What is the number-one reason that security integrators succeed in growing recurring revenue? I have asked this question in front of more than 2,400 people over the last three years and no one has answered correctly — not a single person.
As you are pondering the right answer, let me clarify my meaning of a “security integrator.” I mean a company that sells, installs and services advanced security systems; a company that sells large projects at a high dollar amount — one composed of salespeople that succeed by solving problems for their customers, not by knocking on more doors than their competition. You know these types of businesses — they are usually very knowledgeable and successful companies. Unfortunately, however, many of these companies have built their business around winning large projects but have little recurring revenue to show for it.
Have you come up with the right answer? The number-one reason security integrators succeed in selling recurring revenue is because their leadership holds the sales team accountable to the activity and performance that leads to recurring revenue. While changing the compensation plan, delivering sales training and offering excellent services are all important, coaching and accountability by leadership is the primary factor that influences salespeople to sell these services.
So, what can you do? With your crazy schedule and limited resources, how can you add “coaching and holding my salespeople accountable to RMR performance” to your schedule? Below are four ideas for a security integrator sales leader or owner that will help you coach and hold your sales team accountable for increasing their recurring revenue sales, along with action items to help you get them accomplished:
1. Develop the right metrics and goals.
Everyone has metrics and key performance indicators that are measured; however, many of you do not track activity or performance related to growing recurring revenue. You track metrics that lead to project sales and you are probably doing pretty well selling projects; so why aren’t you tracking activity that leads to RMR? Many owners and managers don’t really think about it or know where to start.
What are the right metrics for RMR? It can be as simple as tracking the amount of recurring revenue that has been sold and quoted. You can also track the amount of each service, such as managed access control, hosted video, maintenance agreements, etc.
What are the right goals for each metric? If these goals are not realistic and meaningful, then they will not be effective. Use historical data to help you determine how much each metric’s goal should be. If you have the data, break the goals down to being unique for each person. Some people will be strong at gaining interest for a quote, while others will be strong at closing. Understanding these ratios and breaking it down for each person is a powerful act; however, make sure it is not a project that takes weeks to put together. If necessary, wait a year or so to get the right data.
Action Items:
- Determine two to three metrics that will help you predict the RMR sales performance of each salesperson on your team.
- Using historical data, calculate the right goals for each metric as a function of the overall quota.
- If you have the data, break these calculations down to each person. Some will have higher goals for outstanding quotes than others, depending on whether they’re strong closers or prospectors or both.
2. Make the reporting easy.
While there are many reasons you might not be tracking metrics that lead to recurring revenue, it is mostly because you are overwhelmed and wearing a dozen hats. So are your salespeople — most of them have to balance prospecting, networking, managing current customers, putting out fires, etc.
Both of you are too busy to have to consider a complex reporting system. Make this process easy for you and for your salespeople.
Action Items:
- Make sure the reporting required of salespeople is reasonable. Ideally, the reporting on this activity is merely an output of meaningful activity by the salespeople. If you don’t have a system in place that allows you to track opportunities, then invest in one. If that’s not an option, then create a mechanism that keeps the salesperson from being in front of a Word document for three hours per week, which is unreasonable and ineffective.
- Make sure the reporting process is easy for you (management). If you have to spend six hours every Saturday merging several documents and doing the math manually, you have to stop. Devise a process or mechanism to help you bring together all the data in one easy format. If you are spending more than 30 minutes per week generating reports from your sales team’s activity, then you need to change your system.
3. Create a company-wide buzz about RMR.
The best way that leadership can hold their teams accountable to any goal is to create a culture in which the entire organization is holding each other accountable. Think about some of the most effective sports teams and their culture — it is not just the head coach that is holding the players accountable, the players on the great teams hold each other accountable as well. It is the same with RMR; in fact, it is even more important because most of you have a culture of selling systems and projects, not services. To shift that mentality, there needs to be a company-wide buzz about RMR.
What does that look like? Scenario: A salesperson returns to the office with an order for a $90,000 access control project with a key customer that she just stole from your biggest competitor. How does your organization react?
a) Ecstatic because of the $90k order.
b) Happy because you won a new customer from your competition.
c) After congratulating the salesperson, she is asked how much RMR was included.
For most, the answer is either (a) or (b). If you really want to hold your salespeople accountable to selling recurring revenue, then (c) has to be included somewhere. You must drive a culture throughout the organization that RMR is critical to the success and mission of your business.
Action Items:
- In your next company-wide meeting, devote the entire time to your initiative of growing your RMR (assuming that you have defined this initiative). Ask the whole company for help. Let them know why it is important to your business and to them.
- Post the RMR metrics around the office. I love the idea of posting a scoreboard of individual performance. If you are not comfortable with this idea, then post the team performance against the previous month or year.
- Always ask about RMR —make it a primary point of discussion in every sales meeting or one-on-one discussion.
- When a salesperson or the team hits a milestone (e.g. $100k of new annual recurring revenue for the current year), throw a celebration for the whole company. It can be as simple as a pizza party or limited happy hour at the office. Allow everyone to benefit from these wins.
4. Coach each person, don’t simply manage the team.
If you ask anyone that has succeeded in any venture, they will likely talk about one person who helped them. One person who coached them. One person who rolled up their sleeves and worked with them to make them better. If you want your team to increase their sales of RMR, then you need to work with each individual.
It might seem daunting to add one-on-one meetings to your weekly schedule, but you can make it work. Below are some ideas to shifting from team management to individual coaching.
Action Items:
- Reduce your team meeting frequency to monthly. Many of you have weekly sales team meetings. During your next meeting, look around the room and observe the team’s engagement level — what do you need to talk about every week that can’t be covered in a monthly meeting or in other settings? Most weekly sales meetings are catch-all sessions and pipeline review discussions that leave 80 percent or more of the audience bored. Reduce these to monthly and you will have a very happy sales team that will be more engaged in the sales meetings.
- Schedule one-on-one meetings at the preferred frequency per sales person. Each of your salespeople are different. Set your meetings according their individual needs. Of course, you will have to work with them on the frequency or you may end up meeting with a few twice a year and a few twice a day. There is a happy median in the middle.
- Include RMR activity and performance as an agenda item. Dig into the data. Don’t just say: “you’ve got to get those numbers up for hosted video.” Roll up your sleeves, turn off your phone, and use the best four words in sales leadership: “let’s figure it out.”
Chris Peterson is the founder and president of Vector Firm (www.vectorfirm.com), a sales consulting and training company built specifically for the security industry. This article is the fourth in a series on RMR sales tactics. Visit www.securityinfowatch.com/ and consult the related content to access the previous articles.
