SaaStr 785: Usage-Based Revenue Models: Successes and Pitfalls from Checkr COO Lindsey Scrase on CRO Confidential

Podcast: The Official SaaStr Podcast: SaaS | Founders | Investors
Host: Sam Blonde
Guest: Lindsey Scrase, COO (formerly CRO) at Checkr
Release Date: January 8, 2025

Episode Overview

This episode of CRO Confidential dives into the intricacies of usage-based revenue models in SaaS, focusing on real-world insights from Lindsey Scrase’s leadership at Checkr. Lindsey discusses scaling a mature, multifaceted go-to-market organization, transforming sales incentives, and aligning teams around customer value and actual revenue realization. The conversation is packed with lessons on adapting leadership for complex product lines, optimizing compensation models, measuring what matters, and deeply embedding customer experience into revenue growth.

Key Discussion Points & Insights

1. Setting the Stage: Checkr’s Go-To-Market Complexity

• Checkr’s Business Model:
  • Late-stage Series E, background screening via API-driven platforms.
  • Originated with the gig economy (e.g., DoorDash was their first client) and later expanded to broader enterprises.
• Customer Segmentation & Sales Motions:
  • [06:01] Segments include PLG for SMBs, direct mid-market sales, enterprise sales, and large channel partnerships with platforms like Gusto and Greenhouse.
  • Sales Cycle Lengths:
    • SMB/PLG: Days
    • Mid-market: ~30 days, tens of thousands in deal size
    • Enterprise: Up to a year, $100k+ deals
• Usage-Based vs. Subscription Models:
  • [06:56] Lindsey: “We are usage based...getting that focus on consumption and revenue versus you’re not selling a subscription. Very different from a sales perspective, from a compensation perspective, and just from how we monetize.”

2. Lindsey’s Leadership Approach: First Steps as CRO

• Respecting History While Driving Change:
  • [10:09] Lindsey: “For me, it’s really important to honor the past when you start in a new organization and take time to really understand why things are the way they are. So trying to find that balance of not waiting too long to act and make change but also really understanding the why and how things are.”
• Key Early Observations:
  • Product and go-to-market feedback loops were weak.
  • Compensation plans often misaligned with revenue realization.
  • Data focus was lacking in key areas (bookings vs. revenue, customer activation).

3. RevOps and Data-Driven Decision-Making

• Leveraging Data to Find Opportunities:
  • Frequent review of revenue realization, not just bookings.
  • [16:35] Lindsey: “We measure month-two booking to revenue conversion...we set a goal of 10% and it was at like four, and we pushed and now it’s at 12.”
  • Introduced “average revenue per report run” as a Checkr-specific ARPU to align all teams’ focus.
• Book-to-Revenue Focus:
  • Introduced dashboards and KPIs at segment, team, and individual level to track bookings vs. actual revenue.

4. Realigning Sales Incentives to Drive Desired Outcomes

• Pitfalls of the Wrong Incentives:
  • Sales reps previously incentivized to maximize committed bookings, leading to over-discounting just to lock in “commits,” not actual usage.
  • [12:00 & 24:18] Lindsey: “We were incenting reps to heavily discount to get this commitment...they were unnecessarily giving these major discounts to get this committed contract with a customer because we were incenting it because there was a huge upfront commission component...what you incent you get.”
• New Incentive Structures:
  • Shifted all teams, including SMB and BDRs, to revenue-focused compensation, away from just logo or activation metrics.
  • [30:06] Lindsey: “We just shifted to the same thing for our SD...to give a component of the comp based on closed won as well...how do you get the right incentives to do the right behavior.”
  • Introduced spiffs (short-term incentives) for behaviors aligned with revenue realization.
  • Brought post-sales teams (CSMs, implementation, etc.) into the revenue realization loop.

