Managed Services: Top 5 Rookie Sales Mistakes

It’s the biggest challenge facing managed service providers: How do you transition your sales force from transactional selling to managed services solution selling?

Here are the top 5 mistakes we’ve seen companies make during the transition to managed services, along with some corrective actions to get you back on course.

Of course, managed services sales are more complex than transaction selling. It requires a sales person to call on business stakeholders and articulate a solution to a business problem. Unfortunately, many computer / software sales reps are more comfortable selling product features to IT people. After working with dozens of VARS and their manufacturers in this area, we’ve come up with the top 5 rookie sales mistakes in the MSP market.

Mistake #1: Reps don’t call on the right senior decision makers:
Managed services are best sold to CFO or financial types as well as CIOs because the managed service value proposition resonates with this type of stakeholder. However, most reps in the channel today are only comfortable calling in IT Managers. One of the executives we work with said, “We have blue collar reps calling on blue collar stakeholders.”

Mistake #2: Reps don’t present the appropriate questions and value propositions:
Simply put, a CFO doesn’t care about the same things a CIO or IT manager cares about. Talking about cost savings to IT Managers doesn’t hit home at the same level as it does with a CFO. IT Managers will claim they care, but it’s not what keeps them up at night.

Mistake #3: Reps are not proactively seeking out customer business problems:
Instead, they mostly just react to customer requests. Most reps have relationships at the mid-level IT today and do not actively seek to understand the key business issues at their customers / prospects. Relying on IT to bring orders / new opportunities to the rep is a sure way to lose mind share or market share in an account. Reps need to be educated on what business problems might exist at their prospects / customers and how to probe for those issues.

Mistake #4: Many reps do not know how to effectively execute a first call with a senior decision maker:
In a recent study from LogicBay and STM 360, we found that top reps selling managed services closed 43% of their pipeline, while average performing reps closed less than 15%. We can track this success most prominently to what happened (or didn’t happen) in the first sales call. Top reps know how to “tee up” a successful sale cycle, while average reps don’t generate confidence in the decision makers and tend to “go along for the ride.”

Mistake #5: Rookies focus only on cost savings:
When getting an appointment, during the first call or throughout the sales process, rookies tend to focus only on the cost savings. While this is an important aspect of selling managed services, it typically doesn’t push senior decision makers over the edge in favor for your solution or perhaps any solution.

Reps need to determine what other decision criteria (service, security, etc) are important to the stakeholders. These decision criteria are often more important than potential cost savings.

In the weeks ahead, the “Al and Mike” guest blog will cover such topics as:
• How top reps analyze and attack their territory
• How top reps get in the door with senior decision makers
• How sales reps approach executive level sales

Guest blogger duo Al Rosenbaum is the EVP of Sales for LogicBay and Mike Stankus is the CEO and professional sales coach with STM360.