Apply / Commission Structures / Renewal & Retention
Renewal Commission
Commission paid on customer renewals - typically at a lower rate than new logos.
Renewal & Retention
Intermediate
How it works
A separate (usually lower) rate for renewals - recognizes that the seller's contribution is smaller on renewals than on new logos. The rate-card pattern is often: New logo 10-12%, Renewal 3-5%, Expansion 6-8%. Lower renewal rates discourage farm-only behavior; pair with retention bonuses to balance.
Formula
Commission_renewal = rate_renewal x renewal_revenue
Worked example
Example. Rate card: New 10%, Renewal 4%. A $100K renewal earns the AE $4,000.
Pros & cons
Pros
- Recognizes lower selling effort on renewals
- Encourages new-logo focus
- Standard in modern SaaS
Cons
- Renewal rate too low can demotivate retention
- Complex if renewal credit is split with CSM
Best for
- SaaS renewal-managing AEs
- Account managers
- Sales-CSM split orgs