Wednesday, November 19, 2008

Should a sales person get recognition for maintenance renewals ?

A friend works in sales for a well established company and he told me that he does not get recognition for maintenance renewals. Obviously he focuses on new business because that's he's job. The expectation is that maintenance income just comes in - but does it?

Is this really a good strategy ? Isn't a bird in the hand worth two in the bush !

Is this common practice out there ? Let me know what you think.


Anonymous said...

An absolute YES... This is part of account managment that is usually performed by the Sales Person as he's developed the relationship. Don't ever think that the relationship does not matter, it does. The sales person that does good account managment is why you continue to make money!

Anonymous said...

Sad that such a question even needs to be asked. The importance of the Sales Person to the customer cannot be overstated. To the (typical) customer that doesn't read blogs and articles and go to conferences relating to a product, and in the absense of a pervasive branding and advertising campaign, the Sales Person IS the company.

No matter what the top company officials are saying about their strategic direction and product strategy, if the Sales Person doesn't carry that message, it might as well not exist.

Anonymous said...

And if a customer DOES pay attention to what the top guys are saying in the press, but hears something different from the Sales Person, you're just holding the door open for the competition to knock you on credibility.

Adam Osborne said...

Hi John and Kevin,

I agree with you both. I think not giving recognition is insane. Getting new customers is significantly harder than keeping existing one. Why not do both.

Anonymous said...

There can be real problems associate with managing recurring compensation from maintenance. A salesman could put in a couple of good years of selling, and then essentially live on the recurring income for years. I think the answer should be that yes, it counts, but it doesn't count toward quota and the amount credited to the salesman declines over time unless he makes new sales in the same account.

Anonymous said...

Well I know IBM is following this strategy as well !!! We have sevral customers where IBM/Lotus is not doing anything about keeping them on Lotus Software. Instead they don't mind they migratoe to other platforms (Microsoft for instance). They are to much focused on new markets instead of keeping your current markets happy and build from there.