashboards, and hunters who drift into farming. We sat down with seasoned sales ops leader Chuck Lee to unpack how to pay for outcomes that actually matter: a clean start, a predictable ramp, and a scalable hand-off that sticks.
 
 We trace a real transformation inside a large inbound motion where reps were incentivized to chase the oldest leads and obsess over consumption they didn’t own. By stripping the plan to a simple, action-focused design and shutting off post-implementation pay for AEs, the team saw a 40%+ lift in conversion. Chuck explains why high-velocity sales demands fewer choices, not more; how to align quotas to volatile demand without eroding trust; and the telltale signs your plan is buying noise instead of revenue.
 
 Then we go deep on usage-based mechanics. The true “deal won” is when the customer starts using the product, and the second milestone is the ramp to forecast. Chuck shares how to set the AE’s window in the deal using historical ramp curves, why FP&A should co-own the model, and how SLAs between sales and CS prevent credit confusion and dropped hand-offs. We also confront the perpetual commission trap that turns hunters into farmers, and outline a cleaner split: hunters own start and ramp-to-target, farmers own adoption, expansion, and problem-solving.
 
 If you’re wrestling with comp design for usage-based sales, this conversation gives you practical guardrails, from monthly quota tuning and points-based payouts to role clarity that protects new logo growth. Subscribe, share with your revenue team, and tell us: what behavior is your comp plan really buying?

Transcript

Seth Marrs: 0:04

Hello everyone, before we jump into the next episode, the third of four around usage-based pricing with Chuck Lee, just wanted to let you know the next two weeks we're going to be taking off to spend time with our families, and I hope you're doing the same. The final, the fourth and final usage-based podcast will be done on the 7th of January. Wanted to thank you all for listening, and I hope you have a great holiday. Hello everyone, welcome back to the Innovative Revenue Leader Podcast. This is the third in our four-part series based on usage-based sales. So today we'll take another practitioner's view on usage-based, but we're going to look at it from the perspective of how to compensate for this type of motion. So, another hidden expert in this type of sale and this type of work is Chuck Lee, and he's joining us today. He's a seasoned sales operations enablement leader with a really strong track record of driving revenue growth, modernizing sales organizations, and improving seller productivity across payments, data, media, and telecom industries. Most recently, as the SVP of Sales Operations and Enablement for Corpay, he's led Salesforce Strategy, Sales Planning, Compensation Enablement for an$800 million business, and it has delivered major gains in conversion, productivity, and sales growth. This is something that I know firsthand because we have both worked together. So, Chuck, I really it's really great to have you. Great to talk to you again.

SPEAKER_01: 1:34

Yeah, thanks for having us, Seth. Um it's been a great probably five, six, seven years, God Lord knows how long that we've been working together, talking, keeping touch. So more than happy to jump in here and talk about some of these business problems that we have talked through in the past.

Seth Marrs: 1:52

Yes. And I mean, I going back to that, I mean, yeah, our our history is is pretty long and it's interesting because when we're when we were tackling this problem and talking about it five years ago, it wasn't cool then, right? It was, I mean, uh to a certain extent, like data providers like Snowflake, AI have created this new model that everybody's talking about being the great new thing that's gonna happen. We were slogging away having those conversations five years ago before any of this stuff was even discussed.

SPEAKER_01: 2:24

Yeah, yeah. I mean, I remember some of the comp plans that we thought about were like this is a super basic comp plan, and well, like actually they're way out in front of the market, right? Because of the way that the way that we were we're dealing with this big question of how the heck do you pay the person for selling this thing?

Seth Marrs: 2:47

Yeah, when you didn't technically sell anything yet, and that that's the problem everyone's trying to trying to solve with this. So, like when you think about like this, this is talk about the process side, but like the the compensation side is really challenging, especially when you get a finance person in the room versus a salesperson, because best practice would be I pay them up front and let them go sell something else. But the reality of this is I'm very hesitant to pay somebody for no what when no money's actually coming. So you did a project a few years ago around this that led to significant overachievement. Can you talk a little bit about that project? Kind of what what made it successful and just a little bit more because it it was we worked together on it, and there were some really interesting things that came out of it that allowed you to be successful.

