Saturday, January 26, 2013

Has The Time Come for Sales People to be Paid on Click Revenue?

In the world of MPS (Managed Print Service), commission for clicks is the common method pay compensation for reps.  Most time commissions are paid off the monthly revenue click from systems that our under a MPS agreement and in some cases commissions are paid one time for the first months worth of billing.

The copier commission world is a completely different story, reps are paid either paid on the percentage of gross profit or a percentage of the revenue for each copier that is sold.

Traditionally copier reps can also make commissions on the maintenance or cost per page agreement, the commissions range from 5%-10% of the annual agreement. In recent months I've heard some grumblings that dealers are pulling back and not offering commissions on maintenance agreements or cost per page programs.  Which I find surprising since maintenance and cost per page agreements are the life blood of the dealership.

If I were not getting a commission to sell a cost per page agreement or a maintenance agreement I would hard pressed to sell an agreement at the time of the sale.  Matter of fact, if I thought the break and fix model was better for the customer I would make the recommendation to go that way, my thought process is why muddy the waters and fight the battle with pricing on the maintenance or cost per page agreement if I'm not getting paid on that.

Personally, I would like to see some kind of ongoing

revenue stream for the reps in our industry.  We would be more inclined to place new systems that would increase clicks (which goes along with recommending a new solution that will increase clicks), and monitor our clicks (uh oh, XYZ Systems prints are down 10%, let's find out why).

Would 5% of the monthly or quarterly billing for each customer be too much to ask for?  I think not considering that a customer producing 120K prints per year would net the dealership about $1,300 annually. If the quarterly billing was $325 per, then the rep would be paid $16.25 for that account and the annual payout would be $65.

I'm thinking reps would be more inclined not to move from dealer to dealer because they could stand to lose a sizable portion of their revenue stream and would then need to start all over again, and we know what a drag that is.  But for the dealers that don't have a commission for click plan and a competing dealer does, well that maybe just enough incentive to break the camels back and you'll never have any long term reps.

Below is a poll from our Print4Pay Hotel members and it's evident that most reps are in favor of this type of compensation.

Has The Time Come for Sales People to be Paid on Click Revenue?

Here's how are P4P members responded:

79% Yes

13% No

8% Not Sure

8 out of 10 reps would like to be paid on click revenue. To me, commission for clicks, its the smart alternative to keep clients and good sales people on board for many years!

-=Good Selling=-

1 comment:

Jan Schmidtsdorff @schmidtsdorff said...

It is possible, It was part of the commission scheme in IKON Office Solution Denmark already 6-7 years ago.
Here all sales people had a commission based on how much the increased the number of service click they had on contract. It had a huge impact on IKON's service revenues.

I can only recommend taking this in as part of the commission scheme