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| Selling cloud is different |
Once upon a time, there was no Cloud software. IT salespeople only sold ‘on-premise’ software. The software was installed onto the client’s IT infrastructure, customised to suit their specific needs, integrated with the client’s other systems, tested, customised some more and retested.
Consequently the client’s own IT team was closely involved throughout this long sales and implementation process, and IT salespeople found themselves selling to IT people a lot of the time - in a very long, technology-focused sales cycle.
Now we have Cloud computing, and life is very different. It’s basically a way of outsourcing your IT. So selling Cloud software to IT people is hard: why would they use up their already stretched IT budget to buy something that might eventually put them out of a job?
Luckily, Cloud software is subscription-based. So when you buy it, it's operational expenditure, not capital expenditure. This means it doesn't necessarily need to be covered by the IT budget. You’re free to sell your Cloud application to business people who want to improve their business performance - and they usually have an opex budget to help them do that.
So, if you're selling Cloud Sales Force Automation (SFA), you sell to the Head of Sales. If you're selling Cloud Service CRM, you sell to the Head of the Contact Centre. If you're selling Cloud Enterprise Performance Management (EPM), you sell to the Head of Finance. The good news for your customer is that with a Cloud application, they can get the benefit of using it almost immediately, without getting their IT department heavily involved. That's usually an attractive idea for them.
But if you've been selling on-premise software for years, you've probably become used to selling to IT. How do you change your selling approach to suit non-IT people, who don't really care about or understand technology?
What does the Head of Sales, Customer Service or Finance care about? They care about what impact your application will have in terms of increased sales, retained customers or reduced costs. This means your sales approach needs to focus on uncovering the problems and opportunities that your application could help with, and quantifying this in terms of bottom-line impact. This means you need to work in partnership with your customer to build a business case for your Cloud application.
One other big advantage of selling this way - questions of budget become less important. This is because typically a business case for a Cloud application will show an almost immediate return on investment because of the very fast implementation and incremental payment by subscription that the Cloud offers. It's much easier to find the money and sign-off for this kind of investment. Compare this with selling on-premise software, where you're asking the customer to pay a large license up-front and then wait many months for it to be implemented before they see any return!
Selling Cloud software might sound a lot more straightforward than selling on-premise software, and in many ways it is - but it’s not all easy. I asked my colleague, Marc Chabot, who’s been selling Cloud software around the world for ten years, to tell us about some of the challenges associated with selling to the business instead of IT...
You need to be proactive rather than reactive. Business people don't buy software very often, so if you wait for them ask to buy from you, they won’t. You need to get out there and create the opportunities, showing customers where you can add value. If you wait for the customer to come to you, it will be IT that comes, and they don’t buy Cloud software.
But to sell proactively to the business, you need to know before you talk with the customer how your solution can potentially improve their business. You need to be prepared to talk about that in the very first discussion, so you need to do your homework on their business drivers. Be prepared to estimate the potential financial impact and talk about that in the first conversation.
Business people are motivated by and respond to numbers. From the first meeting, work with the customer to build a business case that they own as much as you do. Be ready to back up your business case with references to similar customers where you have solved similar problems. From the beginning, focus on helping your client to succeed. As you build your case, make sure it is written on the customer’s corporate template, not yours. This gives your business champion a tool to take up the chain. You need to help them to sell their business case internally, to own it and take the credit for it!
Be prepared for many small demos instead of one large one. You should be comfortable doing short generic demos at any time to reinforce the solution and your value as a trusted advisor.
And finally, remember, a key advantage of Cloud software for the customer is that it is fast. Fast to buy, fast to implement and fast to give you value. This means you need to be fast too. Anything that took you ten days in the on-premise world needs to take you only a couple of days in the Cloud world - and I mean everything!Another colleague, Darren Purcell, who has been working in applications for many years, highlights the power of the ‘land and expand’ approach to selling Cloud software...
There is a way to sweeten a Cloud solution for IT, and that's to leverage the fact that IT usually have a waiting list of around 1 or 2 years before they can take on large system roll-outs. A Cloud solution can take the pressure off them. If they're still not budging, try a hybrid approach – propose they use a combined Cloud/on-premise option as a temporary measure, with a view to implementing an on-premise solution as soon as they have time to do it. The truth is, they'll probably be so happy with the Cloud version, that they'll end up sticking with it. I've seen this work with some very large and well-known clients.What’s your experience of making the transition from selling on-premise software to selling Cloud software? Don't be shy, use the comments box below...
Picture: Charis Tsevis, Flickr
