Picture1-newIn an earlier post we discussed the fundamental shift in how people think about deploying sales resources to grow their cloud businesses. It makes sense if you think about it. The cloud has changed how people buy; so in order to remain relevant, sales organizations must adapt how they sell to match the new buying paradigm.

Here are a few examples of how things are changing:

  1. Recurring and usage-based are the most prevalent revenue models in cloud with the implication that vendors must always be selling and providing value in order to maintain future revenue streams.
  2. Business buyers are not as dependent on IT to deploy applications as the technical aspect is now handled “as a service” by the solution provider.
  3. Companies now monetize their solution in a myriad of ways, and these revenue streams (Paid, Freemium, Free Trial, Subsidized, etc.) create unique challenges that must be addressed by the go-to-market model.

Picture1_circleLet’s focus on the first point as the change in buying process due to recurring and usage-based revenue models and the corresponding sales process make the all-in-one sales rep a difficult proposition to manage when companies are trying to scale. The essence is that companies must be selling all the time and continue to add value, or the customer is at risk for churn. In addition, the ability for customers to deploy small scale POCs or pilots means that many companies have adopted a “land and expand” strategy when selling to customers. Compared with traditional technology or on-premise enterprise software sales where there is a finite number of selling instances, cloud sales has a continuous sales process where each interaction is an opportunity to add value, and in turn increase licenses, usage or whatever other value metric the company has chosen. We categorize these selling moments into what we have coined as Hunting in the Wild, Hunting in the Zoo and Farming the Base.

Picture2_peopleAs a result of this shift, the all-in-one sales rep has split into a collection of sales roles which address each portion of the revenue model.

  1. Pure hunters that are aligned with “Hunting in the Wild” are solely focused on acquiring new customers. These roles are typified by higher pay at risk and more upside to reward success.
  2. Hunters that are aligned with existing customers, or “Hunting in the Zoo,” are focused on upselling into existing customers, selling new footprints to existing customers or crossing business units to sell. These roles still have fairly aggressive pay at risk and upside, though their quotas will often times be much higher than their “Hunting in the Wild” counterparts due to their existing base of customers.
  3. Customer Success and Renewals are aligned with maintaining an existing book of business and to ensure that customers realize the value which they purchased and as a result are measured on customer retention (i.e., “Farming the Base”). Pay at risk is typically not as aggressive, though upside is also more limited.

While this may not be the path every cloud company should follow, many companies have chosen this as a preferred path to growth. Companies usually start with an all-in-one seller and then split the jobs as the business begins to scale and the job of managing each piece of the revenue stream proves too much for a single sales person to handle.Picture3_3phases

Are you using the right sales roles for your business?

  1. What is the revenue model of your business? Your sales roles may vary drastically if you have a freemium model vs. a paid model.
  2. How important is new logo acquisition to your business? A job focused on new customer acquisition may not be viable if you are already well penetrated in any given market.
  3. How “sticky” is your product? If you are categorized by your customers as discretionary spend, you may want to invest more heavily in customer success to ensure that customers do not become churn risks.
  4. How broad is your portfolio? If you have many products for the sales rep to sell, they may not have the bandwidth to adequately sell all products in the portfolio.

Want to learn more? View or download our ebook on this topic, or contact us for an in-house briefing on cloud sales best practices.

Originally published by: Dale Chang