In the transition to Product-as-a-Service (PaaS), sales teams must embrace a shift from selling one-time products to selling long-term, recurring outcomes. This change can be challenging because it requires a new approach to how value is demonstrated to customers.
Salespeople are at the core of the PaaS transition. They need to believe in the long-term benefits of PaaS - not just for the business, but also for their clients. If they don't, the whole model will struggle to gain traction.
Embracing the PaaS model: A shift in mindset
One of the key challenges when adopting PaaS models is ensuring sales teams fully understand and embrace the shift from selling products to selling outcomes. Salespeople must see the value not just in the immediate sale, but in the long-term relationships with customers. This requires demonstrating that offering a service over time is just as profitable, if not more so, than a one-off sale.
A study from McKinsey found that companies that focus on their people’s performance are 4.2 times more likely to outperform their peers, realizing an average 30% higher revenue growth. When sales teams understand how their work contributes to business success, whether through customer retention, satisfaction, or recurring revenue, they’re more likely to embrace the PaaS model with confidence.
Aligning incentives to drive sales success
Another critical factor in ensuring the success of PaaS is adjusting the incentive structure to reflect the goals of the new business model. Salespeople won’t fully engage with a new model unless they see the financial rewards aligning with their efforts. If they are used to the rewards of one-time product sales, they need to know that their work in promoting a subscription-based or service-oriented model will benefit them in the same way - or better.
Incentive programs are a powerful tool in this process. A study by the Incentive Research Foundation found that incentive programs can increase employee performance by up to 44%.
Decathlon's journey: A case study in sales incentives
To see how this works in practice, let’s look at the experience of Decathlon, a company that successfully integrated a rental model for kids' bikes into their offerings.
In our podcast, Yann Carré from Decathlon shared some key insights from their journey:
"As a salesperson, I know that if you're not demonstrating the value you create for your clients, customers, teammates, and the organization, there's no future for what you're trying to develop. It will be too demanding and difficult."
One of Decathlon’s challenges was convincing salespeople to embrace the rental model for kids' bikes: €12 per month instead of a one-time €200 sale. Decathlon recognized that incentivizing their salespeople was necessary for the success of this new offering.
"If you tell a salesperson it’s better for them to rent bikes because it’s good for the planet and for customers, they’ll ask, ‘But will I make as much money as before?’" Carre explained. "You can’t ask them to be virtuous if they’re losing money."
By aligning their compensation plan with the success of the new model, Decathlon’s salespeople became motivated to promote rentals and circular economy products, knowing they would be rewarded for driving customer satisfaction and meeting long-term goals. This approach not only helped to integrate the new business model but also ensured that their salespeople were invested in the company’s success.
The key takeaway
To successfully implement a PaaS model, sales teams must be incentivized and measured in ways that align with the long-term nature of the model. This means tracking performance based on customer satisfaction, recurring revenue, and the success of ongoing service relationships, not just the number of one-time product sales. When businesses create systems and incentives that motivate sales teams to focus on these long-term outcomes, they create a framework for sustained growth.
Ultimately, salespeople must be able to answer three key questions to sell PaaS effectively: “Do I meet a real need? Am I satisfying my customer? Do I earn money?” If the answer to all three is yes, they will be motivated to sell the model.
Conclusion: The power of people
In the shift to Product-as-a-Service, one thing is clear: the success of the model hinges on the people behind it - especially the sales teams. Companies that focus on people’s performance are more likely to outperform their peers and achieve higher revenue growth. By aligning incentives with the desired outcomes of PaaS, companies can create a motivated, engaged salesforce that is focused on delivering value to customers.
At Black Winch, we recognize the vital role that sales teams play in the success of PaaS models. With over 20 years of experience in helping companies scale recurring revenue models, we know that aligning incentives, building clear performance metrics, and demonstrating the value of outcomes is key to driving adoption.
Ready to motivate your sales team? Let’s start the conversation.
