Seeing how Managed Print Services is a subset of the wider movement toward Managed Services, Doc wondered how you develop compensation plans for the sales people in this growing field. Luckily, I found a great article by Phil La Forge which outlines a "Really Simple Sales Compensation Plan for MSPs."
I have always thought that the most effective commission plans err on the side of very simple. To co-opt the contemporary phrase, the plan should be clear enough for a fifth grader to grasp. No algorithms, statistics or complex math of any kind. We want our sales team focused on selling our solutions and making customers happy, not doing linear regressions on an HP-12C. Addition and multiplication with dollar signs attached are the only mathematics inside a Really Simple Sales Plan.
So let's start with the basics. What types of behavior should a Really Simple Sales Plan drive? We want to incent behavior that drives the valuation of my MSP business through the roof – behaviors that build the financial multiples that bankers and buyers use as yardsticks to determine purchase price.
1. Revenue Generation: The most obvious. We want our sales pros to fuel recurring revenue growth by closing new logo business on long-term annuity type MSP contracts. 2. Stickiness: We want our sales pros looking for upsells into their install base – while NOT losing the hunger for new customer conquests. 3. Profit Generation: We want our sales pros to drive profit by selling the service types with the highest gross profit margins on board. 4. Strategy Alignment: We want our sales pros aggressively selling new services that are solidly aligned with our product direction. 5. Satisfaction: We want our sales pros acting with integrity – doing what's right – to help create a delighted customer experience.
Phil gives a detailed example of a sales plan that follows his guidelines. It's an interesting read especially if you are in MPS management.