Everyone has their own idea on how to successfully transform a sales organization to achieve success. I’ve seen hundreds of attempts at transformation that were not successful, and they all shared one common element: the lack of a plan. Without a strategy, transformation fails.
The responsibility for a successful transformation is on the business owner, but often that responsibility is pushed off onto lower levels. Many attempts also fail because the “HOW TO” plan hasn’t been thought through or implemented. Still others believe that if you just throw managed services in the sales bag, it will sell.
Some manufacturers and NOC venders also believe that as well. But if it were that simple, you probably wouldn’t be reading this article. Just having the back-end capabilities doesn’t guarantee success. Someone still has to figure out who will sell it, how to sell it, who will buy it, how to make money at it and so on.
But first, you need to answer this: how do you properly merge managed services into an active sales organization? The destination should be well-defined and include a complete picture of what success would look like, both for the short and long term. Implementation involves the merging of two business models. It’s not just adding a product, so you must be crystal-clear on how things will proceed.
The Starting Point
What do I mean by the starting point? Successful transformation never happens without intent. You have to define what your company is today and what changes must happen to assure success for tomorrow. Every successful go-to-market plan begins with a true assessment of your company’s current capabilities. Without the assessment, you will most likely overlook segments of your plan that may contribute to a positive outcome.
Ten years ago, I started analyzing sales teams and made the discovery that not just any sales organization can effectively sell managed services. This is especially true for those that have historically sold hardware or equipment. Just because it’s thrown into the sales bag doesn’t mean they’ll know how to sell it or who to sell it to.
However, there are folks who don’t share this opinion. It’s difficult to achieve success in managed service sales if the underlying transactional business continually pulls their attention back to hardware.
If the majority of your sales team struggles to produce quota today (which is pretty common) and managed services are pushed onto your best hardware sales reps, watch out! Most companies count on their best reps to bring in today’s revenue, and if they’re pushed into managed services without a great plan (especially with the longer sales cycle) it may weaken the company’s current performance and inbound revenue stream.
I’ve witnessed this happen time and again. For example, an owner might believe they’re falling behind, so they quickly add managed services to their solution set because, after all, with someone handling the backend (i.e. NOC vendors) it makes it so easy and increases your competitive advantage, right? We also see the demand for managed services come from sales reps who believe that having more to sell will automatically make them more money.
Regardless of the reasons behind the decision to sell managed services, make sure that before you hit “GO” you’ve thought everything through.
Cash Flow During Your Transformation
A very common failure point for managed service transformation is when the new focus on managed services causes the legacy sales side to drop. Then, leadership demands a full-court press to get everyone back to closing legacy (hardware) sales, thus the failure to transform. Just like every plan, you need adequate funds to assure success.
A business can only go through a couple of failing months before everyone is so scared to try again that they give up. Many people try to prevent this by building a separate sales team for managed services, leaving the legacy reps focused on hardware. But just watch a managed service rep try to enter an account owned by a legacy rep: it’s not going to happen! Of course, you could split commissions on any managed service deal, but one side or the other is going to ask, “Why would I spend my time on anything paying half commission?” This is yet another failure point.
The Right Sales Team Model
You have to understand that times are changing and you’re NOT just adding more products to the sales bag—you’re changing the way your company goes to market. Isn’t it possible that as the decline of printing hardware continues, managed services could take the front position as your primary value to clients?
It starts with your company’s go-to-market plan, which defines the type of sales rep you want, how they’ll make money and what you expect from them. Test your current sales reps today by asking them to recite the “elevator pitch” they’ll use for managed services. This will be eye opening, and if you haven’t trained them to understand and present your value proposition for managed services, they’ll fail.
I think you’ll find that they’re more comfortable with sharing the value of their legacy products. Most sales reps don’t deliver (or understand for that matter) the value for managed services well. Whose fault is that? Even sales managers I’ve challenged with this have had a difficult time sharing the value of managed service deliverables. Why is that? Most likely, because they don’t have to know it!
The question remains, if your value proposition to the entire world is going to include or be centered on managed services (ultimately), you should design your sales team model to support that plan. It’s not an add-on service, it’s the future!
As you approach any new prospect, your top sales reps will need to completely understand and present your values to a higher-level target (mostly CFOs and owners). More importantly, they need to understand the target and be extremely comfortable articulating managed services’ value in the target’s language.
Sales reps who are not properly prepared to deliver high-value presentations are a big failure point. Most MFP reps don’t understand outsourcing at all and thus won’t be able to share the senior level values of managed services to a new prospect without proper preparation and training.
Accountability
Another common, completely avoidable set-up for failure is not setting requirements or quotas for managed service sales. In other words, the reps can survive without selling managed services. Where is the incentive?
We’ve all heard the expression “The tail wagging the dog” but this isn’t that. In this case, since the company has not fully committed to selling managed services, no one is committed. The reason sales reps ignore managed services is because they can! I’ve said it before, many sales reps are coin-operated, and if they can make enough coin on the easier legacy solutions, they will.
Sure, many owners will tell you they are in the managed services business. But the actual choice TO SELL or NOT TO SELL managed services is completely left up to the sales reps.
My question is, “Why would you build a plan to transform your company’s future that no one is expected to follow?”
