7.11.24 – Security Info Watch
Three reasons why integrators are not selling more cloud and managed services. Chris Peterson.
This article originally appeared in the June 2024 issue of Security Business magazine. Don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter if you share it.
The first conversation I remember having about system integrators underperforming in sales of cloud services was in 2012. Fast-forward to today and helping salespeople sell more cloud and managed services is the most common topic I am asked about.
The technology is mature. The end-user marketplace is ready for it. The technology is not complex. So why have salespeople struggled in this area? After working with dozens of integrators, I have concluded that it comes down to three primary reasons:
1. They are achieving goals without selling managed services.
Most salespeople are reaching their quotas by continuing to sell on-premises projects to current customers. Why would anyone pursue new accounts or invite conflict by introducing cloud or managed services to these customers? If they are making quota, why make it hard or risk losing a customer?
Adjust compensation plans to aggressively reward service sales, even if you lose money upfront – the long-term, sticky, high-margin customer is worth a short-term loss.
To overcome this challenge, create specific goals tied to cloud and managed services. Hold the importance of those goals as highly as any other goals, perhaps even higher. When someone reaches their monthly services goal, celebrate it. Engage and reward the whole company when the sales team reaches their total services sales goal. Finally, make sure to hold salespeople accountable for key performance indicators that lead to achieving their goals.
2. Their conversations are about selling, not about managing change.
Unfortunately, most integration salespeople who try to sell cloud or managed services sell with traditional selling methods when a change management approach is needed. The conversation about cloud or managed services is not a selling discussion, it is a change management discussion. If an end-user shifts from managing an on-premises system to paying an integrator to remotely manage a cloud-hosted system, then they will experience a fundamental change in their business process. This can be daunting and scary to most people.
Most successful sales to date have been to accounts that requested cloud or managed services. The sales were to progressive companies, or perhaps they were to companies who were convinced by marketing material or a manufacturer. Regardless, they already knew they wanted these services, so the salespeople did not have to manage change; however, sales to end-users who did not request cloud or managed services have been very rare, and this category accounts for a very large majority of the market.
I wrote about potential solutions to this challenge in a column last year, available at www.securityinfowatch.com/53058423. Understanding how to lead this conversation will not only improve someone’s ability to sell cloud and managed services, but it will also elevate relationships with your customers.
3. Commission plans reward on-premises projects more than services.
I don’t believe that salespeople are coin-operated – many more factors than money determine their actions. However, I do believe that salespeople modify their activity toward things that pay more commission. Adjust the compensation plan to aggressively reward service sales, even if you lose money upfront – the long-term, sticky, high-margin customer is worth a short-term loss.
About the Author
Chris Peterson
Chris Peterson is the founder and president of Vector Firm, a sales consulting and training company built specifically for the security industry. Use “Security Business” as a coupon code to receive a 10% lifetime discount at the Vector Firm Academy. www.vectorfirmacademy.com • (321) 439-3025