SPEAKER_01: 3:41

Well, no, uh I'll say that this is an area when we'll talk about it where we fell into the consumption trap. So you know, and you get and and always the question is in this consumption stuff is how long do you keep that new business seller in in the deal? So on this particular, you know, and we've we've got this out in the I think we've you've got a blog that you linked out before about this for more details and information. So, you know, nothing new here. The core issue that we had was we have a pretty scaled-up inbound sales team, and um we had a team dedicated to converting inbound leads, and this was a huge lever in our sales plan. So we got into this thing and we were just kind of stuck, you know, like we could not get, and always, you know, like the sales plan for next year, we're gonna unlock all this value by unsticking the conversion rate. So, you know, we we did a lot of stuff, and I think there was a whole bunch of things that kind of hit at once um that helped here, but we put in lead scoring, we did a lot of work around duplicate leads. Um, we put in a new sales methodology, and I think all of that was incremental help. But what really levered the thing up was we looked at the comp plan and I was like, oh, goodness gracious, two, you know, there were two big bad things there going on. Number one was do you think you're doing the right thing by the seller by having this idea of, hey, we're gonna give you an extended amount of time to convert the lead? And in our case, we said into month two, which is because you may get the lead the last week of the previous month, and there's you know, I only got a chance three times to call the person. We're penalizing the seller for that all these things. Um, but that threw this little curveball in there, which had the seller thinking to themselves, that old lead's the one I really got to call into because it's about to go away. I'm about to lose my last chance.

Seth Marrs: 5:37

Ah, so call like that were least qualified.

SPEAKER_01: 5:43

Right. And the Lord, we are least likely to close anyway. I mean, they may have been super qualified, but they're just old, you know. So they may have already been on with another provider by then. Um, and then we paid our sellers on consumption post-implementation. Now, the idea was you're not gonna get into the deal. We have a whole other team that's gonna work on the consumption side of the thing. We want you to focus on this motion. You throw that into top plan and just know that you're gonna get what you pay for. So, what we so what we were paying for was sellers to call the oldest leads and sellers to call existing customers. So you can imagine double-edged sword here. Number one is we're not we're looking for every reason to the world not to call the newest lead, which has the best conversion rates. And then in a high velocity sales motion, you really kind of want to simplify the thing and have the seller locked in. I don't make a whole lot of decisions on am I calling this, am I calling that, am I calling that thing over there? I'm calling what's in front of me, yeah, and I'm getting paid to call what's in front of me. If I'm have if if every sell, you got a hundred sellers and each one can make their own decisions, you're introducing so much variability to what should be a pretty much of a machine. So, you know, so we simplified the heck out of the plan. We stripped it way down, kind of went to a point space thing. I mean, we got out of the revenue thing. We just said, hey, look, all the technology, everything we've done, let's get this seller focusing in what's in front of them. And I mean, you know, we probably saw 40% lift and 40-50% lift in conversion rates, not, you know, as a percentage increase.

Seth Marrs: 7:20

Yeah, I mean, and one of the parts I was really interested around that is you kind of had to filter out the noise about what a seller wanted. Because what they were telling you they wanted was more credit for stuff outside of the month. And what you wanted was what you realized is I just want you to call the most, the the earliest leads and to get whatever you can get closed for the month. And it inverted it back to focus on closing the month versus focus on keeping the opportunity.

