Managed Service Providers Rethink Sales Compensation Plans
Within the span of 30 minutes yesterday, three separate sources told me they’re expanding their managed services sales staff in order to lift recurring revenues during the recession. But in each case the story was the same: To fill new sales positions without breaking the bank, the MSP is offering lower base pay and increasing commission rates.
That’s an obvious pay-for-performance strategy. And in this economy, I think it’s a wise move — as long as you carefully consider a plan that energizes your new recruits without alienating your existing sales staff.
Growing Talent Pool
If we see major consolidation in the IT market (two examples: IBM’s potential buyout of Sun Microsystems, plus ongoing MSP industry consolidation), corporate sales teams will continue to take a hit — pushing more sales professionals onto the unemployment lines.
Plus, there are thousands of displaced sales pros from other markets (real estate, auto sales, and so on) who are looking for a fresh start. Surely, many of those talented folks will be willing to take lower base pay in return for higher commission rates.
The trick, however, is finding a compensation plan that doesn’t alienate your current sales team even as you try to find new recruits for new sales positions.