Selling As-A-Service is a daily challenge?

Introduction

As-A-Service offers have become commonplace and are growing at an exponential rate.? There are 2 reasons for that: the global pandemic combined with a changed attitude from buyers themselves. Buyers want (and have in reality always wanted) to be sold to in a customer centric way. This is precisely what As-A-Service does: going the extra mile in placing focus on the exact needs of the buyer and aggregate them in one solution

However, changing from a once-off selling style to that of recurring revenue is one of the most challenging and overlooked aspects of entering into the As-A-Service market.

Some of the most common challenges seen in As-A-Service selling are repeated regardless of industry or scale:

1) The sales journey is too difficult

The As-A-Service sales journey is not the same as the standard transactional model one. This means that both seller and buyer need to learn and understand the new journey before there is a likelihood of it being sold or bought.?

The As-A-Service journey is enormously client-centric, not only in terms of initial client capture but in terms of an ongoing relationship. This means an understanding of not selling a once-off product but rather pivoting to selling the entering of a long-term relationship. This is driven by a strong focus on providing ongoing solutions and care for the return of a more stabilised and consistent revenue stream backed by loyalty.

Internally services need to be clearly defined ahead of time to ensure they are not given away for free. Simultaneously, the client’s needs, both present and future, should be well understood to maximise monetised up-selling solutions on a regular basis through the life on the contract, and more importantly, the relationship.

Whilst this may sound relatively easy on paper, the switch from product-selling to solution-specialist requires an entire mind shift from the most commonly embraced selling techniques.

Much of the As-A-Service sales journey places a large emphasis on up-selling, which pushes for sales champions to understand not only all the pain points and business aspects of potential customers, but also their own company’s growth strategy and future offerings.

This also emphasises the importance of technical or subject matter experts' involvement in the sales process. To upsell on service-based offerings such as maintenance, there is no greater individual to affirm the reliability and durability of products, regular maintenance schedules etc than those core to such areas. The traditional lines of sales and technical should work together for the ultimate provision of a wholesome client solution.

One of the key aspects of As-A-Service is the ongoing or post-sale interaction between sales/account manager and client. This allows for greater ongoing engagement and feedback.? This generates the forging of a strengthened relationship with fewer issues and more predictable success drivers. As human behaviour changes in terms of buying style from once-off to As-A-Service, so too does the requirement for an increased depth of relationship value between seller and buyer.

2) The salespeople are facing a larger decision-making unit that they are not used to

It goes without saying that the most successful salespeople are those that feel the most confident and comfortable in both their offering (what they are selling) and their selling technique (how they are selling it).

Part of this changed selling technique is an adjustment in the ‘selling to’ side of As-A Service. A transactional, once-off purchase offer, often relied on the buy-in of one individual with a set hierarchy and authorisation limit that the purchase should fall in the budget scale of. As-A-Service or the recurring transaction model usually involves an entirely new aspect of the selling technique: selling to a larger audience, often including the CFO, and sometimes including complete board-level pitching.

It is for this reason that salespeople need to undergo training: in the understanding of the sales journey,? in getting technical support when and if required, and? how to approach higher level pitches and subsequent questions they likely will not have previously faced.

3) The pay-plan is not adapted

“The Pay-plan of the sales force should mirror the strategy of the company”.

Seeing that the shift from product-selling to solution selling is a major step for your sales team, it should be reflected in their pay-plan.?

First “ignite the change”, after selecting a few champions that will be the individuals to initially propose the As-A-Service solution, their pay-plan should include a specific bonus when an As-A-Service contract is signed by new clients.?

The selling cycle will be longer than before, at least at the beginning, and this should be rewarded through a specific bonus. Due to an As-A-Service contract generating more margin for the company, a part of this extra margin should be invested in the bonuses of the pay-plan. Do not hesitate to do “double booking” at the beginning. Pioneers should always be rewarded!

Second, “bounce back on early success” where the company can capitalise on the first signatures, this specific pay-plan should be extended to the rest of the sales team.?

Another strategy, depending on the number of sales persons, could be to dedicate a specific team to handle As-A-Service proposals. In that case, a specific pay-plan for this team should be prepared. This pay-plan should integrate turnover and margin. The split in percentage between these two components will evolve over time depending on the company's strategy and according to commercial profiles.

Third, “focus on refresh strategy”. Once the machine is launched, the most important thing is to focus on the margin generated and the percentage of contracts that are extended or refreshed. Again, this will depend on the company's strategy; either it favours the margin generated in the short term or it favours the duration of the relationship with its customers

There are many challenges that sales teams face in delivering As-A-Service solutions to your customers. Their willingness and drive to do so will be based on their adoption of the company's vision, but more importantly, their commissioning plan.

Conclusion

Implementing a new business model requires an entrepreneurial mind set. The success of the model’s implementation relies on successfully obtaining the technical knowledge behind As-A-Service and how to fully implement, launch and sell the new model.

To this end, as with all business decisions, Expert advice is a minimal requirement any organisation should actively seek out before embarking on such a monumental development in their strategy.?

The excitement associated with the possibility of obtaining recurring revenue streams can lead to a rushed approach. However this type of ‘start with basics and run with it’ has a high propensity for immense frustration, pushback and ultimately failure and mistrust in the As-A-Service business model.

This is the essence of? Black Winch, founded by three market Experts boasting over 25 years industry experience, helping organisations to stay tuned with the structural As-A-Service market shifts.

We design and implement a successful, scalable and circular, in-house, As-A-SERVICE business, bringing value to your end-users and stakeholders.

Check out our?website to find out more on how Black Winch can hep you develop your As-A-Service offer or contact us directly:?[email protected]