Rules of Engagement: How to Set Up Reps for Success in Usage-Based Comp Plans

When comp plans hinge on usage, closing the deal is just the beginning.

And with more SaaS and fintech companies adopting usage-based pricing (according to a recent event featuring Insight Partners’ portfolio companies,  84% of attendees reported exploring, piloting, or already using this pricing model), leaders must reconsider how sales teams are compensated. 

But without clear rules of engagement, revenue leaders risk demotivating reps or missing revenue targets.

In this blog, we’ll walk through the five key rules for enabling sales reps to succeed in usage-based comp environments, drawing from real-world examples and insights from teams like Tremendous and Vic.ai.

Why Usage-Based Comp Requires New Rules

Making the switch from a traditional to a usage-based model fundamentally changes the sales rep’s role…and how they’re rewarded. Instead of a linear deal-to-commission relationship, reps now operate in a system where their impact is more distributed and delayed.

This shift forces leaders to rethink what behaviors they want to incentivize. As Scott Shepard, Head of Sales at Tremendous, explained:

“We wanted to tie AE behaviors to the underlying thing we care about—gross profit to the business—which all comes down to spend,” said Scott.

Unlike traditional SaaS pricing, where bookings equate to revenue, usage-based revenue trickles in over time. 

That means:

• Commissions may be delayed
• Forecasting is harder
• Motivation can dip when outcomes feel too far away

As a result, leaders need to redefine success metrics, compensation timelines, and how companies keep reps focused on driving long-term customer value (not just landing the contract).

Now, let’s get into the rules. 

Rule 1: Define Clear Quota Retirement Mechanics

First, define clearly what counts toward quota.

Many teams separate quota retirement from commission payout to keep reps focused on long-term value without compromising short-term motivation.

For example, reps might retire their full quota based on forecasted usage, but receive commission as usage accrues over time.

“Quota retirement will determine the rate that they earn… the rest is dripped over time,” said QuotaPath VP of RevOps Ryan Milligan.

This approach helps unlock accelerators while protecting cash.

Rule 2: Use Hybrid Payout Structures to Balance Risk and Reward

Next up, think about your payout structures. 

In our most recent report, we found hybrid payout structures to be most effective. 

To balance business risk with rep incentives, most teams use hybrid models that combine upfront and milestone-based payouts.

Example: An SMB SaaS company pays 25% of commission at deal close, 50% upon onboarding, and 25% once the customer reaches 50% of their estimated spend.

“This model has always felt like the fairest on both sides,” added Ryan.

Rule 3: Tie Rep Engagement to Post-Sale Behavior

You should also pay close attention to what responsibilities the rep will have after the sale.

In usage-based models, onboarding and early adoption drive revenue. That means the rep’s job isn’t done at signature.

Scott said Tremendous credits reps for moving deals into onboarding…with a CSM’s approval. This ensures reps care about setting customers up for success.

Consider milestone bonuses for early usage or onboarding completions.

Report: Ramping Comp Plans

See how 100+ revenue leaders set their new reps up for success by creating ramping comp plans with adjusted quotas and commission rates.

View Report

Rule 4: Account for Ramp Time (For Customers and Reps)

Usage builds slowly. So does rep impact.

Just as customers may take weeks or months to ramp up their usage, reps navigating a usage-based model also need time to develop pipeline, close deals, and see usage-based revenue materialize. 

Unlike traditional models where pay can land within a month, comp here may trickle in over quarters.

Tremendous addressed this lag by extending their AE ramp time to 18 months for enterprise reps, acknowledging that closing the deal is only the first milestone in a longer revenue realization journey.

This ties back to earlier rules around quota retirement (Rule 1) and hybrid payouts (Rule 2), both of which can help smooth rep earnings during a slow start. 

Ramp periods should be designed with usage timelines in mind, not just sales cycle length.

Adjust your expectations and your comp timelines accordingly.

 Reps need space to influence customer outcomes, and that means longer performance windows and patience from leadership.

Rule 5: Use True-Ups and Forecast Accuracy Thresholds

Even with strong forecasting, actual customer usage rarely follows a perfect curve. 

This is why true-ups are essential, serving as a safeguard for both the business and the rep.

If you’re paying commissions based on estimated usage, true-ups ensure compensation aligns with the real value delivered over time. They allow you to adjust payouts if actual consumption deviates meaningfully from the forecast.

For example, a cloud services provider implemented a tolerance band: they only trigger a true-up if the customer’s usage ends up more than 20% above or below the original estimate. 

This kind of buffer protects reps from frequent clawbacks while still holding the business accountable to accuracy.

Additionally, this rule complements what we discussed in Rule 2 (hybrid structures) and Rule 4 (longer ramps). 

True-ups give you the flexibility to reward reps earlier, based on estimates, while still reconciling when the full value becomes clear months later.

Used well, true-ups create trust. They reduce risk, limit overpayment, and reinforce alignment between forecasted and actual value without overwhelming RevOps teams with admin work.

Final Takeaways

If your revenue model is tied to usage, your rep strategy needs to evolve. Use these rules to set reps up for success:

• Quota credit upfront, with payouts tied to real usage
• Hybrid models that drip commissions based on milestones
• Clear incentives for post-sale behavior
• Realistic rep ramp periods
• Forecast-adjusted true-ups

Usage-based comp plans can work—but only when reps are equipped to win within them.

For more examples and plan structures, read our full Usage-Based Compensation Report.