4 Magical Tricks to Selling as a Service

Selling As A Service, technology sales
November 20, 2017

Technology integrators know there are many challenges (and rewards) when it comes to managing revenue streams. One of theSelling As A Service most challenging aspects of working in technology is the constant evolution. It seems like once your team gets really efficient at closing deals on a particular technology, that technology becomes obsolete. Another issue is an extended buying cycle, precipitated by the necessity to raise large amounts of capital prior to making a purchase from you. Finally, revenue generation activities require lots of energy—it requires labor, time, and attention to produce. What if you had a model that allowed you to refresh as the technology evolves, one that enables your customers to move forward more quickly with purchases because you’re working with an operational expenditure (OpEx) model as opposed to a capital expenditure (CapEx) model. It also moves your organization to a passive income model, meaning you continue to bring revenue in regardless of future sales activity. What if you could start selling anything as a service?

What Does “Selling as a Service” Mean?

Anything as a Service (or XaaS) is the term for any technology or distribution model that occurs on a recurring monthly basis as opposed to a one-time purchase. In the example of Software as a Service, the software is accessed through a portal (as opposed to receiving physical disk) and is billed monthly (or annually) instead of a one-time purchase. This means a few things to the end user:

  • It changes from a CapEx model to an OpEx model, which is typically easier to budget (and reduces the length of the sales cycle).
  • It provides more opportunities for updates, ensuring they are always using the most current version of the technology.
  • The service associated with an XaaS model is much more complete, allowing for a vastly better customer experience.

And Selling as a Service is Good for You Too

In addition to providing many benefits for your customers, XaaS is a great addition to your organization. There are a lot of reasons to add these services to your catalog. They are a great way to improve profit margins with a lower energy investment and will increase the value of your business. With an selling as a service model you:

  • Have a repeatable model, meaning you can implement it for many types of technology.
  • Improve your monthly recurring revenue (MRR) without requiring a huge increase in labor or time from your team.
  • Protect equipment margins in a largely evolving industry.

So You’re on Board with the XaaS Model

What next? How do you integrate it into your sales process in a way that is both seamless and effective? Because it’s definitely not just about telling your sales team that you want to incorporate an MRR component to your catalogue. There are some key actions you need to take to ensure a successful launch.

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Here are the 4 Magic Secrets to Selling Anything as a Service

1. Say Goodbye to This

We’ve all been in a situation where we kept getting charged over and over again for a service or bill that we thought was paid. Don’t be that company. Eliminate sticker shock as well as nickel-and-diming with the XaaS model. It’s the perfect opportunity to consolidate your customers’ services into one single payment. It’s easier for customers to budget, it improves your AR process, and creates a much more stable income base for your organization. Just follow the fairly simple process of determining the cost of your monthly services, then adding a profit margin, and voila—you have the single payment your customers will make for your services. It’s more stable for their accounting and budgeting, and gives you an easier way to plan your annual revenue. This is also a great model for creating passive revenue—our customers are creatures of habit, so having constantly refreshing technology that just works means your team can continue collecting revenue on that sale, in theory, forever, while continuing to seek out new business.

2. Make This Stupid Easy

The key to a successful XaaS process is to work with the strengths of your sales team, not against them. It’s important to create a roadmap for both the pre-sales and post-sales processes if you’re going to completely change the way your account managers operate. That doesn’t mean you have to start from scratch.  You can make a couple of easy tweaks to the pre and post-sales processes you already have in place and adjust it to fit the MRR model. For example, your quoting process might need modification. It’s very important to make it simple to add an MSP or MRR component to customer quotes.  The right tools can help you be persuasive, demonstrating why this payment scenario makes sense for that customer.

3. Adjust This Important Sales Component

Let’s be real: do sales professionals do what they do for the good of your business? Maybe. What about for the glory? Probably a little. So why do they go out there and face rejection and disappointment every single day? For the MONEY. If you want the account managers to get on board with the selling as a service model, you will need to use financial incentives. It’s a fact that there are no magic bullets when it comes to compensation, but there are fatal bullets. For example, a 100% commission plan does not mesh with as-a-Service. You need a compensation plan that is a win-win for the sales professional and for the company. The basic idea is to protect the company when an individual’s performance is low, put the employee ahead of the company when they’re reaching 100% of their goal and accelerate their incentives when they’re on pace to exceed their goals.

4.Put These in Place First

Implementing document automation tools will assist in the process of developing sales proposals built for selling as a service. For example, skip the line-item pricing.  Your team is selling the entire package, and the proposal should reflect this accordingly. You should also include a monthly payment option every single time. The best part of a good sales tool is that it includes supporting documentation and agreements automatically, and eliminates room for error, an especially important aspect of introducing a new process to any sales department. The right automation tool will enable your sales team to quickly include the XaaS components, but not in a way that makes them look like they were just thrown in there. It’s seamlessly integrated into the rest of the proposal and automated, meaning your team isn’t spending hours trying to figure out how include the MRR.

As you can see, having a lot of support and automation is vital to the successful addition of the MRR model to your technology sales organization. It takes the guesswork and speed bumps out of the process, and allows your sales team to focus on building relationships without sacrificing quality or accuracy of their proposals.

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