MassTLC sales compensation discussion with LogMeIn

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LogMeIn: Who We AreCompany Snapshot:• Essential cloud services for the anywhere, anytime, any device era MOBILE PROs• SAAS Model SMB IT• Freemium model: 15+ million active users, 400,000+ premium subscribers• Diverse User Base: Mobile Professionals, SMB IT, Enterprises• 2009 IPO (NASDAQ: LOGM) ENTERPRISE• 500+ employees in around the worldBy the Numbers:• 2011 revenues of $119.1M• +/- 20% (Non-GAAP) Operating margins• +/- 25% Free cash flow margins $7 Billion Market Growing +20%

LOGM Business Model• Subscription based sales model – 70% annual contracts – annual one time payment – 20% annual contracts – monthly CC payments – 10% month to month contracts• Revenue recognized on daily basis• Payment terms – 70% credit card based – Minimal multi yr deals• Type of bookings – New, new – Add-on – Renewal• Channel – Direct sales (ISR and Field) – E com – Virtually zero indirect channels

Sales Comp Plan – Key Objectives• Ensure plan is focused on one set of rules – Finance/Mgmt Reporting/Quota• Ensure incentives are around what the business wants to focus on – New vs renewal – Sales people get smart fast• Don’t reward things you dont want sales to focus on – Multi yr deals?• Tier the plan – The closer to quota the greater the % paid• Be able to «credit» returns/refunds/non payments• Keep simple – Sales people are not that smart

Sales Comp Plan – Other Basic Objectives• Have room for spiffs – Small $/Let sales manage• Be consistent in plans – Limit quota variances between similar reps• Have some flexibility in decision making – Creates collaboration• Quota vs Presidents Club Goals – 110% of quota• Centralize control over changes in finance/HR• Have a formal plan and sign off process – Dont make details part of employment agreement – What happens to deals in process on termination

Structure Decisions• Revenue vs bookings ?• Profit vs bookings?• Annual, quarterly or monthly plans?• Total bookings or MRR (Monthly recurring billings)• Which products are they selling?• Multi year deals• Perpetual model – License vs maintenance rate ? – Services rate?• Incremental bonuses upon exceeding quota? – $25k/25% plan

JK Personal Pet Peeves• Double comping – Channel – Sales splits• Net vs Gross bookings re channel partners• Avoid tieing to cash collections – Tie it to payment terms• Non $ specific sales goals – # demos – # calls• Foreign exchange impact – Keep simple

MassTLC sales compensation discussion with LogMeIn

by MassTLC on Sep 10, 2012

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MassTLC sales compensation discussion with LogMeIn Presentation Transcript