IT and Business Insights for SMB Solution Providers

Accelerating a Cloud Practice: The Good, the Bad, and the Ugly

Focus on strategy, execution, and management in three areas—sales, marketing, and operations—to turn your cloud practice into a profitable one. By Keith Lubner

During the past three years we have been knee-deep in assisting vendors, distributors, and partners build and accelerate their cloud business. We have seen the good, the bad, and the ugly, and have identified the most critical challenges a partner faces when building a profitable business. The good news: There are proven steps a partner can take to resolve those issues and create a new business model that drives profitability.

In order to avoid “boiling the ocean” (overwhelming partners with too much, too soon), we segment our consulting engagements into the three categories that all businesses have: sales, marketing, and operations. This makes it easy for a partner to digest one piece at a time depending upon their level of maturity. This strategy is one element of what we call “adaptive partnering.” Within each business category there are obviously specific issues that must be addressed.

Three Challenge Areas

In the sales area partners are faced with the following:

  • Need for a defined sales process with brilliant execution
  • Use of focused “cross-environmental services,” i.e., more efficient cross selling and up selling
  • Customer and sales confusion on cloud vs. on-premises issues
  • Cloud economic models that impact compensation, COS, etc.
  • The need to turn salespeople into consultative-/solutions-focused resources
  • The need for their entire organization to connect “emotionally” within the sales process with customers, partners, and prospects

In the marketing area partners are faced with the following challenges:

  • Becoming an authority in the market to differentiate themselves
  • Increasing funnel development and potential sales value
  • Developing thought leadership programs
  • Creating market education and better messaging
  • Developing vertical practices with corresponding industry messaging
  • Aligning marketing tactics to the stages of the customer buying cycle

Managing a cloud-based business requires a focus on the operational aspects as well:

  • Increasing the power of leverage in your business model via partnering
  • Creating a realistic 18-month practice business plan including realistic goals
  • Transforming services offerings into packaged deliverables
  • Managing the business transformation tactics and creating an organizational roadmap for complete “buy in”

Expertise, Reputation Are Drivers

In creating the necessary pathway to resolve these challenges it is also important to align with how technology buyers are deciding with whom to do business. The top four reasons a customer selects a solution provider are:

  1. Technical expertise
  2. Vertical market knowledge
  3. Business process awareness
  4. Reputation

Therefore, your knowledge, business expertise, and corresponding reputation are the primary drivers—meaning you should be focusing on promoting your value as a company, not necessarily that you can implement xyz solution. This “shift” will help you create stickier, longer-term, true partnerships with your clients, helping to eliminate potential competition.

If you understand the challenges of building a cloud practice and the decision criteria then determining an action plan becomes clear. We have outlined for each business area the necessary steps a partner can implement to create a successful cloud model.

Develop an Action Plan

Using a Cloud Maturity Model Assessment Tool, partners can identify specific areas to focus on while they accelerate their cloud practice.

For cloud sales a partner must:

  • Create a more defined sales process map along with an increased focus on performing more detailed discovery with the prospect.
  • Have increased levels of sales training, role play, and sales management focus to develop effective execution.
  • Turn salespeople into consultants, which is critical to success. We call this “business guidance” selling.
  • Review sales compensation models, which may need to be redefined. We recommend various plans based on the levels of cloud maturity and the business goals of the organization.
  • Sales execution must be brilliant in a cloud model because of reduced margins and short-term revenues and the need to dominate your marketplace.

For cloud marketing partners need to:

  • Spend time carefully assessing the profile of the “ideal client” and determining the size of the market they are planning to attack.
  • Craft a winning vertical market focus. This is a critical success factor, and becoming a vertical leader will increase the velocity of order pattern and profitability.
  • Increase funnel development. This is important as revenues/profits/sales in a cloud model can impact the partners’ short-term cash flow without increased levels of opportunity.
  • Create a well-thought-out marketing program with a rolling six-month marketing calendar that includes events, PR, customer programs, and communications.
  • Develop thought leadership marketing both within the vertical market and the general demographic market. A cloud partner needs to be viewed as the “go to” IT company. Thought leadership will assist in achieving that goal. The leaders in selling cloud solutions are doing it extremely well.

For operations, the partner must:

  • Focus on creating the formula or recipe for the business. Careful dashboard/metrics management is key, because evaluating potential sales, expected cash flow, and resource management is extremely important in building a cloud practice.
  • Depending upon maturity level in operations, build a detailed project plan to manage all the workflow for the sales, marketing, and operations management for the cloud practice.

By focusing on strategy, execution, and management, acceleration into a profitable cloud practice will be a reality.

Keith Lubner ([email protected]) is managing partner of Channel Consulting Corp., a global consulting organization focused on channel strategy, design, enablement, outsourcing, and training for growing companies. For more information about Keith and his organization, visit www.channelconsultingcorp.com. Keith and Ken Thoreson of Acumen Management have developed a comprehensive program on business guidance. Contact Keith if you are interested in learning more.

Ken Thoreson “operationalizes” sales management systems and processes that pull revenue out of the doldrums into the fresh zone. During the past 17 years, his consulting, advisory, and platform services have illuminated, motivated, and rejuvenated the sales efforts for organizations throughout the world. He was recently ranked for the third year in a row by Top Sales World magazine as one of the Top 50 Sales & Marketing Influencers for 2014. Ken has written five books, and latest is: SLAMMED! for First Time Sales Managers. Ken provides keynotes, consulting services, and products designed to improve business performance. Need more sales management resources? Check out his Sales Management Tool Kit or the Acumen Project. Contact him at [email protected] or visit www.AcumenManagement.com. Read his blog at www.YourSalesManagementGuru.com.

 

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