Managed services providers have a lot at stake. With longer sales cycles, higher cost of sales, and high risk/reward of the opportunities, providers must not take the “same old sales” approach. Providers can realize significant ROI from deploying the proper sales model and building a sales team equipped with the right skill set.

The discussion about a sales process and the characteristics of the person that can execute it must start with a clear understanding of the buying and selling engagement. There are two dimensions to evaluate this: The continuum of solution complexity and the product-service distinction.

Figure 1, the Solution Complexity Continuum, illustrates how 12 sales engagement criteria change along the continuum of complexity of the solution being sold. The left side of the continuum describes the environment where low-complexity solutions are sold—unit products with little or no competitive differentiation. The right side describes the environment of high-complexity solutions that may be hardware, software, services, or, often, combinations of them. Managed services certainly resides to the right side of the continuum. This illustrates clearly why all sales aren’t the same. It is easy to see why and how the sales engagement is different. 


 
  
In many ways, selling a complex service is similar to selling other complex solutions, even hardware/software/service bundles. One would make the same judgments from the Solution Complexity Continuum for any of them. But there are differences between selling a product and selling a service that must be considered. Figure 2, The Product vs. Service Distrinction, shows this.
  

Selling a service involves items that are unique, or strongly pronounced, compared to selling product: governance, contracting, trust, selected sales tactics, risk, and a focus on outcomes. These items are also emphasized to a greater or lesser degree along the complexity continuum. 

Together, Figures 1 and 2 help us define the process and people for selling managed services.

The managed services sales process should be defined by these 10 principles:
  1. Profile the customer situation early.
  2. Ensure executive engagement.
  3. Demonstrate strategic alignment.
  4. Focus on how value is created for each customer.
  5. Understand and set expectations.
  6. Involve the operations team early.
  7. Relationships are critical: Demonstrate alignment of goals and values, and outline a relationship management process.
  8. Financial acumen.
  9. Don’t discount intangible benefits.
  10. Address risks forthrightly and find mitigation.
 
 
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Bill Hall

About Author Bill Hall

Bill Hall is co-founder and partner at Pretium Partners, a TSIA Consulting Alliance Partner. He is responsible for business development, designing client solutions, and managing client relationships. For the past 20 years, he focused on developing sales talent management solutions that improve client sales productivity. He is one of two lead instructors and has taught thousands of sales professionals in companies of all sizes around the world.

After graduating from the University of Virginia with a BS in mechanical engineering, Hall began a 30-year career in sales and marketing. His expertise was developed in technology solutions sales, worldwide services marketing, and services management.

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