It’s true – you’ll need to alter your sales model to make a dent in the recurring revenue and cloud services space to exploit the enormous opportunity unfolding in front of us. Unfortunately, many organizations have experienced many fits and starts as they wade towards the right model.
In the words of the late great Yogi Berra, it’s déjà vu all over again! Think of how many times we try and then re-try the same old approach, from the same old playbook. Tell me this does not look familiar:
1. We assign “cloud quota” to our existing sales professionals à ah that didn’t work…
2. Then may shift to an “overlay model” à um a little too much conflict tied to that experiment
3. Next let’s try an “integrated sales model” à made our core numbers, too bad about the cloud miss, again…
You may have only tried one or flowed through the approaches in a different order, however, one thing is for sure – you most likely used or will try to use one of them.
These approaches are typically the signs seen when someone is not totally committed to driving the progress necessary to take on the challenge of growing a new business, within your existing business.
This is especially true when that business is a recurring revenue centric business, which is just so dramatically different than the transaction heavy businesses we all grew up in.
All of the approached above can concisely be labeled as hedges – we didn’t meet our objectives, but we tried and there was little collateral damage – we’re in the game, let’s not get hurt…
The moral of the story is to start with a Dedicated Sales Team out of the gate that is solely responsible for delivering your cloud-based recurring revenue objectives and nothing else. How many times does singular focus and bull headed determination fail – seldom!
I know, you don’t have dollars to invest. Well yes you do - funding is always an issue so look to build your Dedicated Team by utilizing some to-be-hired (TBH) slots or moving some up and comers who are on the right track, but have not added materially to the business. Put them on your Cloud Sales Team and let them ramp there.
Also, an army of one (1) will most likely produce better results than a watered down model with people who can make their numbers in other ways. Admit it, when you first jumped into services none of the Hardware folk’s sold a lick of services because they could still make their nut the old fashion way. We’ve all seen this movie before.
Not going right to a Dedicated Model tends to be a road to nowhere. In fact, it’s worse than a road to nowhere - it’ll disrupt your core business and cause all sorts of internal churn you don’t need and can’t afford. The marketplace and your current clients will provide all the disruption you’ll need over the next few years as they move away from on-prem.
Acknowledging that OPEX is the new Black and customers will be taking every opportunity to look at and apply recurring revenue consumption approaches to improve their businesses is imperative. It will take another twenty-four (24) or so months to really see dramatic changes in the shift, but the numbers today support the fact that on-premise sales are dropping and cloud solution sales are growing. This is not a phenomenon anymore, it’s a quarter-over-quarter reality. Just look at IBM.
Landing on the right sales model is only one piece of the puzzle and is only valuable and valid if organizations have done the work necessary to assess and validate their current readiness to begin making the progression required to their business, financial, organizational and operational models.
As you can imagine, the right sales model without the right sales plan is a non-starter. In my next note we’ll look at deploying the right sales plan to spur recurring revenue sales that will ensure a consistent and reliable growth path for your business.
In closing, even if you don’t agree with my stance, please agree with me on one point. That point is it’s time to move and get into this space. It will take you 12 to 18 months to “cross the recurring revenue chasm” and create a sustainable long-term blended business mix that will enhance and increase the value of your business. So in the words of General George Patton:
A good plan violently executed now is better than a perfect plan never executed at all…
P.S. I’d like to thank Dean Lindsay (@deanlindsay) for showing me the light at a Westcon (@WestconComstor) event in Austin. Loosely quoted - “Nobody wants to change, but we all sure want to progress and move onward and upward”… It’s all about progress.