You can throw in bells and whistles.
You can hype up flashy promotions.
You can lure in customers with the “hottest, can’t-miss, must-see, gotta have” offer.
Tips, advice, and long-term solutions on how to transition your business to an as-a-service model, and why it's beneficial to do so.
Part 1: Why Change Your Business Model? — analysis by CI editor Tom LeBlanc
Part 2: How to Plan for the Big Transition — analysis by CI editor-at-large Craig MacCormack
Part 3: Managing Cash Flow
Part 4: Adapting Your Sales Strategy
Part 5: Transitioning Your Existing Clients
Part 6: Business Process Automation
Part 7: How to Retain Clients
Check back for analysis of each section of the Ultimate Guide to As-a-Service to be released on CEPro.com
But ultimately, does anyone really understand the value of buying from your company?
After reading Part 4: Adapting Your Sales Strategy of ConnectWise’s The Ultimate Guide to As a Service, it became clear it is important to remember it is just as critical to sell the value of your company, not just the service.
Start by focusing on the sales presentation. Sure, you can generate “oohs” and “aahs” by pointing out the hardware’s features. Or, you can spend a whole meeting running through the spec sheet. (Who doesn’t enjoy reading a spec sheet?)
Here’s another approach, though. Adopt solution selling, an approach that highlights the total value of your company, from the system to the services to your staff’s knowledge to improve the client’s business.
While doing this, keep your ears open and pay attention to the questions and concerns of your client. Speak with them, not at them, to get a complete picture of how your services can help them. Look for examples for your industry peers on how they effectively make their presentations.
Along the way, be prepared to answer commonly asked questions. These three are posed often during managed sales service presentations: “How long am I paying for this?” “Can I just try this for 6 or 12 months?” “When do I own the hardware?” Prepare your responses in advance to be ready during the meeting.
Let’s fast forward to a successful sale. (Kudos, the presentation went well!) Now it’s time to pay out commission. If cutting a check at the front end of the sale puts a damper on your cash flow, there are ways to structure a new managed services sales commission compensation plan.
Think outside the box. You can optimize your commissions by being creative. For example, this chapter suggests paying a full commission up front in year one of a three-year agreement. Then, pay a residual commission over the last two years. Don’t think of highly-paid sales staff as a negative. Higher commission results from meeting their targets. Think of it as the more you are paying out in commission, they more they are securing in sales.
Implement extra incentive plans to close recurring revenue deals (these can be monthly) versus traditional sales. Note, you may need to consider a higher level of commission or managed service sales.
At the same time, don’t let your sales team get comfortable with the accomplishments of their last sale. This chapter points out they could take their foot off the gas once they have reached enough residual commission. Implement quotas or performance levels that make new sales a requirement.
Protect your profit margin by paying a percentage of gross profits instead of gross sales. On that note, you still can incentivize your sales staff through paying them a gross profit percentage in comparison to commissions being based on gross sales.
In the instance of renewals, these don’t have to be compensated as a new sale (especially if they are automatic renewals). But what if your sales team works on these renewals before they expire? Those who do could receive extra compensation.
Finally, take a look at your compensation plan and be open to revising it as you transition to managed services. See what is working, what isn’t and areas in which you could improve. Talk to other service providers about their approaches and seek out your sales team to get their feedback as well.