You Aren’t Paying Your Salespeople Enough (to Drive RMR)
A boss I once had liked to joke that salespeople are coin operated. While that was perhaps a cynical viewpoint of the folks who ultimately kept him in a job, it’s true that salespeople go where the money is. (And why not? It’s how they’re paid.)
If you’re trying to build an RMR business, then, you need to pay your salespeople enough to sell RMR. But the fact is that most security integrators don’t.
Pay More on RMR Sales to Drive Growth
That’s not surprising. Until recently, the vast majority of access control sales were large, on-premise installation projects. Logically, sales commission structures rewarded this type of sale. The problem is that the commission structures that work for high-dollar installations don’t incentivize smaller-dollar recurring revenue sales. With a traditional commission structure, your salespeople will chase the $25,000 installation project over a $1,000 RMR sale every time, since their commission is higher for the same amount of legwork.
To grow your RMR, you need to change the way you pay out commissions. Paying higher commission rates for RMR than you do for hardware and installation is the best way to get your salespeople to pay attention to RMR over traditional sales.
The sample commission plan below shows potential rates to consider for each type of revenue your salespeople generate in an RMR environment.
In this example, salespeople receive twice the commission rate on recurring revenue as on installation. Fortunately, you can afford to pay higher commissions on RMR, since a dollar of RMR increases the valuation of your business 15 times as much as the same amount of revenue from hardware and installation.
Hire Salespeople Who “Get” RMR
What if you are incentivizing RMR correctly, but your RMR sales are still not growing as you’d like? It’s possible that you need different salespeople. Seasoned access control salespeople, who cut their teeth on on-prem installation sales, may have difficulty asking customer to pay every month.
We find that salespeople familiar with the subscription economy are often the best bet to sell access control RMR. Their familiarity may come either professionally from selling alarm systems or cell phones or personally through subscriptions to Netflix or Spotify. Often they are early in their careers.
If you’re looking to grow your RMR business, we can help. Check out our white paper, How to Increase Your RMR with Cloud Access Control.