Selling Hosting in a Sophisticated Market
February 24th, 2010 By: Industry Perspectives
James MacDougall is a sales leader who has sold hosting strategically and managed hosting sales teams throughout the United States for more than a decade. His leadership, both in the US military as well as corporate America, has resulted in numerous awards for both himself and his teams.JAMES MacDOUGALL
No part of a hosting organization is unimportant. Indeed, many functions are independently critical and all are required for a complete and balanced service: Legal, Marketing, Product, Administration, Contracts and Finance, to name only some. But if Operations may be considered the head, then Sales is the heart. And it’s this central, systemic function – Sales – that so many organizations misunderstand to their detriment, and their customers as well. They get it grossly wrong and strangely (given its importance), many don’t even know why.
Hosting technology is evolving, but its sales methodologies have not kept pace with the industry’s sophistication. To be sure, blades, cloud, virtualization, SaaS and exotic managed services are today’s hosting du jour. Tomorrow they will undoubtedly look a bit different.
But what has changed in the way these are sold? Unfortunately, not much. Today’s sales teams need more than an appreciation of technological data center capabilities and how these affect customers, or even an understanding of the holy grail – i.e., the customer’s business model and buying criteria. Paradoxically, selling is not about selling. And equally ironic is that selling Hosting services is not about Hosting services.
Selling anything – but especially something as critical as hosting - simply boils down to helping the other guy through thick and thin, hand-in-glove, without complaint and for the duration of the relationship, not just until the contract ink dries.
If that concept is lost, then the result is typically what we see in the status quo of most sales organizations: Watery short-term funnel development lacking substance, unproductive or near-sighted opportunity pursuits chasing the latest shiny object, transactional commodification, and reliance on winning deals based primarily on a canned proposal over which the sales rep has little-to-zero control. The rep has no control because these offerings are substantially based on organizationally directed price and pre-existing data center operational capabilities, both of which are market driven (meaning you’re likely not appreciably different than the next provider) and you’re perceived as homogenous because all you’ve offered is the already assumed basic price of admission to bid.
There’s no service confidence exuded in such dealings and these aren’t differentiators. Every competitor does at least that. And those who think these are valuable differentiators are kidding themselves into failed ROI, unemployment, and doing their prospective customers a huge disservice by wasting everyone’s time.
Selling as a Lifestyle
Today’s hosting customers – yes, even “plain” colocation customers – are incredibly intelligent and they expect more. And frankly, given the complexity of what they’re doing and the options available to them, they need more. Accommodating this need is what I call Lifestyle Selling.
Lifestyle Selling is not selling to the rich and famous, or about achieving a certain status. Rather, it’s always selling; no matter where; no matter when. To be sure, it’s selling with zeal. But at its core it is selling with a servant’s heart. Lifestyle Selling is done because you believe it and it is the 24/7 fiber of your being. It’s not what you do as much as it is who you are.
Most hosting sales teams don’t implement Lifestyle Selling because they can’t. It’s not who they are, and the effort to become so is too difficult. Savvy customers know if you’re real; if you authentically care; if you are about them beyond yourself.
But if you demonstrate these qualities (which are rare and most probably absent in your competitors), then you have a resilient relationship that goes beyond the written contract; beyond the technology and SOW delivered; and even beyond the dreaded outage. And for those few who may still be myopically focused on money as the end goal, assuming the rest of the organization’s body parts are healthy, then Yes, you have an all but guaranteed future revenue stream because the lifestyle seller’s customers are not going anywhere and prospects are lining up.
Failure is Inevitable
Here’s an axiom that is no surprise: Technology will break and humans will fail. These are 100% guaranteed and unfortunately, they are also the two pillars on which data centers stand. The hosting organization that remains tall when these pillars sway are the ones who respond swiftly and correctly. Get it fixed, minimize damage, mitigate recurrence, and make it right.
It’s this last part – making it right – where Sales performs. The sales team who embraces Lifestyle Selling has prepared for the axiom’s reality because the sale has never ended. Hard times experienced by outages or billing issues are softened by the pre-existing and ongoing relationship germinated and cultivated by Sales. And the recurring revenue is protected since the lifestyle seller is deeper into the customer beyond the one or two contacts who inevitably leave their organization.
Never mind that the contract term will eventually end and a renewal will become necessary. The Lifestyle Selling sales team is ahead of the paperwork and has never ceased mutually collaborating with the customer at multiple levels. Never. For Lifestyle Selling teams, problem solving is far less painful and contract renewals are usually no-brainers. The Lifestyle Selling team not only generates revenue, but they protect it, as well.
Theory vs. Practice
I’d be surprised if any of these concepts are new to you, the reader. In theory it’s easy to buy into them, but in practice I know they’re hard because few sales teams actually operate this way. Even so-called strategic ones compromise and succumb to transactionalizing, too often yielding to burnout, low margins and turnover. Indeed, selling well requires tenacity, market and competitor awareness, and a slew of other traits comprising professionalism.
But the Lifestyle Selling team ultimately wins because it delivers beyond the norm and at a level deeply required by the customer. That’s not only hard, it’s scary since customers don’t care about your sales cycle and the end result (signature) is not always in hand nearing the last day of the month.
Beyond common know-how, Lifestyle Selling takes commitment, maturity and selflessness. It’s the difference between chasing what’s important vs. what’s urgent. In this fast-paced, what-have-you-done-for-me-lately hosting world, few sales professionals have the patience, courage and humility to actually serve to the level of customers’ needs. The objective math does not add up, but the principle is nevertheless true: Chasing and delivering on the important often solves for the urgent. Giving of oneself, as an individual and within a sales team, is what hosting customers need. It’s also what’s necessary to be a revenue leader.
No one reading (or writing) this is naive enough to think that businesses aren’t in the business of generating lots of money – even NPO’s. But the way to get there is not through undisciplined funnels, contracts and product. Rather, it’s through meaningful, long-term relationships consistently and tirelessly executed with delivery that pays off time and time again. That is value. And that is sales. Or more pointedly, it’s at least how hosting sales should be. Just ask a customer.
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James, thank you for this. Outside of our own organization, you are the ONLY one I’ve heard of who speaks of and grasps “Servant Leadership”. Refreshing and Inspiring!