Forward by Leon Kharkhourin, CEO of Obero: We recently announced our partnership with Intangent, a leading sales performance consultancy, so we have invited Intangent President, Chris Wales, to share some insights from their research about the Subscription Economy and its impact on Incentive Compensation Management. As leaders in their space, they work with sales organizations to increase revenues, reduce costs, and contain risks through the planning, deployment, and management of their sales performance technology solutions.
As a Sales Performance Management consultancy, we’ve had the opportunity to work with many customers who were moving from a transactional business model to a subscription-based business model. It’s clear the success of subscription based businesses comes from the creation of strong customer relationships. However, traditional sales team have trained to focus on the immediate sale, not the life-long endeavor of earning, and keeping, a customer’s business. This means that businesses everywhere need to rethink their sales compensation models. We recently released our whitepaper, “Intangent Insights: Incentive Compensation Management and the Subscription Economy” which highlights the integral components of sales compensation for subscription based business and how this will impact everything from the data collected, the sales incentives, and a company’s revenue stream.
One topic covered in this whitepaper is the effect on incentives when moving to a subscription model. These are diverse, but the general trend is that the increased complexity of creating a profitable customer results in increased complexity of incentivizing the team. For example, with sales teams, incentives are traditionally tied to the value of the immediate transaction instead of the lifetime value of the customer. In the Subscription Economy, a balance should be struck with the sales team to consider both the immediacy of adding new customers and the service performance during the initial contract period. This helps to reinforce the concept that we are building a relationship with the customer and we must succeed as a team to be rewarded individually.
Success in a subscription economy is dependent on the entire organization adopting a more attentive selling approach that considers both the initiation of the relationship and the ongoing nurturing and maintenance of that customer. To continue the discussion, we teamed up with Obero to host a roundtable and discussion about Sales Performance Management in the Subscription Economy. If you’re in the Toronto area on June 13, join us at Bymark Restaurant. To learn more or register, click here.
To continue reading “Incentive Compensation Management and the Subscription Economy” click here to download the full paper.