Technology-buying behavior is undergoing a tectonic shift. While most companies are still cautious about moving to cloud solutions for their IT needs, some early adopters are fully embracing the cloud. These early adopters are using cloud solutions for their core applications, infrastructure and development platforms, paving the way for what is sure to be a massive shift to the cloud.
This growing trend has a profound effect on the go-to-market strategy for cloud vendors. Why? Because the buying behavior associated with cloud solutions is dramatically different than traditional technology sales. Instead of making large, upfront investments in technology, customers are starting with small initial investments in cloud-based technologies and increasing their spending as usage ramps. Many technology companies offering cloud solutions have needed to adapt their sales forces accordingly.
Cloud solutions often involve a “land and expand” strategy with their customers. One form of adaptation in job roles resulting from this change is a stronger distinction between the traditional hunter sales role focused on account acquisition (often referred to as an “Account Executive”) and the farmer role focused on account penetration (typically called an “Account Manager”). In cloud sales, the role of the Account Manager is evolving, and the role of “hunting” within existing accounts is taking on greater prominence. Broadly speaking, the sales strategy for cloud solutions entails providing on-going services that gradually increase in scope and value, representing a growing annuity revenue stream for the business. As a result, the Account Manager role must focus more time on hunting within existing accounts to grow the business while balancing time up against more traditional account management activities such as customer success, service and support. The existing account hunting, or “hunting in the zoo,” is also drastically different from the traditional “hunter” sales role that focuses on winning new customers and then handing them off to go win some more (a.k.a. “hunting in the wild”).
The role of the cloud account manager consists of four specific activities:
- Customer Success: First and foremost, the cloud account manager must ensure that the current solution is successfully deployed, and delivering the promised ROI. Successful deployment and utilization of the current investment is critical to ensuring client retention and positioning for upsell and cross-sell opportunities.
- Account Upsell: The cloud account manager must continue to drive customer adoption of current solutions to drive higher and / or broader utilization. Successful upsell manifests itself in the form of additional seat licenses or overage charges which can eventually be converted to committed recurring revenue.
- Account Cross-Sell: The cloud account manager must sell new products into the existing install base to capture a higher share of wallet by broadening the product footprint within the customer. By selling across the entire product portfolio, the cloud account manager is able to increase the “stickiness” of the cloud solution which further reduces customer churn while increasing recurring revenue.
- Account Penetration: For enterprise customers or customers with multiple business units, the cloud account manager has an opportunity to grow business by selling to new business units within the account. Developing relationships and strong internal references are required for success.
You may be wondering how the cloud account manager can effectively balance all of these activities. It’s not easy; and, depending on the complexity of the solutions offered, may require the aid of one or more support roles including sales engineer, product specialist, and customer success manager. To finance this model the typical cloud account manager carries a larger quota than his or her account executive counterpart. We’ll take up the topic of selecting the best metrics, quota practices and crediting terms in our next post on this series about cloud sales.
Learn more about how cloud companies are evolving sales coverage to align with customer buying patterns.
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