SunGard Availability Services - Cloud Series, Part V
In monthly recurring revenue (MRR) models involving cloud, IoT and managed services sales, customer objections often center around the potential risks of deploying new solution stacks. Therefore, from our experience, we find that sales organizations that identify and proactively incorporate risk conversations with customers are in a better position to drive the sales process and close more deals.
Follow these three steps:
1. Identify potential risks:
Clearly label the risk or threat (i.e., security, downtime, etc.).
Understand the sub-risks or potential threats associated with the solution (i.e., specific security issues, etc.).
Be very clear on what potential impact (+/-) the threats have on the business (i.e., dollar value, loss of productivity time, etc.).
Determine which risks are acceptable to the company.
Clearly specify the risks that need detailed risk mitigation plans built into the solution.
2. Assemble the specific risk mitigation action plans. The plans should clearly detail what the client can expect, what the business impact will be and what the work-around plan is to avoid, transfer or mitigate the risk:
Transfer the risk: This may be an opportunity to offer the client additional services or to leverage one of your partners in the sales cycle to transfer some risk from the client across one or more third parties. Transferring risk sometimes allows a client to feel more secure because they have more than one party or company with whom to balance and carry some of the load.
Mitigate the risk: This is one of the most common plans in a cloud and managed service solution sale. It's about limiting the impact of the risk and ensuring you create a solution that would keep the anticipated problem to a minimum or make it smaller and easier to accept. For example, if you are deploying a security solution and service offering with a client, you may increase the proactive assessments you do from monthly to weekly to ensure you anticipate, identify and mitigate any potential problems.
Turn a risk into a positive: Some risks can be turned into 'solutions' for a broader set of company issues. For example, a risk associated with a new cloud solution deployment could be resources — e.g., perhaps the client doesn't have enough people to deploy or manage the solution. This may be an opportunity to help the client form a partnership with a nearby university that could help them develop a talent pool for the future. Or, perhaps it could be additional consulting or managed services from your company.
3. Once you have secured the contract, establish formal and informal methods to ensure customer satisfaction and provide a framework to expand your business with your customer over time:
Assign a long-term program manager accountable for the customer's success; and establish a scorecard and metrics to measure that success monthly.
Implement a non-selling quarterly business review (QBR) — spend 20% of the time reviewing the scorecard and open challenges and 80% of the time on the macro environment (i.e., what's ahead for the client, how you will best continue to serve them, etc.).
Leverage your technical teams to hold non-sales meetings - to ensure customer satisfaction.
Be a follow-up rock star. Studies show that 44% of salespeople give up after one follow-up, but 80% of sales require five engagements to close a deal. A follow-up can be as simple as sharing a new case study, white paper, blog or article that speaks to a specific pain point your prospect is having.
Continue to maintain open lines of communication and bring new ideas — both formally or informally.
Learning to handle objections by labeling and addressing potential risks will help you close the sale and expand your business. But the end game is fostering long-term customer relationships by establishing continuous communication streams with your customers to ensure you stay engaged -- and add value.
Read our next post to learn about partnering strategies for building blended solutions and driving successful customer outcomes.