In a previous blog, I detailed a process to help resellers add cloud services to their portfolios. As a reminder, this process works for VARs who are just starting to sell subscription-based services as well as MSPs that are looking to expand their portfolios, and it’s based on years’ of experience working with thousands of partners. The five-step process addresses the challenges and pitfalls that can stall your cloud services business efforts, and it includes the following:
- Financial Plan
- Solution Plan
- Operational Plan
- Marketing Plan
- Sales Training Plan
Links to my earlier blogs...
- Fiancial Planning: If you missed the first part of this three-part series, which focused on developing a financial plan for your cloud solution as well as the specific solution (and complementary professional and managed services you should bundle with it), you can find it here.
- Operational Planning: Additionally, if you missed the second part of the series, which focused on the details of building a solid operational plan, you can find that article here. For the final article in the series, we’ll focus on the marketing and sales training plans, two important pillars designed to build on the foundation already established with the previous three phases.
Onto Sales and Marketing
Now that you have financial, solution, and operational plans, it’s time to market these to potential new and existing clients so you can set up your sales team to start winning the deals. As intuitive as it may sounds, many resellers rely on word of mouth marketing, also known as no marketing at all. Research shows that more than 70% of cloud purchasing decisions are made by functional leaders in the front office, and often times, they make these decisions without consulting their IT department, which is where most resellers have strong relationships. If these new front office decision makers don’t know you and therefore don’t view you as a trusted source for cloud solutions, you will be left out of the buying process. You need to market and tell the world you’re in the cloud!
Build A Metrics-Based Marketing Plan
Marketing can be an intimidating topic for many resellers, whose comfort levels dwindle the moment the topic moves away from IT. Breaking down your marketing plan into smaller, more manageable steps is the best way to overcome this fear. Here is an outline you can use to build a successful marketing program:
1. Design your marketing plan. The primary role of marketing is to set up the sales team with warm leads, so they aren’t wasting time chasing leads that aren’t a fit for your business and/or aren’t looking to buy any time soon. With that in mind, think about the kinds of leads you’re looking for and the different types of activities you could do to attract those leads. List specific marketing activities (e.g. webinar, email campaign, customer survey, lunch and learn) you’re considering, plus the cost of the event and the number of leads you expect to generate.
Before you can plug in accurate figures, you’ll need to know two things: How many leads do you need per month and what is your lead conversion rate? If you’re not sure about your conversion rate, assume it is 10%, which is the industry average. To answer the other question, you’ll need to know your average contract value. For example, if your average customer is a 100-person shop and your solution costs $10 per seat, then the average contract value would be $1,000. If you need to sell 10 new solutions per month, then you’ll need to generate 100 leads a month.
2. Determine your funding sources and budget. Once you add up all the costs of the activities that will help you meet your lead goals, you’ll need to determine how your costs align with your budget. Typically, the money you need for your marketing plan will be more than what your available budget allows. Don’t assume that means you need to compromise your marketing plans; there are other options you should consider first. Your vendor and/or aggregator partners may have marketing coop funds available. Having a detailed marketing plan is an important first step to be considered for any available funds. The plan I’ve been describing to you is part of Ingram Micro’s Seeding the Cloud program, which is a sales and marketing tool designed to help VARs and MSPs build and track their marketing and sales activities. Your vendor/aggregator partner may offer similar tools and programs.
3. Manage the execution of your plan. One of the main reasons you should track the details of your marketing plan is to help you make intelligent updates over time. For example, maybe after a couple of months you discover that one type of marketing activity is outperforming all the others. Take the opportunity to assess what’s working and what’s not and make adjustments accordingly. With enough data points, it becomes much easier to identify areas that need to be addressed.
Don’t Neglect Sales Training
Even if you’ve done everything right up to this point, failing to prepare your salespeople will greatly hinder your success. You must take the time to train your salespeople and ensure these three areas are addressed:
1. Engage the front office decision makers. As mentioned earlier, the vast majority of decision makers for cloud solutions are now the business leaders in the front offices, not the IT people in the back. Your salespeople need to learn how to build new relationships, and adjust their strategies and pitches to influence these new decision makers. The most important message you can instill into your sales force is that selling cloud is not about technology (i.e. fault tolerant SSAE 16 accredited data centers), it’s about improving business processes (i.e. securely accessing your business applications anywhere in the world).
2. Explain the solution. Even though salespeople should lose a lot of the techno speak when engaging potential cloud buyers, they still need to be able to explain how a solution works and articulate the important details regarding how it will be provisioned and any significant changes required by the client. In some cases it may be necessary to bring in an operations person to help with demonstrations and answering onboarding-related questions.
3. Schedule regular follow-ups. One of the biggest mistakes salespeople make when selling cloud solutions is that they lose contact with a client after the initial implementation. The most successful cloud service resellers schedule QBRs (quarterly business reviews), which allow them to keep in regular contact with all the decision makers and make sure things are running smoothly with the technology and the billing. QBRs are also a great way to uncover upsell opportunities with your client.
Some analysts have shared some alarming statistics about salespeople not being able to make the transition to selling cloud services and a few have even go so far as saying you’re going to have to fire most of your sales staff if you want to make the transition to selling cloud services. My experience has shown me that if you have the right solution available at a competitive price and your salespeople are properly trained and incentivized, most of them can make this transition. Following the steps I’ve outlined in this three-part series will help further ensure those odds are stacked in your favor.
Jason Bystrak is director of Sales for the Services division of Ingram Micro North America. Guest blogs such as this one are part of The VAR Guy's Business Acceleration InfoCenter.