What is Outcome-Based Pricing?
SaaS pricing models are evolving.
Although a traditional fixed-rate monthly or annual subscription was once the norm, companies have increasingly adopted usage-based pricing, where customers pay for what they use, aligning pricing with customer value. The latest value-based pricing strategy is outcome-based pricing, where customers pay based on realized value or agreed-upon success metrics, not just consumption or time.
According to Forrester, “this shift reflects the reality that value doesn’t always scale with user count.”
They continue by explaining, “APIs and AI agents are accelerating the shift away from user-based pricing by delivering value through automation, integration, and scale rather than human interaction. As AI continues to decouple usage from value, buyers will increasingly favor outcome-based pricing.”
Report: Usage-Based Compensation Plans
Learn triggers, tactics, common structures,and best practices.
View ReportHow Outcome-Based Pricing Impacts Sales Compensation
Aligning rep incentives to customer success metrics in sales compensation plans is the key to preventing short-termism. It encourages reps to build long-term client relationships, driving long-term value, and achieving sustained growth. This alignment motivates reps to identify and close deals with customers who can achieve their desired outcomes by incorporating customer success incentives, rather than relying on short-term revenue-based commissions.
Like usage-based models, an outcome-based pricing model often involves delayed payouts when paying based on actual revenue rather than estimated revenue. It also makes forecasting challenging due to factors that may influence outcomes throughout the year. Common variables that can be tied to payouts include milestones achieved, sales performance metrics hit, and customer ROI targets achieved.
Challenges of Comp’ing on Outcomes
Although outcome-based pricing models require tracking specific data to determine compensation payments, sales compensation best practices remain applicable. For instance, establishing a balance between base pay and variable compensation to ensure sales rep motivation.
“An AE’s performance in any given quarter can feel prebaked,” according to Scott Shepard, Head of Sales at Tremendous, “Without a lever to pull now, reps risk going on autopilot or giving up if behind pace.”
In addition to balancing rep motivation, forecasting complexity, delayed rep gratification, and data quality are challenges to be navigated when creating a comp plan for an outcome-based pricing model.
- Forecasting complexity: Harder to predict when outcomes will be achieved.
- Delayed rep gratification: Dopamine gap if payout is far from deal close.
- Data quality: Requires reliable tracking of success metrics.Rep motivation balance: Avoid disengagement if outcomes are slow to materialize.
Comp Plan Structures for Outcome-Based Models
Consider these commission payout models to help address some of the challenges of compensating for outcome-based pricing models. The following frameworks stem from usage-based comp consulting calls.
| Milestone-Based Payouts | Pay partial commission when each milestone is reached (e.g., customer onboarding, first measurable ROI, renewal). |
| Blended Estimate + Actual Model | Give partial payout on projected outcome value, true-up after results are validated. |
| Trigger-Based Payouts | Commission installments tied to agreed success metrics being hit. |
| Cohorted Retention + Expansion Targets | Separate metrics for retention of outcome accounts vs. expansion into new outcomes. |
Best Practices for Designing an Outcome-Based Comp Plan
Using these comp plan design best practices will help you create an effective outcome-based pricing compensation plan.
- Set clear, measurable outcome definitions: Eliminate ambiguity.
- Shorten the feedback loop: Where possible, introduce interim metrics or bonuses to keep motivation high.
- Balance rep cash flow: Consider partial upfront payments at reduced rates.
- Align with company strategy: Comp should drive behaviors that match business priorities, not distort them.
- Use clear and transparent communication: Ensure reps understand the rules, expectations, and potential earnings, as well as how to calculate commissions and payment timing.
Outcome-Based Pricing Comp Plans Examples
Use the following examples as models to help you get started in creating your outcome-based pricing compensation plans.
Example 1: SaaS Implementation Firm (10 AEs)
This plan focuses on a customer operations cost reduction outcome.
Outcome Metric: Customer reaches 20% cost reduction in operations.
Quota: $500K annual outcome value.
Structure: 50% payout on projected value at deal close, 50% on verified outcome within 12 months.
Notes: True-up annually to reconcile over/under performance.
Example 2: FinTech Platform (Enterprise)
This plan, by contrast, focuses on driving gross profits.
Outcome Metric: Gross profit generated from the client’s spend.
Quota: $5M gross profit quota.
Structure: Quota retirement as profit accrues; supplemental quota credit for new $100K+ outcome deals.
Notes: Split target — 60% gross profit, 40% new outcome accounts.
Design, track, and manage variable incentives with QuotaPath. Give your RevOps, finance, and sales teams transparency into sales compensation.
Talk to SalesWhat to Watch Out For
When structuring outcome-based pricing compensation, it’s easy to overcomplicate plans with too many micro-bonuses or metrics. Overly complex plans confuse reps and dilute motivation. Another risk is misaligned ICPs–chasing outcomes with low profitability or high resource drain. Finally, avoid unrealistic ramp timelines. Because outcomes often take months to realize, allow for longer ramp timelines and payout schedules that reflect this reality.
Keeping these pitfalls in mind will help you design outcome-based comp plans that motivate reps, drive sustainable growth, and align with customer value.
Schedule time with QuotaPath to help structure comp plans while automating quota attainment tracking and commission management.
