9 Consumption-based pricing means revenue is earned through usage rather than generated primarily from bookings and renewals. You may be wondering how to incentivize and pay sales reps if there’s no upfront payment from customers. Rather than frame the challenge around your sales team’s compensation, reorient the question toward customers and ask: “How do you align your sales team to the way the customer derives value from your product?” There are two answers, both of which require modernizing your sales organization: 1. Sales reps must become active participants in the entire customer lifecycle. 2. Your compensation structure must reflect this new role to encourage the right behavior. SALES REPS AS ACTIVE PARTICIPANTS IN THE CUSTOMER LIFECYCLE At the heart of consumption is a customer-centric approach to sales. Incentives are tied directly to the customer’s realization of value. Sales reps must take on a new role where they help the customer discover how great the solution is and give them reasons to use it (and use it a lot). Not surprisingly, sales reps must undertake a sizable mindset shift and learn to invest in customers’ long- term success if they want to reap financial benefits. Sales reps must: • Understand each customer’s unique challenges and what services or products will deliver real value; • Recognize which use cases will encourage early adoption and usage; and • Identify new use cases based on a deep knowledge of the customer’s evolving needs. This intense scrutiny of the customer’s business puts sales reps in a position to build a partnership with customers where each side benefits from the other’s success. Customers are aware that sales reps are incentivized to help them realize value, and this synergistic relationship often leads to a deeper level of trust and appreciation. Here are four things to consider when managing the shift to consumption and transforming sales reps into customer advocates: 1. Deliver education and enablement . Consumption pricing is still a relatively new concept. Your sales reps may be in the dark about what it means, what’s required from them, and how to perform their job to maximize outcomes. It’s important to deliver resources that provide clear guidance and set sales reps up for success. Best practice: Create or update your sales onboarding, training, and enablement assets as soon as you start planning for consumption pricing. Articulate the benefits of consumption and how sales reps can best advocate for it and work with customers to deliver value. 2. Provide data and reporting. Not only do sales reps need proper training and enablement, but they also require access to data-driven insights about their customers. This knowledge enables sales reps to focus their efforts on opportunities where their customers can derive more value, and thus increase their usage of the product. MODERNIZE YOUR SALES PROCESS AND COMPENSATION STRUCTURE CHAMPION GUIDES