Not all dealers embrace a one-size-fits-all approach when it comes to incenting software and solutions sales. But every account representative has an overall number he/she must hit to fulfill their quota so that they can pack for that president’s club trip to Aruba or the Bahamas.
Regardless of whether a certain percentage of the overall pie is dictated to be software/solutions, dealers don’t want to leave money on the table due to a missed opportunity with, say, PaperCut or uniFLOW. Thus, as we wrap up this month’s State of the Industry report on software, we canvassed dealers to see how they incentivize their reps to focus on these solutions, which often require a longer selling cycle and may not be as lucrative dollar-wise as hardware brethren.
Time is the true enemy of solutions sales, as there is never enough of it to capitalize on all of the opportunities to leverage a dealer’s portfolio, notes Sean Bell, president of Solutions YES in Portland, Oregon. This bottleneck is somewhat mitigated by the advantage of having solutions experts on staff, eliminating the need to be overly fluent with any particular title or application.
“Solutions, if sold correctly, can enable sales to close deals quicker, so they can move on to helping another customer and close more transactions per month,” Bell said. “Our salespeople have one revenue target that can be met through selling solutions and hardware. We pay the same for [both].”
MRR Focus
Impact Networking of Lake Forest, Illinois, takes a packaged approach to incenting, with an eye toward generating five-year monthly recurring revenue deals. According to Brad Rozmarynowski, executive account manager and partner, reps are compensated directly on the value of a single monthly payment, which scales based on seniority (e.g., if an entry-level rep sells a five-year accord for $10,000 a month, the commission is $10,000).
While the dealer provides three- and four-year client engagements, the shorter-term pacts net the rep a percentage of commission: four years provides 80% of the commission that would’ve been realized on a five-year deal.
“There’s a good incentive for them to bring in the kind of business we want—large, recurring revenue over a longer term,” Rozmarynowski said. “We only track the total monthly recurring revenue that they bring in. How they do that doesn’t matter to Impact whatsoever; it could be from any services, software or hardware maintenance. We have clients that will buy document management, IT services, security and print management all on a single contract together. So it’s very powerful stuff.”
An aggressive approach is required when it comes to incenting reps on solutions, even when the margin of revenue isn’t substantial. Otherwise, it will be difficult for the dealer to realize the growth it seeks, according to Dustin Bonn, solutions sales director for St. Cloud, Minnesota-based Marco.
“If you pay your sales team right away for any software sale they make, they will make another and another,” Bonn said. “Your business will reap the rewards three to five years from now, gaining recurring revenue without recurring expenses.
“Whenever possible, we try to coordinate customer incentives, aggressive marketing, and accelerated compensation to drive a surge in revenue. It works very well. The hardest part for us is aligning sales leadership around what product or service to focus on at any given time.”
Solutions Selling
Like many dealers, sales reps for The Swenson Group of Livermore, California, have a hardware and software quota. President Dean Swenson believes the key is stressing the importance of not going into a prospecting call with an agenda. Selling to a pain point entails listening for the keywords a prospect may utter that should dictate the course of a conversation. Very few clients will talk about poor color quality with a given MFP, but they will share a lack of satisfaction with an incumbent provider’s service performance.
“When you can change the conversation from speeds, feeds and price to we can help you with your challenges, our winning percentage increases significantly,” Swenson said. “Reps will buy into the fact that the revenue is going to increase, profit will improve, and that it enhances the stickiness of the relationship. That’s when we become more of a partner than a vendor.”
It also requires patience on the reps’ behalf, as the solutions side of a deal can often place a drag on writing up the order. But engaging the IT or solutions experts will ultimately make for a more lucrative deal. Swenson pointed to a takedown with a health care client where a compliance software component added $100,000 to the overall take.
“Our model is to uncover pain and problems,” he said. “When we make a commitment to solving that problem, we bring value and that breeds trust. Our whole goal is to reach the partnership level, but it doesn’t happen overnight.”
The best path to ensure reps are adding a degree of focus to software/solutions is to make it a part of their quota and the president’s club trip incentive. For Frontier Business Products of Aurora, Colorado, it also involved a transition in the sales process that allowed for solutions to take front and center in client/prospect engagements, according to Scott Schnabel, chief operating officer. Constant support from a solutions specialist who provides ongoing and relevant training can help reinforce the dealer’s goals.
“Comp programs and quotas definitely dictate behavior,” Schnabel said. “When a trip to Honolulu is on the line and the rep is getting close [to qualifying], there seems to be a tremendous focus on some of those [solutions] buckets. They want to achieve that network services or software number. It will drive the behavior for those who are close.”
Setting Foundation
When a dealer employs a collaborative sales process that involves subject-matter experts for every discipline (solutions, MPS, production, etc.), accounts executives are more comfortable than ever in introducing solutions to client discussions, notes Justin Drabouski, director of managed services for Fraser Advanced Information Systems of West Reading, Pennsylvania. Its leadership team maintains that the way to create stickiness with customers is to be a valued partner that solves challenges as opposed to merely a copier leaser.
“With the implementation of our project management group, solutions implementation and service have become standard procedures,” Drabouski said. “Most dealers in our area don’t have the capabilities of our project management team that walks clients through projects every step of the way. This has truly redefined our processes with installations and the client experience.”