SPEAKER_01: 7:49

Well, let's be clear, all the seller wants to do is make more money. So the problem is inside of the comp plan, we're putting all this noise in there that distracted them from uh trying to figure out how to make more money. You know, they were getting into these reports about how the consumption was working, and you know, you had one seller calling in, another seller calling in. And when we started double-clicking there and started cleaning the thing up, what you found out was the only reason they cared about all those reports, all of that, was because we were paying them to care. You know, you'd strip that part out and say, Hey, look, what happens if we didn't pay for you that for you that anymore? Would you even want to ever look at that report again? They're like, Are you kidding me? You know, managers are looking at the reports, managers are calling into the accounts. I mean, you just had all this noise in the ecosystem. It took a little bit kind of to get them off the idea of the oldest lead, but again, they had uh volume wasn't an issue. So, really, what happened was the other complex, you know, complicating factor here was uh capacity. So you only had so much capacity, so it's literally like we were sacrificing a new lead for an old lead. And so once you took that old lead out of there and all the capacity focused up front, and you paid them on these units, so you just had to kind of back into the match of complicated because you're dealing with you know kind of um digital demand flows and what is the right quota target. So again, here we go into you're rolling out a new plan, interlock with sales ops, sales, enablement, um, constant rebalancing of quotas a little bit where you're kind of looking at it. Do we look at it monthly? Do we look at it quarterly? Hey, how are we doing here? You know, kind of the 50-60 rule, or about half the people at plan, okay, it's working, you know, because our plan's linked to on target earnings. So we know at least if they're kind of we have that 50-60 percent at the month at plan, you're kind of gonna be coming in at OTE. But I'll tell you, like, it's hard because someone's demand would just go up, and you're like, oh shit, 80% of the team exceeded, you know, and then sometimes the very next month it might dry up, and you're like the the kind of so it kind of falls into a quarterly thing. And what was interesting there was the idea of managing quotas and that, you know, it's what are you doing with the quota in this use case? In this use case in this dynamic, it worked okay with us because it was tied to this kind of inbound motion, and um, the really what drove the number is the amount of money you're spending in the market on digital spend. So, you know, as we're dealing with the quota and adjusting it month over month, that was kind of getting some intense conversation, but we gave back. So the thing was is we increased quotas, but we also lowered them. It just depended on how do we make sure this thing is dialed in where half the teams that plan, yeah, but not doing retroactively. So, anyway, that was it was a lot of fun.

Seth Marrs: 10:54

Yeah, so I mean, but balancing in that way that the that's really important because it allowed you to hone in, you're paying on a much tighter timeline. It would never, I mean, the the industry that you're working in is was very volatile to the market. So you have demand, so you had to do it monthly, and by tying it that way, it allowed you to have a lot tighter quotas. But you did something that a lot of companies don't really think of. Their companies are really good at increasing quotas, they're really bad at decreasing them. But the reality is if you get really in tune with the market, you're going to increase and decrease them over the course of the year to get the best quota levels. Right. Makes sense. Okay, so in a typical con like one of the differences in a typical contract-based plan, the seller usually is credited at the point of PO and they move on. With usage-based plans, there are two other points that are of significant importance when you do this. One is to get the comp the customer to start using the product, and then the other one is to ramp the sales volume to forecast. So can you talk a little bit around how you dealt with both of those? How do I get you to start using our product? And then also, like, what do you do to push a seller to be able to hit a number that you put into their into their quota on the ramp for for the spend?

SPEAKER_01: 12:24

Right. So this is a really this is another tough one. Um because the underlying issue is the most difficult area of sales. Sales is a very challenging job. Um, God love our sales teams out there. And the most difficult area generating revenue is displacing the incumbent, no matter what the incumbent is, the status quo, um you know, primarily status quo, right? That's what I'm trying to displace out of there. So if I'm in as a seller and you're not careful here, and you pay them only for the kind of the front end thing. I've seen this trap. I have seen this trap. You pay them for the front end thing, this is super um easy for them to kind of push the easy button and position the solution as a backup or a trial or for just part of this portfolio. So you just have this huge risk where you know you'll see, hey, our the only thing we need to do is generate this front-end thing and and and don't worry about it. Well, guess what? The they pushed the easy button and they didn't do the hard work of making the change argument to the entire buying team, you know, and that's really where the hard work comes in. So miraculously, you start seeing the volume pick up because people are pushing the easy button, they found out it's pushing the easy button, you see the consumption drop off.

Seth Marrs: 13:58

So then it just turned and even if you have a good customer success motion, you're still stuck because they didn't really want to buy it to begin with, they only wanted to start, and with usage-based, it's easy to start, especially if you have a backup, and I can just buy it and put it on the shelf and use it if I want to, use it for whatever.

