Peer-To-Peer: MSP Comments On Selling Services, Compensating Sales Teams
Business Solutions interviewed John Gorst, chairman and CEO of InsynQ, for the article “Big Opportunities in Managed Services.” In the article, Gorst explained how InsynQ, a provider of cloud computing and application hosting services, helped lay the groundwork for one of its larger clients to begin to sell its own managed services applications.
With more VARs transitioning into MSPs, he also offered Business Solutions’ readers some advice on selling services. “The only real difference in the sales process is that you are selling hosted applications and services. You still have to do all the work on the back end. You still have to deal with end users and guide customers in terms of which IT services they can consume. It's not a lot different,” Gorst points out.
In the article, he shared tips for compensating and incentivizing his company’s sales team. “I’ve seen companies pay on the full contract or a percentage of the annual contract up front,” Gorst says. “We’ve modeled our own sales team on an annuity basis. They start at a higher base, because they’re not getting those big pops on commissions, but they are getting a percentage of that recurring revenue every month, which compounds. They build up an annuity base, and it takes a little while, but they climb up into six figures within 12 to 18 months.”
He adds, “We start our sales account executives at a higher base, because they don't get big fees up front on commissions. They do get a percentage of the recurring revenue every month, and they build up an annuity base.”
“It can be challenging to get the sales team on board, but there are a lot of different ways to approach it that can make it work,” Gorst says.