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Compensation

The Fascinating Services Sales Compensation Mosaic

Recently, I asked our readers to tell us, in general terms, how their organizations handle services sales compensation. The early responses I received so far vary dramatically. If someone has thought of it, some company out there has adopted it. To be sure, best practices are clearly emerging. It’s the bad ones that make you wonder.

Leveraging the Service Organization for Incremental Sales

Can service delivery staff play an effective role in selling services? The answer, according to Chuck Kolkjen of The Sales Performance Group, is yes as long as you ask them to identify opportunities and make recommendations consistent with their role as the customers’ trusted experts. In most cases, don’t count on them to close sales.

The Making of HP’s Inside Sales Gold Mine

In 1999, Dave Akers won the President’s Quality Award at Hewlett-Packard for launching a services inside sales organization that delivered double-digit sales growth each year for several years. This is Dave’s story.

What is a Fair Split Between a Vendor and a Service Provider? Sheila Kelley's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Relevant Links The primary challenge that Intopia will face is to avoid being perceived as a competitor by their channel partners. This perception is somewhat unavoidable if Intopia has always been a pure product vendor and has not previously offered direct services. Conversely, if Intopia does not do something to supplement their partners’ solutions with more value-added services, they may be missing an opportunity to generate a positive service and support revenue stream.

What is a Fair Split Between a Vendor and a Service Provider? Bruce Jones' Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Relevant Links In situations such as this one, I always look for economies of scale across the entire value proposition. This determines whether we provide the services ourselves or partner with a provider on service delivery. In any event, I prefer to position my solution to command higher margins. To do that, I advise Mike Nasch at Intopia to look at the consulting and maintenance together.

What is a Fair Split Between a Vendor and a Service Provider? Randy Hudson's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Relevant Links Mike Nasch and Intopia may have unrealistic goals for increasing their service presence. Intopia’s service organization is an unknown startup with unknown capabilities. Failure to deliver on this deal can lead to a very negative service reputation. The potential also exists to damage the relationship with NetOps who may decide to partner with an Intopia competitor. Considering the limited breadth of its products, Intopia cannot build a sustainable services business around network components alone. Components are typically very reliable and are not maintenance intensive. The revenue is on the front and the back-end of the storage devices and the hosts.

What is a Fair Split Between a Vendor and a Service Provider?

A ServicesRevenue Business Case. Mike Nasch tries to hide his concerns as he listens to Jack Krantz tell him about a new deal Jack is in the process of closing. The deal includes a service package worth roughly $2.9 million over one year. Jack hopes to close the deal in the next 60 days. Mike is already worried about how his company Intopia and his service provider NetOps might split the work and the margin. He is dreading the negotiations with Jack. Jack Krantz is responsible for client relations at NetOps, a $450 million network services integrator. NetOps is a top-ten, value-added reseller of Intopia where Mike Nasch is vice president of sales.

How Do You Protect Value against Price Pressure? Carolyn Faehling's Perspective

This perspective addresses a challenge presented in a ServicesRevenue business case listed under Relevant Links I think Hans is on the right track. There’s some groundwork that must be laid to handle customer objections. A thorough examination of this situation may reveal alternatives and opportunities to turn it around.

Managing Parts’ Cost into a Powerful Incentive Program

Problems with parts logistics are typically blamed for poor field service, customer dissatisfaction and staggering financial losses. Not at IBM. The Personal and Printing Systems Division has turned the problem of controlling the runaway cost of parts into a clever pay-for-performance program that rewards channel partners.
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