Mary Coxon leads partner marketing at ThinkOn, drawing on a B2B technology marketing career spanning enterprise software, IT distribution and mobility, and CRN named her a 2024 Women of the Channel honoree for strengthening ThinkOn’s partner programs, events and education.
If you want a business that is mostly recurring revenue, start by looking at how your sellers are paid. A seller who earns the most from a one-time hardware or project sale will keep selling hardware and projects, whatever the owner says the strategy is.
The pattern
In our conversations with MSPs, compensation is one of the clearest tells of how a business really runs. An owner can describe a recurring strategy with complete sincerity, and the sales team will still follow the paycheck. The plan on paper and the plan in the compensation sheet are two different plans, and the second one wins.
That matters because the numbers buyers and boards look at, such as recurring revenue concentration of 60% or more and retention above 90%, are the sum of thousands of small selling decisions. Compensation is where those decisions get made.
Three questions to ask about your own plan
- What do sellers earn on a one-time sale compared with a recurring one? If the one-time commission is larger and arrives sooner, the plan rewards the wrong thing.
- Is anything paid on retention? A seller who is paid only on the first sale has no reason to care whether the client stays.
- Does the plan pay on services, not just products? Cloud and backup services are recurring by nature, and a plan built around product margin can quietly discourage them.
What a recurring-friendly plan tends to include
- Commission tied to monthly recurring revenue, not only to first-year contract value.
- A component linked to client retention or renewal.
- Credit for adding a recurring service line to an existing client, not just winning a new logo.
- Paying on services as well as on products.
The right balance depends on your margins, your sales cycle and your team. Treat the list as a set of levers, not a formula.
Where ThinkOn helps
Every workload you place with ThinkOn is recurring revenue, not a one-time sale, so there is a natural recurring line for your sellers to sell. We usually start with a layer that touches your whole client base, such as an off-site immutable copy or data storage, and our team trains and supports you on customer engagements before any purchase orders are signed. You keep the client relationship, and your sellers keep selling what they want.
Let’s talk
Want to talk through how your compensation plan lines up with the service mix you want? Contact us and we’ll set up a call.