5. Customer Experience as a Revenue Driver

• Onboarding and Activation:
  • Sales and solutions engineering now go deep on use-case fit before closing.
  • Single-threaded onboarding focus, reducing unnecessary handoffs and increasing urgency.
  • [31:08] Lindsey: “If the rep is incented on bookings, they’re probably not going to be as deeply ingrained in really understanding: is this solution going to work the way we need to have this customer go live and be successful and generate usage?”
• Continuous Customer Engagement & Feedback Loops:
  • CPO and engineering teams directly engaged with customers (“adopt-a-customer” program).
  • Customer-facing teams contribute directly to product roadmap through structured feedback.
  • [33:44] Lindsey: “There’s so much opportunity for upsell here. The feedback loop was just not getting to our product and engineering teams...if you’re going big in enterprise, that has to be completely interlocked and if you don’t have that you will absolutely fail.”

Notable Quotes & Memorable Moments

• [12:00 | On Incentives] Lindsey:
  “We were incenting reps to heavily discount to get this commitment...they were unnecessarily giving these major discounts to get this committed contract with a customer because we were incenting it because there was a huge upfront commission component. And like you said, what you incent you get.”
• [16:35 | On Leading Indicators for Usage-Based Revenue] Lindsey:
  “We measure month-two booking to revenue conversion...it was at like four and we pushed and now it’s at 12.”
• [30:06 | On SDR Incentives] Lindsey:
  “We just shifted to the same thing for our SD...to give a component of the comp based on closed won as well. There’s some pushback...but it’s that same thing, how do you get the right incentives to do the right behavior?”
• [31:08 | On Sales and Implementation] Lindsey:
  “Making sure that the pre sales team and our solutions engineers have signed off on something before it closes...because we were seeing not only if you’re overbooking a deal...it can also be bad for the customer if they’re expecting more and or there are product gaps.”
• [37:16 | On Customer Insight] Lindsey:
  “That insight you’re getting from day in and day out, talking to customers is gold for the company. And if there’s not a standardized way of capturing that, getting that is so important.”
• [40:20 | Closing Takeaway] Lindsey:
  “Get the data, know the data, and then obsess over your customer and their experience.”

Timestamps for Important Segments

• 03:45 — Introduction to Checkr, product, and early go-to-market strategy
• 06:56 — Usage-based model explanation, implications for sales incentives and compensation
• 10:09 — Lindsey’s “honor the past, act on the future” leadership approach
• 14:29 — The role of RevOps and data in identifying business opportunities
• 16:35 — Tracking and improving bookings-to-revenue conversion
• 24:01 — The dangers of overcommitting and over-discounting for the sake of bookings
• 30:06 — Shifting SDR/BDR compensation to closed-won revenue
• 31:08 — Enhancing customer onboarding and implementation
• 33:44 — Product feedback loops and integrating customer insight at the executive and product level
• 37:40 — Episode recap: data-driven leadership, incentive design, and customer experience obsession

Key Takeaways

For SaaS Executives and Teams:

• Usage-based revenue requires entirely different focus, data, and incentives than subscriptions.
  Shift go-to-market organizations—from top-of-funnel activity to incentives and comp—toward realized revenue, not just commitments or activations.

• Relentlessly measure what matters.
  Don’t rely on bookings—track revenue realization, cohort metrics, and customer-centric KPIs. Develop company-specific metrics (e.g., “average revenue per report run”) that align to business outcomes.

• Comp plans dictate behavior.
  If you want revenue, pay on revenue. If you want effective onboarding, measure and compensate for it. Always ensure incentives are tightly matched to real business health.

• Make customer insight company-wide, not just sales’ problem.
  Create structured feedback systems, directly engage execs and product with customers, and use that insight for prioritization and upsells.

• The first impression with the customer shapes lifetime value.
  Specialist onboarding, urgency, and pre-sales validation are critical for both happiness and revenue.

Episode Close

[40:20] Lindsey:
“Get the data, know the data, and then obsess over your customer and their experience. Thank you so much.”

This episode is essential listening for SaaS leaders grappling with consumption or usage-based models, or anyone working to better align sales and product with long-term customer value and revenue growth.