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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 17 April, 2014, 18:59Be the first to give this comment the thumbs up 0 likes

Once I got over the disorientation of seeing a post like this on Finextra - rather than LinkedIn Technology Sales Group or somewhere else like that - I found it interesting. I strongly suspect that sales incentive policies inherited from the onpremise days are responsible for sales people being more excited about new customer acquisition. After all, with renewal revenue restricted to AMC @ 18-20% of the license fee collected upfront in Year 1, onpremise companies didn't want their A sales teams to chase renewals. In fact, I know many companies where the field sales organization is not even allowed to handle existing accounts.

With SaaS, things are totally different: There's no pot of gold at the end of the sales cycle rainbow. Renewals are worth everything. The vendor is perpetually in the sales mode. In my experience, most SaaS vendors are near-startups and don’t have a mature incentive policy. But, when they get there, they need to make sure that renewals are compensated as lucratively as signups. That’s a critical success factor for SaaS vendors.