We experienced a transformation from On Premise (I’m told the correct grammar is On Premises but the US description which seemed to stick) to cloud often called (SaaS) or Software as a service. So what do I know? Well I was at a major US Corporation and we made a number of mistakes, but let me walk you through the highs and lows I can think of as I travel into London on the train.
- Buy in from the top – I know you know this, we all know this but knowing and doing are two different things. There has to be all of the leaders standing up and clearly stating the direction of travel. This would normally be at a kick off. You could also get an outside speaker in to emphasise the point. We had our VP of sales present the new “first meeting excellence” white board (more on this in a bit) at a sales kick off. On the basis that if they can do it, the sales force can start doing it too. Don’t forget to do the same for the channel partners.
- Compensation – There has to be a clear compensation package for sales people and the partners. We joke that sales people are “coin operated” and they are. There has to be a simple and differentiated compensation scheme.
At this point, it’s worth saying that taking the current processes and making them cloud. You have an opportunity to do what we did and rip up all the current process and implement something new.
- One of the problems you will find is that telling people that they sell cloud isn’t enough, this is a change program which requires changes in habit and changes in mindset. People have a comfort zone and will stick to it. You have to provide the deal support and compensation support for the new strategy. Putting it bluntly, people have to be paid more to follow your new strategy. Compensation drives behaviour.
- Moving to a SaaS (Software as a Service) model requires people to understand a new common language, such as ARR (annual recurring revenue). There has to be clear understanding if I sell $1 million on premise deal, what I get paid vs what I get paid if I sell a $250K ARR deal.
- The first thing the sales people will do is sell both, on premise and SaaS this doubles all your efforts from a sales and pre-sales prospective. As there is only so much business you can transact, this halves your pipeline. At this point the Leadership have to step up and reconfirm that strategy that is Cloud.
- At this point you will get pressure on your sales process as the deal velocity will speed up. This won’t suite all the sales people. While you can balance that deals (and targets) are smaller (but probably not from a compensation prospective). We had a sales force that was used to 18 month sales cycles, we took on a sales person from a competitor and found they closed at the first meeting. When we looked at sales cycles they had dropped from 18 months, to 6 months to 6 weeks in a matter of months from this competitive pressure.
- It was under this competitive pressure that we created a “first meeting excellence” that very soon turned into a “white board” and all sales people got an iPad to do a demo at that first meeting. We certified the sales force and 40% didn’t make the grade.
- It may sounds strange but sales people that were used to a 18 month sales cycle had lost the ability to close. The white board got people to close at the first meeting.
- Back to the sales cycles, deals got stuck in IT as they realised that with Cloud responsibility for IT was slowly slipping to the suppliers. Why would “turkeys vote for Christmas”. While many of these companies had Salesforce, Workday etc, IT refused to believe they had cloud in the house. We ended up recruiting an “cloud architecture” team that could answer all the questions about data centres, where the data is, what happens if somebody technical has a heart attack amongst the racks etc.
- In the new age of Cloud, you must be on Social, we have all seen the figures from Gartner (what was CEB) stating that Buyers are now 57% of the way through the buying process when they contact a sales person. We are seeing this is more like 70%. If you are not visible online you won’t be short listed. In the days of on premise this probably didn’t matter, in the world of SaaS the deal velocity is so quick that buyers are doing research online and expecting to make decisions quickly.
- Highly recommend you give sales people access to a tool that can track if somebody has been on your website so they can see what prospects are looking at.
- Sales and marketing must have access to intent data. In the past, somebody who came to your website and filled in a form was a lead, now people who come to your website at probably at the end of their evaluation. Now a form filled in on your website is a lost deal.
- Never gate content. The world has changed. Gating content chokes your demand generation process.
- What ever you do in sales you need to transform other aspects of the business; the channel, the deal review process, the forecast, the forecast inspection process, the contracts and deal sign off process, because the deal velocity will be impacted.
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