Johannesburg, 24 May 2017
The idea of selling an outcome - a solution to a customer's need or a problem - rather than selling a tool or product, isn't new. Harvard University marketing professor Theodore Levitt is said to have told his students several decades back that people don't want to buy a quarter-inch drill - they want to buy a quarter-inch hole.
Yet, as much as ICT vendors and their channel partners have spoken about it over the past 20 years, they have struggled to make the transition from selling technology products to selling business solutions. As their customers of all sizes start to move to the cloud, resellers not only have the opportunity to get it right, but also the imperative, says Jonathan Kropf, CEO of Tarsus On Demand.
The main reason it was hard, in the past, to sell ICT as a solution rather than as discrete products and services, was that customers' IT environments were complex, with many moving parts and many linkages between their applications and infrastructure. Coming into this environment, a salesperson would need to look at which tools in the toolbox were compatible with the customer's services and processes.
Cloud changes the picture
He or she would be interacting with an IT department that would assume the responsibility of purchasing products and services from multiple vendors and service providers, and putting them together as a set of business services and applications for end-users. Now, with the rise of the cloud, the picture has changed.
Today, a sales team that wants to get up and running with a basic customer relationship management solution can subscribe to a cloud platform and be up and running in days. That is a world of difference from the days the sales manager would ask IT for help, which in turn would start procurement of the application and the underlying infrastructure.
The cloud, then, is an opportunity for ICT resellers to embrace solutions selling rather than continuing to sell technology. But, many are finding the old habits hard to break. One reason for this is simply that ICT salespeople have yet to adapt to the new world. They still think of themselves as selling big-ticket products in long sales cycles, with the hope of a big revenue boost when a sale is closed.
They still regard the IT manager or the CIO as their primary customer in the business. But in many mid-market and large enterprises, line departments such as finance, marketing, logistics and sales are taking charge of their own business applications. They might consult with IT about technical standards or integration, but they want to be in the driver's seat for purchasing decisions.
Speeds, feeds, brands don't matter
What this means for salespeople at IT resellers is that they should change how they sell, who they sell to and the way they think about revenue. The first point is that it's no longer about speeds, feeds and brands since users buy applications and services that answer business needs when they subscribe to a cloud service.
They don't buy a marketing automation suite and the underlying technology, they buy a way to streamline communication with customers, measure marketing performance and optimise conversions. They don't buy an accounting package, they want to issue invoices and track payments.
Secondly, the technology has become simpler and more transparent, so business users are driving many of their own cloud application purchases. And thirdly, rather than hoping for a big commission after selling a large system to a customer over a six-month RFP cycle, salespeople need to become accustomed to an annuity model.
This means we're moving towards a more consultative sales approach, one focused on asking what challenges the business user is trying to address. This means many of the most successful cloud salespeople are those with experience in fields such as financial services, where you're helping someone manage their lifestyle and legacy rather than selling them policies and investments.
To succeed in the world of the cloud, ICT resellers need to unlearn much of what worked so well for them in the past. For many, this will be hard work, but it is essential in a world where organisations want to buy business services rather than servers and software licences.
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