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6 Strategies for Selling the Cloud
Partners and sales teams are entering uncharted territory in cloud computing. Here’s how to build a successful cloud practice.

Article


December 06, 2012 By Ken Thoreson

A recent survey of various partners who are focused on developing a cloud practice essentially confirmed what I’ve found with my consulting clients: Most partners are struggling to find their way and are 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 partners specific tactical tools to drive this transforming business.

The first decision you must make is why you want to enter the cloud. More than ever before, creating a solid business cloud practice plan that’s both strategic and tactical is critical.

We have advised our clients that, to succeed in building a cloud practice, they must increase lead volume, increase sales velocity, shorten the sales cycle and consider a vertical approach. We have created a prescriptive approach with specific tools and business guides to accelerate success in building a cloud practice. So here are 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, Reduce Cost of Sales
Some best practices we’re seeing include using inside telesales for the SMB 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 Website to sell your firm and your offerings.

Precision management is Critical
If you’ve been in the product business along with your software practice, 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 by finding a market, doing research on competition and regulations, determining the market size and opportunity, determining the market’s “business challenges,” calling 100 prospects to determine the market acceptance, interviewing 10 organizations and laying out an 18-month marketing plan. 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.

Enact Sales Compensation
If your practice in the cloud is strategic, 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.

About the author
Ken is a sales leadership guru; author of three highly successful books including the Sales Management Guru series, and popular blogger. He is also the founder and CEO of The Acumen Management Group, Ltd.
View all posts by Ken Thoreson
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