Three advantages of consumption models

In this short segment of the Revenue Builders Podcast, we revisit the discussion with Jose Fernandez — former Head of Global Sales Development at Google and now CEO of Easy Comp — breaks down how compensation must evolve when companies shift from traditional SaaS licensing to consumption-based models. Drawing from his experience at Google Ads, one of the most successful consumption engines in business history, Jose lays out the structural advantages of consumption models and how GTM, onboarding, forecasting, and comp plans must align to unlock growth.

John McMahon and John Kaplan then expand on how consumption changes seller behavior, deal sizing, renewal dynamics, forecast accuracy, and quota mechanics. This is a must-listen for revenue leaders, sellers, and anyone navigating the industry-wide shift toward usage-based pricing.

KEY TAKEAWAYS

[00:00:46] Companies transitioning to consumption models often copy SaaS licensing structures instead of designing comp that amplifies consumption-driven advantages.
[00:01:34] Three core advantages of consumption models: lower barrier to entry, value-aligned spend increases, and product-led expansion.
[00:03:07] Aligning GTM roles — new business, onboarding, and account management — enables scale and fairness in comp.
[00:03:57] Forecasting in consumption models becomes an analytical discipline, requiring predictive models rather than rep intuition.
[00:05:00] High-quality customer fit at acquisition can result in massive upside — one rep earned huge commission from a $15M three-month advertiser.
[00:07:02] In consumption, churn can happen in a week — sellers must ensure rapid value realization, not just contract signing.
[00:08:00] Sellers often intentionally downsize initial deals to ensure burn-down and protect compensation.
[00:08:59] PLG and sales-assisted models blend; comp must account for small initial usage that grows rapidly.
[00:09:48] Companies balance advance payments to reps with clawbacks to protect against churn.
[00:10:10] Smart sellers can land small, prove value, and convert usage to multi-year, high-value commitments.

QUOTES

[00:01:10] “Companies take too much inspiration from the old model instead of designing comp that amplifies the advantages of consumption.”
[00:01:56] “Customer spend is directly proportional to the value they get — and their understanding of that value.”
[00:02:19] “If you have an amazing product, some of that growth is going to be product-led, regardless of the sales team.”
[00:03:57] “Forecasting in a consumption model is an analytical exercise — not something you ask an account executive to guess.”
[00:07:54] “In consumption, a customer can use it for a week, turn it off like a light switch, and move on.”
[00:08:38] “PLG might start with $500 on a credit card and scale into a major enterprise deal.”
[00:09:28] “Sometimes comp gives future credit for usage trajectory — but companies will claw it back if churn happens.”
[00:10:33] “There’s a lot of gold in this full episode — make sure you check it out.”

Listen to the full conversation through the link below.
https://revenue-builders.simplecast.com/episodes/driving-sales-behavior-with-effective-compensation-plans-with-jose-fernandez

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Amazon Link: https://a.co/d/1K7DDC4

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https://my.ascender.co/Ascender/

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