Building a high volume sales engine
This spring saw the long-awaited release of Microsoft Dynamics 365 Business Central and with that probably the biggest change to our channel in twenty years. Combining that with the Power platform and the expected release of Business Central on-premises in late 2018, the learning curve for partners has never been bigger. As partners, the first thing we think about in times of change is identifying the technology that we need to understand – but that is not all that matters in this case.
With Business Central’s cloud-centric approach, the partner business model changes dramatically. It will impact not only our sales approach and go-to-market, but also the size and margins of deals. There will be less money on the initial signing of the deal, but over time the secured revenue on a recurring basis will increase the value of your company. For an example of recurring revenue as one of the drivers of company value and stock prices – see Microsoft’s stock price.
In essence, this means that any Microsoft partner will need to build a new kind of high volume sales engine. In the trainings that QBS is delivering to traditional Dynamics resellers, this shift in business model is an integral part of the change any partner needs to go through to become cloud-ready.
In this article I would like to give you some pointers and out-of-the-box ideas to setup such a high-volume sales engine.
1. New type of sales person
The person successfully selling any standardized cloud solutions is different in all aspects from the traditional enterprise software sales person. Probably their most important word is “NO.” NO that feature is not available with this software; NO this product can’t be bought; NO we don’t deploy on premises; and NO we don’t customize the software.
It is like shopping at Ikea. You buy as it is, at a reasonably low price. If a customer doesn’t like it, we change the sales approach – and the sales person – to a traditional and low-volume model where a more tailored approach is available at a very different price point.
Our cloud sales rep is a person who is used to selling through online meetings, focusing on business value and has no company car. The sales are done online. This person is able to do a full demo of all the capabilities and doesn’t hand over the deal to any other person. This person is doing everything from the first contact to closing the deal. Just like a salesperson at Ikea.
2. The sales cycles are short
From the initial contact to the deal closure should ideally take no more than 30 days. In this time the customer is shown a series of demos and the price model is explained. Furthermore, white papers, blogs, reference cases, and videos are shared. All this content was prepared by the team in advance, as they know it is important to provide such information quickly. Hence, when looking for the solution on your website, the customer already found a lot of information. So this customer has in-depth knowledge by the time they are in contact with you.
2. Weekly forecasting
As the sales cycles should get shorter, forecasting is done on a weekly basis. The deal is expected that week, not that month. A week without a deal is a lost week.
3. Compensate to reward volume
The magic word for any sales person is the compensation plan. In this case the thing we are trying to reward is volume, because that is our key objective. And we want to stimulate the sales team as much as we can to go for this goal. For that reason, the commission can be paid every month. So if the deal closes, this will impact his compensation for this month. Compensation can traditionally be money, but we can also think in other ways to compensate with hardware or vacations. In some countries this is lucrative for tax related reasons.
We also want to compensate for customers that are staying with our company and the software, so a smaller percentage of the recurring revenue should be shared with the sales team as well.
4. After the deal is closed, retention is the key word
In this new sales model, the work is not done after the first deal. From that point forward we will try to upsell to other work packages and more functionality.
We are selling in waves. After wave one comes a predefined second wave, a third wave, etc. By setting this up in workflow in your CRM system, we help the sales team to make more sales over time, while retaining existing customers, helping to get to that magic ‘one-deal-a week’ situation.
I am looking forward to your thoughts and ideas on how to setup a high-volume sales engine…