Neil Moulton, Vice President of Sales at Cirrus looks at how employing old school values to the whole sales process will still pay off for those selling new application deployment models such as the cloud.
In a typical working lifetime it’s not unusual for a handful of people to leave a lasting impact on an individual. In the past 30 or so years I’ve worked closely with dozens of people whose names are lost to me – but one or two colleagues have a formative impact on you and define your future approach, especially in sales. One such person was Peter, a Sales Director in my first job in telecoms who was as old school as it gets. I once turned up in the office proudly sporting a very natty suit I’d just bought from the discount outfitters in the Goswell Road and was subjected to a 5 minute tirade because it had a hint of green in it – navy blue or black suits, double cuffs and shiny shoes (black of course) were de rigueur.
This was in the pre-cloud days when no-on got out of bed for a sale of less than £50k and if you followed the company defined sales formula, wore the correct uniform and worked hard you would close business and you would do well (having a leading market position also helped). So the market was defined by big boxes, big price tags and big commission cheques – if you didn’t have a massive Swiss-made watch, you weren’t in Peter’s gang.
Industry luminary and TV Dragon, Piers Linney bravely (in my opinion) stood up at a Channel conference a few years ago and predicted the impending demise of the traditional premise-based reseller as cloud sales opportunity overtook hardware sales. I think this was a bold statement designed to get attention (and it did just that, I can’t remember too much else that was discussed that day), however whether you agree the premise or not, there’s no doubt that cloud sales have moved from the point at which adoption is optional.
According to Roger’s Diffusion of Innovation theory, new technologies move from Innovators to Early adopters at a relatively low point of market saturation (sub 10%) and from Early Adopters to early majority at sub 30%. If you look at most cloud telephony solutions available today, most fit within that sector (storage and SaaS is probably further advanced). Forrester research indicates that around 40% of buyers in the Contact Centre market have immediate or short term cloud adoption plans so there’s no doubt of the importance of this market trend.
The issue is that cloud sales are typically based on annuity revenues rather than capital expenditure, so what does that mean for the sales people addicted to BMW M5s and expensive wrist-wear, and the resellers who employ them?
In the past, reseller go-to-market structures have to a large extent determined their customers’ buying behaviour. Reseller business models have in part been determined by the need to attract and reward top sales people. Top sales people want to make high value equipment sales so that’s what they recommend to customers, and so the cycle continues. That’s all fine until we see a disruptive technology that breaks that cycle. Customers now know they can source revenue-based alternatives to CPE – and they are voting with their feet. Suppliers and clients now know that many of the cloud solutions available (and Cirrus is a great example of this) can overlay existing technology – so no ‘rip and replace’ dependency, no need to finance residual values, no awkward conversations about replacing obsolescent equipment that’s only 50% depreciated; this all adds up to a shorter sales cycle and happier customers.
So it’s back to harbinger of doom time again – resellers who do not have a cloud solutions portfolio will be missing out on opportunity today and this will only become more acute as time and the market progresses.
For the cloud salesperson the opportunity to earn is as significant as ever; if you look at the % payout of a typical deal in terms of sales commission in the CPE world and compare it with how we pay at Cirrus for example, there’s no real difference. Suppliers need to be smart about compensation plans to make sure individuals are rewarded for their efforts.
I still follow the basic rules I learned in my early days working with people like Peter. I’m old school when it comes to customer courtesy (I still even wear a tie occasionally) and work ethic/discipline. I’m just applying those principles in a new market and in different ways; it’s amazing how effective the results are!