Compensation in a Subscription World Header Image

posted by Ian Pugh on Tuesday, November 20, 2018 in Unified Communications and IT Blog

As subscription and cloud models continue to dominate customers' buying behaviors, it’s become more difficult than ever to craft quota and compensation models that drive the required behaviors within your sales organizations.

As Unified Communications Providers and System Integrators selling professional Audio Visual, it’s critical that we focus on customers who either have existing premise solutions or prefer them, while incentivizing sales teams to promote and sell cloud-based solutions.  For Managed Service Providers (MSPs) the challenge is having a compensation model that also rewards product sales and standardization as well as monthly recurring revenue (MRR).

Crafting a Sales Compensation Plan for Recurring Revenue

On a daily basis we were asked by our partner community how to best craft a quota and compensation plan of the future.  We partnered with Mike Schmidtmann at Trans4mers to gain better understanding of the current state of quotas and compensation in the channel through a survey. With well over 100 responses, we’ve uncovered a few important revelations.

Top Five Compensation Key Findings

  1. Most compensation plans are too complicated. If you can’t explain it quickly, how can we expect a sales person to change their behavior?
  2. Too many companies are prepaying MRR commissions, which leads to cash challenges.
  3. Many partners have created sales roles that focus on MRR only.
  4. It’s tricky to have a compensation plan for both tenured sales team members as well as attract new ones.
  5. If recurring or cloud sales ramp too quickly, both partner and sales professionals’ income streams will be under serious pressure.

How to Provide Compensation and Set Quota for Recurring Revenue Webinar

The best part of our partner community and the survey is that we have uncovered some best practices on how to avoid the common compensation pitfalls of transitioning to a monthly recurring revenue model, thanks to the information you’ve shared.

To get insight into what your peers are doing, watch a recording of the webcast where we did a deep-dive with Mike Schmidtmann into the survey results and provided insight on how to build a compensation plan that will position you for growth in 2019.

Watch the Webinar Recording

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About The Author

Ian Pugh is the Director of Strategic Programs for the Unified Communications & IT Group at GreatAmerica Financial Services. Ian is responsible for the GreatAmerica UC and IT manufacturer programs strategy and serving as a liaison between GreatAmerica and the telecommunications industry, including manufacturers and service providers. Prior to GreatAmerica, Ian spent 15 years of experience in the leadership, sales and marketing roles at Gsolutionz Inc., a UC and collaboration provider in California.

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