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May 11, 2020
Preparing Your Sales Team for a Shift From On-Prem to Cloud
By: John Marcsisin
“Curiosity killed the cat” is an old proverb used to warn of the dangers of unnecessary investigation or experimentation. Now, replace “curiosity” with “complacency,” and this new phrase will resonate with many businesses that cease to exist.
In 2000, Reed Hastings was denied by then Blockbuster CEO John Antioco after requesting $50M for his online streaming service—Netflix. His reasoning? Netflix, which at the time was a DVD mailing service, was a “very small niche business.” As of April 1, 2020, Netflix is valued at $159.7B.
There are countless other examples where one company missed out on an opportunity that could have led to a paradigm shift in the business world:
The next big opportunity may be public cloud services, where Gartner, Inc. estimates the worldwide public cloud services market is projected to grow 17% in 2020 to total $266.4 billion (up from $227.8 billion in 2019).
According to a study by the International Data Group, 69% of businesses are already using cloud technology in one capacity or another, and 18% say they plan to implement cloud-computing solutions at some point. And as the number of benefits continues to increase, it is expected that these numbers will continue to grow.
This opportunity is forcing organizations to make the switch to a cloud-based business model—while others are unable or unwilling to change–instead of relying on their tried and true legacy solutions in a declining market.
Do you want to be etched into the history book for the opportunity you didn’t seize?
According to a study by Dell, companies that invest in big data, cloud, mobility, and security enjoy up to 53% faster revenue growth than their competitors.
Click here to better understand how to evolve your go-to-market strategy as your customers shift to the cloud.
Refer to our Acceleration Summit Toolkit to transition your organization into the future. This toolkit features content on Purchase Intent Modeling, Coverage Plan, Territory Design, and Compensation Planning.
As companies transition from a CapEx (e.g., OnPrem) model to OpEx (e.g., Cloud) model, the organization must evolve with it.
A Quicker Sales Cycle and the Impact to Your Sales Team
On-premise solutions typically require signoff from the IT department and business user. The increased number of one-on-one interactions with decision-makers and influencers drives a longer—and more expensive—sales cycle.
This requires sales individuals that can develop long-term relationships with C-Suite executives and other sales executives.
SaaS sales are typically departmental; these companies do not need to go through a centralized IT department to purchase and implement the software. Because of the fewer number of decision-makers and influencers, the sales cycle is shorter—and customer lifetime value estimations become higher.
In SaaS organizations, the ability to develop relationships with C-Suite executives is still critical. So too is the ability to communicate the value of offerings both strategically and financially.
The Role of Customer Success
From the customer perspective, high infrastructure costs are a downside for OnPrem solutions—for the provider, these costs are a retention mechanism and make it difficult to switch between providers. These upfront costs do not exist in the cloud environment, which brings customer satisfaction to the forefront. Customer success is a proactive function ensuring customers achieve the desired outcomes while using your products or services.
Why is Customer Success important?
Refer to this article by Laura Hall to understand how Salesforce invested in Customer Success to reach new heights during the last recession.
An Evolving Comp Plan – How to Drive the Right Behaviors
As companies shift from OnPrem to Cloud, they must evolve their compensation plans to align with the company strategy—and drive the right behavior.
Refer to our Acceleration Summit Toolkit to transition your organization into the future. This toolkit features content on Purchase Intent Modeling, Coverage Plan, Territory Design, and Compensation Planning.
“Carpe Diem” is an essential and symbolic quote in the classic film Dead Poet’s Society. The phrase means to look for opportunities in life and make the most of them.
Each day, more providers are shifting to a cloud-based model in hopes of capturing a fractional percentage of the $266.4B market. As your company transitions from an OnPrem to a Cloud-based model, understand the reason behind the market shift—the benefit to the customer. And understand how your business must evolve to meet the everchanging needs of the customer—from your Sales team to the compensation plan. Contact SBI to ensure a more efficient and effective migration, positioning you to win sooner and more often.
I leave you with “Carpe Potestatem,” Latin for seize the opportunity—this opportunity.
John has nearly six years of consulting experience focused on sales force effectiveness, incentive plan design, executive compensation and broad-based rewards aimed at helping clients achieve short and long-term business objectives.
John’s experience includes working with organizations in varying levels of change, including: start up, wholesale transformation, and merger & acquisition. He is tasked with developing sales force effectiveness strategies and processes that attract/focus/motivate/retain top talent. Specific areas of focus include: sales coverage model, performance benchmarking, sales compensation design, account segmentation and financial analysis/modeling.
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