Cloud Computing and Strategic Sales Management
Partners and sales teams are entering uncharted territory in cloud computing. Here are six tips for building a successful cloud practice.
- By Ken Thoreson
- June 01, 2011
Recently we surveyed a variety of Microsoft partners who are focused on developing a cloud practice. The results essentially confirmed what I've found with my consulting clients: Most partners are simply struggling to find their way and are partly cloudy on the approach to leading their sales teams. There has been a lot of marketing noise about the cloud: its impact on the market, what segments to attack and its impact on the partner business model. Very little has been done to deliver to Microsoft partners specific tactical tools to drive this transforming business.
Microsoft's marketing teams have advised that, to succeed, partners must increase lead volume, increase sales velocity, shorten the sales cycle and consider a vertical approach. However, it's left to the partners to figure it out. So this month I'd like to share some detailed suggestions for building a successful cloud practice.
- Create a Practice Statement. This simple process of asking some internal questions will improve your focus. What products and services do you offer? What markets do you serve? What benefits will customers achieve? What makes you unique? What after-the-sale services do you offer?
- Shorten Your Sales Cycle and Reduce Cost of Sales. Some best practices we're seeing include using inside telesales for the SMB/Business Productivity Online Suite (BPOS) market; no more than a three-step sales process by compacting multiple steps into one event; and Web conferencing tools such as Live Meeting and your Web site to sell your firm and your offerings.
- Precision Management Is Critical. If you've been in the product business along with your Microsoft practice, then you understand margin management. Build a sales, marketing and operations dashboard specifically for your cloud practice. Create goals and track results for gross profit, leads from each marketing source, number of sales calls per week, quotes per week and seats sold per month.
- Go Vertical! Analyze your existing customer base and determine if you already have a certain level of expertise within a market that you can leverage. Every partner should have at least one vertical offering: your marketing costs will go down, your cost of sales will be reduced and your revenues will grow. In fact, I believe you can triple your sales in three years with a vertical approach. Here's how: Find a market, do research on competition and regulations, determine the market size and opportunity, determine the market's "business challenges," call 100 prospects to determine the market acceptance, interview 10 organizations and lay out an 18-month marketing plan. In past columns and my blog I've written extensively on this topic. My main rule is: Become a member of -- not a vendor to -- the market. Going vertical is as much of a philosophical change as a business change.
- Fix the Funnel. Develop a marketing funnel that's designed to properly feed your sales funnel. You need to know the metrics of each stage of your sales funnel, such as the number of opportunities and dollars required to exceed your monthly sales objectives, the number of ideal clients/prospects in your marketing funnel, the number of campaigns per quarter you need to run (double the number you're doing today for a cloud practice) and the number of leads required from marketing each month to enter your sales funnel.
- Sales Compensation. If your practice in the cloud is strategic, then consider a compensation plan that's based on the annual revenues off the recurring revenues and build a quarter-to-date cloud revenue per seat goal. When those numbers are exceeded, pay a flat bonus amount. If the client is a net new, pay an additional bonus commission on all other sales to that client for the first 12 months.
But the first decision you must make is why you want to enter the cloud.
More than ever before, creating a solid business plan that's both strategic and tactical is critical.
Next Time: Look for Thoreson's Next Column in August
Ken Thoreson is managing director of the Acumen Management Group Ltd., a North American consulting organization focused on improving sales management functions within growing and transitional organizations. You can reach him at [email protected].