Recently, a VP of Customer Service friend asked me. “Should I pay my field technicians for selling service contracts?” I thought that it was a good question so we had a discussion about the topic. This post is about how the conversation played out.
In the high-tech service industry, there are two distinct camps about tasking and compensating field technicians to selling service contracts:
- On the one hand, customers consider the techs to be trusted advisers. Managers do not want to potentially diminish that relationship by turning them into sales people – or, as they say, “sending them to the dark side”.
- On the other hand, if the techs are trusted advisers and, the contract is valuable for a customer, then shouldn’t the techs make it easy for the customer to buy and, therefore, shouldn’t the tech make some money from her efforts?
Lets first look at the main points of each position.
Have The Field Technicians Selling
- Take advantage of the trust. The existing relationship with customers will grow orders.
- Everyone is motivated by money. Why not let the tech boost her income with no additional overhead costs to the company?
- In many organizations, there is friction between the sales and service organization. By having the techs selling, there will be opportunities for the sales and service team to work together, compare notes and generally share each other’s pains. This will help teardown silos!
- In many B2B sales situations, the sales person and the prospect never meet face-to-face. The field tech is the only real face of the company. Having the tech professionally selling will demonstrate a high level of competency across the boards and will make the customer more comfortable about his decision to go with your business.
Do Not Have The Field Technicians Selling
- The techs job is to fix the customers and her problem. Selling will always take a back seat to fixing.
- Money is not the real motivator of field techs. They get their internal satisfaction from taking care of their customer.
- Compensating them for selling will just add stress to their already stressful life.
- If you seriously sell contracts, you need a predictable outcome from your selling efforts. This requires a focus and process designed to maximize the outcome – orders! This won’t happen with the field staff.
- In many cases, having the techs sell really will diminish the level of the customer’s trust to the point that the customer may feel uncertain or abandoned and will seek an alternative supplier for her next purchase.
There are good points for each choice but what about a compromise?
Recommended Contract Selling Scheme
The following table summarizes my recommendation for compensating the various people in the selling process:
The best time to sell a contract is at the time of product sale. The customer “already has her checkbook open” and many companies like to buy a complete solution; the product and a multi-year contract. While the Sales person is doing all the selling, it is not unusual for someone from Service (I did this a lot) participating in the process. The Sales person should get full compensation for the whole order (remember the contract only gets the earned discounts and not the product discount level). The Service tag-a-long does this as part of the job and, if lucky, get a lunch paid by the Sales department. In my experience, the Sales team picked up the compensation but every year, however, at budget time, I always offered to include it in my budget. Our Sales VP realized that my offer was nice but the company did not need any more overhead, so all was good!
As soon as practical, the Service organization should engage a professional sales person. You get the full benefits of the focus and attention and, in fact, then have full control over your contract selling “destiny.” At various points in my career, I had two different types of Service sales people working for me; experienced service sales and sales people with no service experience. By hiring for attitude and training for skill, I was successful with both backgrounds.
As for the front line people, I recommend instituting an informal compensation scheme for providing leads. This should include:
- Private and public recognition
- The occasional “spiff” – A moderate amount of money in the form of a gift card always works.
At some point you may want to implement a formal system when the people get a fixed number of points based on the value of their recommendation. These points can be turned into gifts from a catalog, similar to what many companies do to recognize major employment anniversaries.
Whatever you decide, make sure there is no pressure from the organization to sell the contracts; the recognition and rewards will keep those inclined to sell contracts motivated and not annoy the good folks who are content satisfying your customers.
Look here if you liked this post to read more about service contracts.