SPEAKER_01: 14:16

So little department, one user over there. Me as a pilot, just put me in under the the seat, and I'm right there in the seat, and it's really just all you did persuade was chuck in sales ops to do it off over here road, but like I got the subscription, you know, but you didn't get the entire logo behind me. I mean, no matter what your CSM team's doing, they're banging me, and I'm like, that does this thing doesn't even exist behind me, right? So um the cut so one way to think about it is and you need to kind of it it gets more challenging if you have a less mature business. The more mature, this easier is if you've been selling the solution for a while in it in a different way where you understand how buyers typically rant. And so if you have a good model over how buyers typically rant, you know, you that then the question starts turning to is like kind of what's the window I want my new business seller to be in here for? Because you're definitely gonna have to get the thing started. You know, you're gonna be with them to get it started because until they start, this whole thing is vaporware. So you gotta be with them until they actually start consuming it. And then let's just say that we know that you know, I put in a forecasted deal value of X, whatever the deal value may be. And typically in that kind of a deal, we know based upon history that it takes, you know, three to four weeks to kind of get the thing to ramp up. Yeah, maybe that's the amount of time you want to put the seller in there for, right? I mean, there's no easy answer here. There's no e there's like you're really stuck with this bouncing act, but take a lot, take need some good modeling to understand ramp time, and then um you kind of got to keep looking at it, you know, because I'm paying the seller this way. So my assumption is they hit this ramp period, it's gonna annualize in a way. So I'm gonna go ahead and pay you for that nut. And if for something reason this thing drops off and your model starts not predicting the future very well, then you got to come back in and say, okay, we got to get this thing modeled right. So you've got to have right, I'd say the one of the most important parts here is like really good partnership with um your data teams or FPNA, wherever that kind of thought process would live. Who are you partnering with to make sure these models work right? And I would always say, like, probably not great to have that sitting in sales. You know, you want to have someone to keep you kind of honest on things, and you know, that's where FPNA is great because they're always gonna kind of, you know, be the market reality or the data reality that's kind of like, well, you know, we're kind of making sure this number's dialed in and we're bringing that rate down, or we're gonna bring it up, like it's actually doing better, like the customer success motion is working better, or the seller is doing a great job in this three weeks, and this thing is ramping faster and and it's sticking better. So, you know, we want to make sure that whatever we're doing in the sales motion is accurately reflected in what we believe the deal is gonna deliver, and that takes constant refreshing, and you want to have a good feedback loop. If the deal's doing better, we're gonna pay you more over time. If the deals are doing worse, we're gonna pay you less, or we're gonna adjust the motion in some way.

Seth Marrs: 17:32

Yeah, and and these are fundamental things that you see across any usage-based company. One, the start is usually the one of the one deal, not the contract signing. And like in SAS, contract signing deal one, because now you're committed to the contract. In usage-based, the best practice is when they start using the product, the clock starts. And then the other best practice you were talking about is you need to determine the ramp times. That's when the seller needs to be involved. Once it ramps to a level, that's a great time to hand it off. So, doing the analytics to understand it takes six weeks, 12 weeks, whatever, and then giving a target based on analytics to be able to do that, huge best practice. And then the other piece is getting them out once that one that once that's done.

SPEAKER_01: 18:17

I want to shift and talk about another thing that I see, which is oh, and by the way, one more piece in there the communications, the SLAs, the way you document back and forth between all these people when you have multiple people in a deal at the same time becomes absolutely critical. So I just wanted to put that in there. Like that whole thing falls apart if the people aren't talking, if the whole process is kind of like not looking at from the top down, but it's like this wobbly thing, we're standing up as we do it. That is not great.

Seth Marrs: 18:47

Yeah, it creates some of the challenges you talk about. If you get a rogue element that's doing something different in that process, then you wonder why quotas get all screwed up because now you have half the team doing one. Yeah, it makes total sense. So here's here's an approach that's come up multiple times that I want to get your take on. So some companies, especially smaller companies, will pay in perpetuity. So I'm just gonna pay you 2% on everything that you generate for as long as that person is a customer. And like I've always talked about that as something that is you you really want it sounds great in practice, but it's one of those weird things where it the sellers hate it when it starts and love it when you hate it. They hate it at the beginning because they have to ramp up, but once they've ramped up and have all this, they they love it. How like how do you see the like just pay as you go and just never take a person off? Might as well just give them a percent. I mean, they've earned it. Like, what what's your take on that?

SPEAKER_01: 19:49

Well, first of all, it depends upon how are you planning your business around what you expect that role to deliver.

