It’s the biggest challenge facing managed service providers: How do you transition your sales force from transactional selling to managed services solution selling?
Here are the top 5 mistakes we’ve seen companies make during the transition to managed services, along with some corrective actions to get you back on course.
Of course, managed services sales are more complex than transaction selling. It requires a sales person to call on business stakeholders and articulate a solution to a business problem. Unfortunately, many computer / software sales reps are more comfortable selling product features to IT people. After working with dozens of VARS and their manufacturers in this area, we’ve come up with the top 5 rookie sales mistakes in the MSP market.
Mistake #1: Reps don’t call on the right senior decision makers:
Managed services are best sold to CFO or financial types as well as CIOs because the managed service value proposition resonates with this type of stakeholder. However, most reps in the channel today are only comfortable calling in IT Managers. One of the executives we work with said, “We have blue collar reps calling on blue collar stakeholders.”
Mistake #2: Reps don’t present the appropriate questions and value propositions:
Simply put, a CFO doesn’t care about the same things a CIO or IT manager cares about. Talking about cost savings to IT Managers doesn’t hit home at the same level as it does with a CFO. IT Managers will claim they care, but it’s not what keeps them up at night.
Mistake #3: Reps are not proactively seeking out customer business problems:
Instead, they mostly just react to customer requests. Most reps have relationships at the mid-level IT today and do not actively seek to understand the key business issues at their customers / prospects. Relying on IT to bring orders / new opportunities to the rep is a sure way to lose mind share or market share in an account. Reps need to be educated on what business problems might exist at their prospects / customers and how to probe for those issues.
Mistake #4: Many reps do not know how to effectively execute a first call with a senior decision maker:
In a recent study from LogicBay and STM 360, we found that top reps selling managed services closed 43% of their pipeline, while average performing reps closed less than 15%. We can track this success most prominently to what happened (or didn’t happen) in the first sales call. Top reps know how to “tee up” a successful sale cycle, while average reps don’t generate confidence in the decision makers and tend to “go along for the ride.”
Mistake #5: Rookies focus only on cost savings:
When getting an appointment, during the first call or throughout the sales process, rookies tend to focus only on the cost savings. While this is an important aspect of selling managed services, it typically doesn’t push senior decision makers over the edge in favor for your solution or perhaps any solution.
Reps need to determine what other decision criteria (service, security, etc) are important to the stakeholders. These decision criteria are often more important than potential cost savings.
In the weeks ahead, the “Al and Mike” guest blog will cover such topics as:
• How top reps analyze and attack their territory
• How top reps get in the door with senior decision makers
• How sales reps approach executive level sales
Guest blogger duo Al Rosenbaum is the EVP of Sales for LogicBay and Mike Stankus is the CEO and professional sales coach with STM360.
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Al and Mike - quick question on Mistake #1: I can understand why sales should target CFOs and CIOs in midsize and large businesses. But what about small businesses? I assume the target there is the small business owner?
I find that many of us tend to associate acts of consistency with persistent acts. No place is the difference between the two more telling than in establishing business relationships. Synonyms for the word “consistent” include reliable, steady, and dependable. Persistence according to the Thesaurus means relentless, pushy, and continual.
Would you rather be seen as pushy or reliable? I believe it is fair to say dependability yields greater returns than relentlessness. So then how can this understanding help you become more successful as a sales professional?
When establishing business relationships that yield sales, I am careful not to be seen as pushy. I do this by being available and present with the targeted individual. Depending on the specific situation, I make sure that I remain visible through telephone calls, emails, and informal “warm” calls. Over time a relationship develops that feels genuine because the prospect is never denied the opportunity to participate in the relationship as it unfolds.
A prospect I had tried to sell for two years finally gave me the time to make a full presentation, which resulted in a meaningful and profitable relationship. How was this accomplished? By being strategic in building something out of nothing, I cold called regularly. I left messages and product literature over a period of months. On one occasion where I had an appointment and was “stood-up”, I continued being available. Shortly, after that, I did succeed in having a lengthy conversation by telephone. By this time, the prospect had a feeling she knew me and could see I was reliable, professional and interested in moving into a business relationship with her.
We agreed to meet again, this time I committed to a no more than 30 minute meeting. During that meeting getting to the close was enhanced because we each felt we knew each other and a level of comfort with me and my products was made possible.
Sylvester: Your decision to be “consistent” (reliable, steady and dependable) vs. “persistent” (relentless, pushy, continual) is a subtle but important point.
But a quick question… Did you agree (or disagree) with any of the rookie mistakes that Al and Mike mentioned?
Joe, in answer to your question about who to target in small companies where a CFO or CIO is not present…sales reps most definitely should target the owner as they wear the many hats in the organization including the hat of the CFO. Good questions bring great clarity - thanks!
Great article!
In reference to Mistake #4…What do you see that is happening or not happening in that 28% difference between the top reps and average reps? What are your suggestions in making that improvement to effectively make that first call to make that leap from an average rep to a top rep? Thanks!
Ross, I’m not an MSP but I do work with them. I’d wager that what is happening to that lesser 28% is an expression of how to solve a technical problem rather than solving an actual or potential business problem. If you are doing a multi call close (an assumption I’m making that you aren’t trying to get them to sign on the very first time you meet) then the first step once you are in there is showing how you differ from your competition and how you solve or prevent a serious business issue for them (like data recovery after a hurricane/tornado). The other primary thing is getting to the pain point with them and seeing what keeps them up at night or otherwise creating the sense of urgency.
As someone not in tech that works with lots of tech companies I see enough acronyms to make my head spin sometimes. Any overly technical language and you lose the business owner. Platforms (for instance) shouldn’t necessarily be discussed but features and benefits and solutions resulting from your use of those platforms are what matters, especially for the SMB.
Hi Ross. Here’s the short answer to the differences between top performers and average performers on the first call.
1. Top performers establish credibility by talking with senior executives about topics that are relevant to them
2. Top performers establish rapport by asking the right questions that help understand the business drivers and then convey relevance to how managed services will help
3. Top performers build confidence by executing the first call with a specific and repeatable roadmap that works with calling on senior decision makers. These specific steps to the first call are:
-Establish rapport
-Set up the call
-Present the elevator pitch
-Ask targeted discovery questions
-Tie your solution to the prospect’s situation
-Close for the assessment
Stay tuned as we will be covering this topic in much greater detail in an upcoming blog and web-cast through mspmentor.net