Every cloud practice depends on sales for survival. With the IT market transitioning from project-based to cloud-based assignments, solution providers face the challenge of shifting their sales strategies and communicating the value-add of cloud to their customers. Adjusting to the transition means developing a tactically sound sales strategy to stay competitive in today’s IT market.
Last week we discussed the concerns of developing a solid cloud business strategy. Today, we explore the tenets of a tactically sound sales strategy by sharing important data from research firm IDC. The analyst firm recently completed a custom research project with successful solution providers to help uncover insight surrounding their successful cloud practices. We cover the salient points of their research in the following strategies:
- Capitalize on Cloud as a Door Opener
Cloud technology functions as a great entry-point for a conversation with prospective or current customer. Ongoing technology trends will drive customer interest and provide you the opportunity to lead the conversation, dispel misconceptions, and establish your cloud practice as a trusted advisor.
To facilitate cloud as a door opener for your practice, begin by asking the right questions and understand your customers’ needs. The direction of the conversation will be determined by their knowledge of cloud, whether they are a beginner or have been aware of cloud solutions for some time. You may find yourself, as research firm IDC did in their conversations with solution providers, choosing to propose hybrid solutions in the interim to assist with the transition. Getting that first deal is essential to landing more opportunities down the line.
- Recalibrate Sales Compensation Incentives
Compensating your sales force for cloud requires different approaches compared to traditional projects. Depending on the focus of your cloud practice, you may decide to encourage sales of specific solutions like software-as-a-service (SaaS) or infrastructure-as-a-service (IaaS). Furthermore, you may also consider altering how you compensate your sales associates. Some examples include:
- Paying a percentage of first-year revenue.
- Paying a trailer commission based on the recurring revenue that comes in after the first year of the contract.
- Emphasizing solutions – for example, changing the bonus triggers for cloud-based solutions versus on-premise projects.
While IDC’s conversations with solution providers showed no consensus on a sales compensation approach, the research firm did suggest that paying more compensation up front was an effective way to start.
- Leverage Ongoing Client Relationships
Finally, the transition to a recurring revenue model in cloud means that solution providers can reward their sales force for effectively managing ongoing client relationships. This can work for your organization if you designate someone to handle renewals and upsells as a “Customer Success Manager”. This role requires your company to stay in touch with the customer on a regular basis. Simply issuing an invoice is no longer acceptable, and the consequences of doing so will result in lost clients and revenue.
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