HANDCUFF YOUR EXECUTIVES' COMPENSATION TO SERVICES SUCCESS

by James "Alex" Alexander, Ed.D.
Is your organization having trouble getting serious about selling services? Try tying your executives’ compensation to services, and you will be happily amazed at the magic that happens.

Here is a quick client story to demonstrate this point.

YEAR ONE: WASTED OPPORTUNITIES
In Year One, the CEO got services religion. He told the organization that selling services, especially selling services contracts, was an absolutely critical, must-do, top priority for the business and that he expected each and every salesperson to sell services every chance they could. I don’t know for certain, but I think he felt that just hearing those words, coming from him, was enough to change behavior. However, the results were as expected: very little change and a year wasted.

YEAR TWO: FRUSTRATION AT THE HELM
In Year Two, the CEO took positive action by putting a senior member of his team in charge of the initiative, an individual who had solid success leading services within the industry. On his own, this hustling exec went directly to some key customers and sold several deals and demonstrated that it could be done. However, the overall percentage of customers under services contracts was under 30%, well below the desired 70% target the CEO had in mind. As you’d expect, the CEO’s frustration was growing.

YEAR THREE: MAGIC THROUGHOUT THE KINGDOM
I gave the CEO a short to-do list to lead the services transition, however, one action taken by the CEO was the prime driver of change: from that day forward, every executive’s bonus was based on reaching the company’s services goals. It was quite simple, easy to understand, and highly motivational--no services success, no bonus.

There is no silver bullet in building brilliant services, but linking executives’ compensation to services success is darn close!
James "Alex" Alexander is founder of Alexander Consulting, a management consultancy that helps product companies build brilliant service businesses. Contact him at 239-671-0740 or alex@alexanderstrategists.com.

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