It’s a given, these days, that cloud adoption is skyrocketing. According to Gartner, cloud spending is expected to reach $216 billion in 2020, up from $111 billion in 2016.1 So it makes sense that resellers want to capitalize on this lucrative opportunity. But before you rush in, make sure you create the right sales strategy. Otherwise, you won’t be able to grow a successful, sustainable cloud business.
This is easier said than done, of course, especially for the many resellers who built their businesses on the traditional product/transactional model, which is very different from recurring-revenue cloud models.
So what’s the best way to go about building highly effective cloud sales teams? Follow these best practices for planning, hiring, training, compensation and execution:
- Planning: Check your urge to rush into the cloud marketplace. The more upfront planning you do around sales, business and pricing models, the larger dividends you’ll reap down the road.
Your existing sales model could be an impediment to cloud and recurring revenue services sales. Organizations focused and incented on generating transactional revenue won’t alter their behavior in ways that allow recurring revenue sales to flourish. Sales management, sales professionals and sales support won’t be interested in anything that distracts them from achieving their income objectives.
Resellers that have successfully built cloud sales teams overwhelmingly say, don’t distract your performers. Keep them focused on driving legacy transaction-based revenue and go directly to a dedicated cloud sales model. Any other path tends to be a road to nowhere, or worse, it will disrupt your core business and could cause costly internal churn.
Develop a business plan that has cloud and recurring revenue as strategic priorities. To help accomplish this, answer the following question:
Will your strategy be focused on deriving recurring revenue from your existing customer base or will you secure net-new customers to ensure you don’t inadvertently corrupt your core pipeline?
Focusing on net-new customers is preferred. However, whatever you choose, the most important thing is to be committed and serious about adding a significant recurring revenue component to your business.
Pricing and Packaging
Put quality time into creating a cloud services pricing and packaging model that is meaningful. If you don’t, you won’t be able to derive the blended gross margins you need to support your business plan. The model should stem from your value proposition, market needs and your company’s expertise in meeting those needs.
Many companies hire mainly on “gut feeling,” but this isn’t scalable. Instead, develop a process of scoring applicants based on, for instance, prior success, intelligence, work ethic and coach-ability. And don’t be afraid to allow your cloud sales team to work remotely. It’s a great way to expand your team, but not your office space, allowing you to grow easily and at your own pace.
Train new hires in a consistent, measurable way. Don’t fall into the common trap where training is just shadowing someone who has tenure with your company. That can be a formula for failure if different hires shadow different employees and end up with completely different “lessons.”
The best cloud sales teams work for resellers that have comprehensive, repeatable training programs. If you are strapped for resources on how to get started, reach out to your cloud distributor to discuss their training curriculum programs.
And although it may be an anathema to some sales people, encourage peer mentoring. Ambition is great for pushing individuals to close sales, but you need a collaborative atmosphere to grow a cloud business.
First things first… Your sales team should be focused on selling solutions and making clients happy, not on figuring out complex compensation plans. Keep them simple. They should be easy to understand and, most importantly, easy to track and manage.
Check back on EDGE360 soon for a post dedicated to creating an effective compensation plan.
Consistency is key to ensuring your team is scalable – from hiring to actual on-the-job processes. Establish a best practice for what tends to work by analyzing your team and the data in your CRM. For instance, how often should you call a prospect per month? What is the right balance between quantity and quality?
While you can’t predict the future, a sales manager should be able to get a sense of what’s coming and how to prepare. To make this possible, make sure you use a CRM that fits your company’s reporting needs, whether Salesforce.com, SugarCRM, ContractWorld or another proven solution. Then, to ensure you have an accurate pipeline for forecasting, incentivize your sales team to use the CRM to its full potential.
There is no perfect one-size-fits-all approach to building a great reseller cloud sales team. Success requires a well-though-out, multi-pronged strategy that aligns with your business goals and is executed with passion. It will take you 12 to 24 months to cross the recurring revenue chasm and create a sustainable, blended mix that will enhance your business’ value. The sooner you start, the faster you’ll get there.
For more insights on these best practices, contact Westcon-Comstor at email@example.com or call Matt Karst at 303 704-8719.
1 Gartner “Market Insight: Cloud Shift — The Transition of IT Spending from Traditional Systems to Cloud” by Ed Anderson and Michael Warrilow, May 18, 2016