Published: 27 April 2023
Moving to consumption-based licensing introduces risks that don’t exist when sales are based on traditional buying, perpetual licensing or term-based subscriptions. CSOs must reexamine their sales process, seller coordination and incentive plans to overcome these risks and ensure commercial success.
Consumption-based licensing adds complexity and additional decision points along the buying process, which slows down sales cycles.
In contrast to perpetual or term-basedlicensing where buy and renewal decisions are clearly delineated, consumption licensing is far less specific. The traditional lines between sales and service are blurred, causing confusion inside and outside of the sales organization.
Chief sales officers (CSOs) shifting to a consumption-based licensing model struggle to identify the appropriate compensation strategy and levels because monetizing the value of a new customer is unclear at the time of contract signing.
CSOs leading the sales organization during a transition to a consumption-based
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