Monday, March 18, 2013

Exploring Services


One of the most common mistakes that I see in service organizations s that they mix sales and billings together. I applaud those services organizations hat understand that selling is a profession and which have put in place sales people with targets – well done. Unfortunately, many of them link sales targets to billings – revenue. Billings are linked to delivery – and sales people don’t deliver. Why set them targets, therefore, for something over which they have no control? A service organizations delivering consultancy will have a project manager who controls when the service is delivered. They are the ones responsible to the client for delivery. In most cases they will also be responsible for the billing. So why would you set the sales guy a billing target? It’s mad. You end up having two people looking at delivery and, while the sales guy is pestering the project manager about billings, he is obviously not out looking for the new business necessary to create the work required to keep the consultants in work. High utilization of consultants brings high billings. Service organizations need to make sure their sales people are set targets on contract value only. Don’t link their commission to billings. Do this and their focus will be on what they do best – bringing in new business.