Are Sales changing due to “product as a service”? I say yes. I have seen a shift and misalignment of sales processes that have led to a “pain” that had not been there before. I say it is time for Sales C-level, Leaders and Managers to act, let me explain.
The last years have felt different and strange. Especially regarding those CRM Sales and implementation conversations I have been taken part in. The conversations do not compare to “the good old days”. I had to ask myself the “5xWhy consultant trick questions” to figure out the real reason.
I have gone through it many times and have compiled my “understanding of what’s going on” below … have you felt the same? Then read on! If you agree or disagree, I love to hear your view, feel free to place a comment so I do not feel alone with this.
Sales changing: A shift and misalignment
I have been a consultant and seller of CRM IT systems for more than a decade. It has always been a challenge to implement, and Change Management has always had to be a companion… I have my battle scars and gray hair to prove it.
In the last year or so, I have started seeing, hearing, and feeling, a change coming in my own weird way. What all the companies with this “sales pain” have in common is that they are trying to sell their products through Self-service, Transactional, Enterprise, and Consumption methods, all at the same time.
Self-service: Customer does the decision-making, signing up, and using the product by themselves.
Transactional: Product sales that do not see value in long-term relationships with a customer.
Enterprise: Product sales that require personal attention and provide a tailored approach to succeed.
Consumption: No revenue is recognized until services are consumed.
Want to learn more about the sales methods and how they require different “system” support, then read this blog post Put 90% focus on Important Core Sales models, 10% on your uniqueness (iiu.dk)
Qualify opportunity, expand opportunity, Close, Repeat after a treat.My Morning self-motivation mirror speech.
Feel free to steal, Jens Kofod
No Sales changing going on here, they say!
What dawned on me in my many conversations with sales leaders was that most of them did not acknowledge that a bigger change was happening within the product that they sell. They just wanted to continue as “usual,” or they had no clue how to drive an organizational change. Many of them only knew how to execute 1 out of the 4 sales methods, which usually is the Enterprise model.
In short, the sales managers did not grab the opportunity to rethink and re-imagine their overall business of bringing in the sales. They did not –
- Take a broader look at their revenue-generating divisions and ensuring all are customer-focused.
- Set clear responsibilities.
- Try to fuel internal Support, Customer Success Units, Marketing and Sales division to working closely together (Outside of Sales we call this Teamwork, not sure seller has an official word for this 😋).
- See that teamwork is the reality if you want the Consumption model to work.
I then realized that sales management during the last 4 decades has had no training in Change Management as the sales method typical only “changes” every 10’th year and that none of the sales models have ever included internal Teamwork:
- 1980’ish Strategic Selling, Solution Selling, SPIN Selling.
- 1990’ish Value Selling, Customer-Centric Selling.
- 2000’ish RAIN Selling, Baseline Selling.
- 2010’ish The Challenger Sale.
The real Pain underneath a bunch of “product as a service” frictions
No matter which sales method is historically used, a salesperson is being measured against their ability to “Balance” and “Manage”. This is always done within his or her territory as a lonely wolf. “Balance” and “Manage” the sales pipeline is all about the salesperson’s ability to manage all their prospects at differing points in the sales cycle.
It is a task to keep a continuous flow of opportunities. The success criteria are that sellers should not have huge period-to-period swings in closed sales. They usually do that by using their ability to cold call, follow-up on existing leads, and close sales simultaneously.
The normal way to measure your salespeople does not apply if you knowingly or even unknowingly, mixing sales methods. Over time trying to mix all 4 sales method types mentioned above, the normal quarterly/yearly quota way to measure your salespeople apply less and less.
Sales measure frictions
In the short term, with a transactional Sales model – quarterly/yearly revenue target type of sales motion, the old school Sales hunters hunt opportunities and walk away from the customer once sold. They are geared for a longer sales cycle with big revenue wins. The idea of making small onetime transactional sales handshakes over time confuses traditional Sales hunters.
In the long-term, with the consumption sales model, revenue will fade into the future, waiting on “consumption” when customers are ready for that. The reason for this is simple; the revenue sales are waiting on “consumption” when customers are ready to consume the product or services you sell.
Waiting on an unpredictable future consumption date will affect the “Balance” and “Manage” of the sales pipeline. Waiting on an unpredictable future consumption date will make the seller look like they “cannot close a big sale”.
How will the pain show itself?
I foresee that we need to overhaul the Sales compensation models. If you do not, you will end up with unruly behavior in your sales organization. In the best case, you will end up with Salespersons stop forecasting anything until the last minute, and worst case, you will bring down morale as people cannot reach sales success.
On top of this, if you do not train your salespeople in Teamwork, they will not succeed with driving consumption. No Teamwork creates a deep “frustration” on sales supporting functions. Missing Teamwork will manifest itself in several ways hiding the real issue underneath a bunch of frictions.
Is it all bad?
As such, selling products through Self-service, Transactional, Enterprise, and Consumption methods sounds good and promising. But driving the change for one of those methods in a Sales department is a big task. Imagine trying to fit in all 4 models in an organization… the change management would be massive. What I believed accelerates the “pain” is that most companies are moving to have a product “as a service”. Product “as a service is our decades (2020’ish) “new thing”. “As a Service” bring focus to succeed with the Consumption sales method. So yes, Sales is changing due to “product as a service” and it’s not bad if you embrace the change.
The long read can be found in multiple books like this list of 35 Best SaaS Books of All Time – BookAuthority
Please write a comment below if you believe I have missed something or you just what to let me know that I am not the only one seeing change is happening.