The number #1 reason why “sales” will never be the same again:

What used to be called the “Art of Selling” is now a distant memory thanks to 'the Cloud'. Yes, that's right...'the Cloud' has changed B2B sales more than anything else has before, or will again.

When Amazon Web Services (AWS) launched in March of 2006, a whole new era of sales was born. Subscription and consumption based business models were already emerging, but they became a reality in 2006 and almost overnight the dynamic between buyers and sellers changed irrevocably. Yet for some reason, despite 14 elapsed years since then, many of the world’s vendor organisations still refuse to accept or acknowledge this important change, and the MASSIVE impact that it has had on professional B2B selling.

In my mind, it's difficult to think of a bigger change to the 'sales' profession', and it's equally difficult to fathom how so many have failed to recognise this change. As we begin 2020, it’s obvious that a large portion of the world sales leaders are either not permitted to acknowledge this change, or they are simply blinded in their myopic race towards revenue and quota attainment that they have completely missed how the cloud has transferred ALL of the power to buyers.

Consider this: the traditional sales model focused almost exclusively on the close. In the tech industries, where I have spent my career, vendor salespeople would sell a highly customised software or services contract often with multi-year terms, and they would then receive the bulk of the revenue up front.

From here, the salesperson would celebrate their win, take home the commission, and move on to the next opportunity. While not every sale would close, and the acquisition costs of each of those opportunities was significant whether the buyer went ahead or not, the deals that went through were often so large that they made up for the acquisition costs of those that didn’t close.

There are two main issues with this old approach. The first is that it is focused on a short-term vendor outcome, rather than lifetime customer value (LCV), and this has exacerbated the distrust between vendors and buyers. The vendors often over-promised and then under-delivered in their mad scramble for short term financial results, leaving a sour taste in the mouths of their own buyers, hence the terms 'buyers remorse', and 'post purchase dissonance'.

The second, and related issue is that this old model encourages salespeople to push hard to close any lead regardless of fit – because there is a big up-front purchase, there is no risk to the vendor if the customer is unhappy with the product or service. That is, there is no 'risk-share' in this model because the vendor has already been paid in full, and it's now up to the customer to derive value from the product. Weird in hindsight.

Of course, with the technology that now facilitates these consumption-based models, those large up-front purchases rarely occur. Instead, more and more businesses expect products and services to be made available on a freemium, trial, POC or pilot basis, and then a subscription model which can be switched on or off as needed, or if the customer is no longer realising value from the product.

In this new model, there is still a cost to the vendor for acquiring each new customer (CoCA), and this needs to be recovered via a steady string of small purchases over time (micro-transactions), rather than through one big win. 70% of total customer revenue is now being realised after the initial sale - according to Totango CEO Guy Nirpa, and this requires a totally different way of engaging and selling....and a totally different way of measuring, managing and rewarding sales staff.

In 2020, vendor sales teams MUST now focus on LCV, rather than just the initial sale, and this is where the collaboration with Customer Success becomes critically important. Every successful business will now begin with the overarching objective of creating an ongoing and delightful buying experience (CX) for each customer – one that creates a 'wow' at each and every touch-point where possible. When they do, these savvy vendors create such an amazing ongoing CX that customers become advocates, and then they refer the vendor to new customers.

This monumental shift to being buyer focused is the reason that Customer Success departments are now growing so fast, and why organisations like Qualtrics have now defined a whole new category called Experience Management. Likewise, HubSpot’s CEO (Mr Brian Halligan) recently coined the term “experience-market fit” claiming that CX is the only thing that matters, and that the really savvy vendors of the world not only understand this shift, but they have redesigned the entire culture and operational focus to ensure that they can execute an appropriate sales playbook. “How they sell, is why they win” said Mr Halligan. Similarly, according to Microsoft CFO Amy Hood, “ultimately in a consumption-based business, Customer Success is all that matters”.

So, the Cloud has facilitated a seismic shift to subscription and consumption based models, meaning that the goal of every sales department is simply to create the most valuable outcomes possible throughout the ENTIRE buyer life-cycle in order to make the customer as successful as possible which, in turn, improves LCV and that’s what creates raving fans, and in turn, your own business sustainability.

Sales is no longer a monthly/quarterly game of rape & pillage where vendors exploited buyers and treated them as virtual adversaries that needed to be conquered. The pendulum has swung - and now vendors need to deliver on-going value - from cradle to grave as they say.

Put simply, it’s impossible to overstate how much the Cloud has impacted the sales profession. As a result, it's now critically important that you create and implement the type of sales playbook that will facilitate a sales execution model that addresses all the above. It won't be easy, but it must be done.

Please let me know if you need help with your sales playbook….this is exactly what we do at SalesTribe…..we help drag businesses out of the 20th century and into the 21st century....with digital sales enablement that is 100% focused on your buyers.

If you wish to delve deeper into this topic, then I suggest that you buy a copy of this ground breaking book (for it's time - 2011) called Consumption Economics:

By Graham Hawkins

CEO & Founder - SalesTribe