Top Five Pitfalls to Avoid When Selling the Cloud
Amazon has dropped the price of their Cloud services more than 19 times in the last 5 years
Jul. 9, 2012 03:15 AM
As the organizations involved in traditional sales of shrink-wrapped software enter the Cloud business, they face a challenge dealing with the new paradigm. While the best practices of selling do not change much, they need to get comfortable pitching, positioning and selling the new ‘anything as a service’ model. Based on my experience, I am going to touch upon some of the pitfalls that can be avoided in closing a sale. These are not only important for the sales teams of Cloud service providers but anyone who is a part of the Cloud ecosystem.
1. Lack of grip on the pricing models – Traditional software release cycles are long and the price will not change for a long time. Once the sales team understands the SKU, price points and the licensing options, they will be able to confidently position the product to a diverse set of customers. Enter the Cloud and they have to deal with a price point that only drops once every few months and sometimes just in a few weeks! Amazon has dropped the price of their Cloud services more than 19 times in the last 5 years and the competition follows the suit. Knowing the latest pricing of various services including storage, compute and bandwidth is critical for the Cloud sales rep. He should be able to quickly identify the paid vs. free components of a solution that’s being considered and come out with a ballpark cost estimate that closely reflects the monthly bill of the customer. For example, AWS offers a free tier, which doesn’t charge the customer up to a specific threshold during the first year. Discounting those components from the estimate will show a significant cost benefit to the customer. Knowing what is free and what is charged is important for the sales team to accelerate the sale.
2. Inability to position the right solution stack – Though this is often differed to a presales specialist or a solution architect, every sales rep should be able to articulate the value of Cloud and do an elevator pitch of each service in the stack. Anyone who is in a customer facing role involved in selling the Cloud should be able to connect the dots and pitch a high level solution. Most of the sales reps harp on the CAPEX factor. But the fact is that the customer never considers the Cloud only for the cost advantage. Articulating the core value of Cloud in terms of the ability to automate, shorter mean times between failures and elasticity is absolutely critical to win the customer confidence. Knowing the complete stack that is rapidly evolving is a big challenge for the sales teams.
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