In recent meetings with our MSP partners, the subject of sales execution has often come up. In many instances, executives are trying to launch or grow their managed services practice within a broader organization, typically one born from a lineage of reselling hardware or other products.
It has become quite common for product-centric VARs to acquire a smaller MSP to get into the managed services business. Access to skills, business model and customers are all part of the value executives expect from these acquisitions. These established organizations typically have a large and effective sales force and the line of thinking goes as follows: if we take these managed service offerings and push them through our large distribution channel, success is sure to follow. This logic is flawed, however, and here’s why:
Selling is comprised of two separate aspects: knowledge and behavior. First, sales representatives need an innate knowledge of what they are selling. Knowledge can be acquired, and people are very adept at learning new things. The second factor is behavior, the repetition of processes that make up the sales life cycle. This repetition is based on the buying habits and value drivers of customers. Sales representatives become conditioned to predictable behaviors as they move deals forward. It is the difference between transactional and relationship selling.
Think about language as a way to view this distinction between knowledge and behavior. When an individual picks up a new language, he or she can become fluent over time. This fluency comes from an ability to learn. However, even after learning a second language people think in their primary language. Why? Because the manner in which we think is a behavior that’s acquired over time.
To be successful in selling services, sales representatives accustomed to transactional product sales have to change their behavior. It isn’t simply a matter of learning about the services being sold. The approach, pace and purchase criteria of customers buying managed services are very different from those purchasing products. Consequently, the sales cycle is vastly different as well. That’s why trying to push managed services through a product sales team is inherently flawed, and a sure recipe for suboptimal performance.
So what do you do? How do you get a product-centric sales team to effectively start selling managed services? Make it simple. Make the behavior needed to sell a service as close as possible to the behaviors learned selling products. Program the script, ask salespeople to find the opportunities and leverage an overlay team to do the heavy lifting within the subsequent stages of the sales cycle. While this approach may potentially erode some of the value of the acquisition in the near term due to a higher cost of sale, it will set you and your organization up for the successful scaling and growth of your managed services business over time.
Has your business successfully managed the transition from selling product to selling services? What are some of the strategies and tactics you’ve found to be most effective?
Peter Harteveld, VP of the Nimsoft Managed Service Provider Practice and Business Development, is responsible for the enablement and growth of Nimsoft MSP customers while also looking for innovative ways to expand the capabilities of Nimsoft through strategic partners and relationships. Prior to CA Technologies, Peter spent eight years with Deloitte Consulting where he focused in the areas of post-merger and acquisition integration, organizational transformation and salesforce effectiveness. Follow Peter online via Twitter and Linkedin.
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