We have worked with several clients where solution selling is (or is becoming) a priority. By “Solution Selling” you probably mean a sale that:
- Incorporates several product or service offerings tailored to meet the specific needs of the prospect
- Involves more than the individual sales lead including multiple specialists involved to match company capabilities to the needs of the prospect
- May be one of relatively few large sales closing in a quarter or year (the sales person is managing a small number of large opportunities, not a large number of small opportunities)
- Is a strategic buy for the prospect, with the opportunity to become more of a partner than a vendor over the long run
- Requires an understanding of both your company’s offerings and the business problems they solve, including the basis for an ROI type justification for the prospect’s investment
- Can be months or quarters in time to close (not weeks or months).
There are probably other characteristics that matter – but these are the hallmarks of the solution sale. The person executing this sale well is usually experienced, well-educated and highly compensated for an individual contributor sales person. They typically have a substantial base salary, with meaningful upside available when those large deals close. They also typically have significant influence over the profitability of the deal and/or the longer term relationship through a combination of pricing, product/deal configuration, and real value creation by matching capabilities with prospects’ needs. For this reason, they often are measured on deal profitability and/or account profitability. Typical plan design characteristics include:
- Quarterly payouts (vs. monthly) in recognition of the longer sales cycles
- Commission type plans (% of what is sold), as opposed to quota bonuses – because the deals are large and infrequent, so goal setting accuracy would be difficult
- Capped at a deal level (not in aggregate) at a very high payout, perhaps 1 to 2 times the base
- Profit/contribution measures (vs. bookings or revenue), perhaps in addition to bookings or revenue.
Donya Rose, CSCP, is Managing Principal of The Cygnal Group. She is a recognized expert in sales compensation plan design, regularly speaking at conferences and writing published articles. She serves clients from F500 to growth-stage businesses, and advises WorldatWork on sales compensation hot topics and best practices.