Creating RMR Culture Takes Time, Vision — Here’s How to Do It
You can’t just snap your fingers to fuel an RMR sales environment. Business guru Paul Boucherle explains how to get started.
Sales are the coal that fuels your business locomotive, or for the environmentally sensitive, the sunshine on your solar panel of revenue generation. But having the right sales talent, training and attitude to sell recurring monthly revenue (RMR) solutions vs. projects without RMR is as starkly different as those two energy resources.
Is there really that big of a difference; sales are sales, right? Not exactly. Several factors can impede your dream of a more consistent RMR stream that has fueled the growth of the security dealer segment for many generations.
Having made my selling bones early in my career with ADT, the measurement of success and sales commissions was built upon RMR and five-year agreements for services. It paid about 3x as much as what was termed an outright sale, which had no annual service revenues.
Outright sales with no monthly revenue were viewed as an inefficiency of a salesperson to sell the business value proposition of a fully serviced and maintained security system. Those that did not see the light sought other career paths.
Retool Team or Hire Anew for Service Sales?
Compensation plans can and do typically drive sales behavior, activities and ultimately results. However, this is neither a silver bullet nor a rudder that can be thrown in a different direction and expect the sales team to turn on a dime. Why? Because of the laws of sales physics with changing a sales team’s mental inertia.
Direction and motivation are really challenging. Companies that consult and train sales teams count on sales physics to stay in business, including a part of my business. To navigate the rough RMR seas, take the time to turn the ship and the entire crew around. This can take 12-18 months.
An alternative approach is to launch a squadron of PT boats served by a new sales team that learns the RMR culture from the ground up. This can take six-eight months. The advantage to a new sales team is you are teaching the right skills from the start, setting clear expectations for success, and not trying to help a veteran salty sailor team “unlearn” bad selling habits or teach successful old dogs new tricks.
I recommend letting successful sleeping sales dogs lie down. Don’t cannibalize their productive and profitable selling efforts simply because you want to move in a new direction.
What direction should you go and what questions should you ask yourself? That depends on your business goals, visions and ultimately your business exit plan. It is hard to step out of your business tornado to think, plan and reflect as an owner or manager, which is a key part of your role. The rest of your crew depends on your ability to proactively do that, and do it well!
Looking Ahead to Near & Long Term
How do you get started? By asking yourself the right questions in the right sequence. Here are a few questions we ask our clients when we help them do a WeatherReport, our approach to realistic business planning.
Have you updated your core values, company culture and vision? This step is certainly the first one and at times one of the most difficult for most owners to start with. The biggest hurdle is simply taking the first step to recognize that people want to follow a leader who has a vision, sets expectations, has some basic ground rules of how to play nice in your sandbox, and mandates what your customers can expect from the whole team. Many fall into the phraseology bear trap and opt for tired clichés that are only words and not backed up by actions.
Where do you want your business to be in three, five, 10 years? Creating a business vision can be overwhelming unless you break it down into smaller, more manageable steps and goals. Targeting those time frames allow a business owner to begin to ponder the really big, hairy question of “What is my exit strategy?” … which may or may not mean selling the business.
What strengths do you have to build upon to grow your business to meet three-, five-, 10-year visions and revenues? While focusing on knowing your strengths is very important, you must remain calmly objective in that analysis. Is what you think really a strength, or is it “how we have always done business” so it must be a strength, right? Maybe yes, but probably no. We often can get a bit myopic in our point of view. The real way to define a strength is through your customers’ eyes and the perception of value delivered. Ultimately, they decide if you are or are not strong. However, you could have the wrong type of customers!
These are initiatives that must be sold to your company. You, as an owner or manager, will have to lead by example and practice a management form of selling as a service (SaaS) if you want to continue servicing your customers! Next month we’ll have additional questions and insights on this topic.
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