Seth Marrs: 19:56

Yeah.

SPEAKER_01: 19:56

So if you have a business plan set up. Where you have this kind of new business acquisition machine that's taking care of that. Because what's going to happen, and I don't care where you are or what you're doing, you're asking the sellers building a book. So whenever you say those words, building a book, I'm building a book, I'm tending to the farm. Here I come with Choice Land, USA. Um, also pretty much easier to sell into an existing deal than a new deal. So as long as your whole kind of motion is set up that way and you've got someone else worrying about the new business, it can be fine, you know. But if you really expected that AE and their AEs, and we expect them to generate new logos, and it I see it all the time. I talk to a lot of people out in the market that are in these smaller businesses that are expanding, and it is a trap because you start with that new business acquisition engine. You're not necessarily thinking through the revenue engine in a way of what do we do with this thing, kind of as it goes and becomes an account. How do we reckon with those motions to upsell and cross-sell? But we're just going to keep that person in the deal. They kind of always had them, they know each other very well. It's a relationship is formed and all those good things. Again, nothing wrong with it, unless you expect them to be a new business hunter. And then you have a business model, all of a sudden it's like, whoa, whoa, what just happened? Our logos aren't coming in. We've got a bunch of hunters on the farm. And if you think about like the hiring profile, so the whole world is completely different. I I've seen the thing like, oh, we're great, we're hiring for the hunter farmer, you know, which is like, I don't even understand my hiring profile. One is resilient, the other is a problem solver. You know, I mean, you just start getting into these things. Hey, how do we develop that? You know, one of them really needs to be expert at how do I work into a deal and sell. Another one, and AM, it's really important for them to know how to work the problems that come up inside of the company.

Seth Marrs: 21:59

Yeah.

SPEAKER_01: 21:59

So one of them, I'm the face of the company into the buyer. The other one, I'm the face of the buyer into the company, you know. So like it starts getting to be really difficult. How do we develop them? Uh, and then you can put it into the comp plan, you're like, oh, you're asking me to figure out in how I pay these people, which is no big deal. It's only the absolute most important thing in their life. So because we've decided to have this, this not could do the, you know, it's actually like we've chosen as a company not to do the hard work of figuring this out. Yeah, we're gonna stick it in the comp plan, we're gonna let the seller be the decision maker, and we're probably gonna make it be where none of us are ever really happy because they're gonna figure out the way to maximize earnings is gonna be in the farm. I don't want to maximize earnings.

Seth Marrs: 22:50

Yeah, and and it's it's interesting, right? Because it sounds good in price, it's a it is 100% a trap. It sounds good because at that point, your AE that's hunting, you want them to go build the business, and you don't have a lot of the business to build, but then when the AE is successful, that great AE is now an AM, and they're just sitting back in the amount of new business they could generate on a plan like that to it's just nowhere near as much as they're gonna generate on the larger AM bucket that they built.

SPEAKER_01: 23:19

Yeah, I'm looking for the book. Uh I'm looking at my bookcase there. Well, was it predictable revenue? Was it the book way back when it's like, why do we have SBRs? And it was kind of like the same story of I need someone doing this lead gen because once I start getting into a deal, that's all consuming for me. And this is just the same story, just another extension of it. You want to see something this is always the classic thing because you're trying to build the prospecting muscle, and the um you want everybody like we're doing all this stuff to make sure. Really, the whole reason you're doing call blocks and for all this kind of stuff is the distractions called, I'm working the farm. Oh, we got to take all those distractions of the farm away from we're gonna force you to call every day from 9 to 10 because we don't want you to get into the farm and we know the farm is calling, is beckoning you there. I mean, and and by the way, the the thing I talked about before with implementation in the deal, where I'm sticking with it for a while, brings up the same issues. That's why you got to be really careful of like how long do we let them stay on the farm for? Because even then, even while I'm implementing it, I'm kind of you know, I'm hoeing the dirt and getting the thing ready to go. I'm I'm not out there hunting, you know.

Seth Marrs: 24:38

Yeah, yeah, yeah. And that's where you're most valuable to a large extent. There's a reason why retention is an easy, it's much easier to retain your customers than it is to build new ones. Thank you so much for for joining. Really appreciate it.