How Selling the Cloud is Different

Posted by Alana Kadden Ballon on Jun 17, 2013

Last Friday, I attended Salesforce’s Company Customer Tour in New York City. Several of our clients had booths, and Silverline was featured on the main stage! It was great to watch them shine.

Salesforce pairs these customer and partner events with recruiting events, so I met several of their candidates throughout the day. I was discussing selling enterprise cloud applications with one confident candidate who remarked, “Cloud? On-premise? I can sell anything, it’s all the same.”

I couldn’t disagree more. Here are four things that you should do differently when selling software for the cloud.

1) Inspire Evangelical Passion

When Marc Benioff founded salesforce.com in 1999 he declared it “The End of Software.” 14 years later, he has over 100,000 customers and 2 million subscribers. While technological change has played a part in enabling that success, the more crucial changes have been cultural: how customers and employees feel about the companies they work with.

Years ago, a close friend in the industry told me, “Something about Salesforce makes you not just want to use it, but to convince others to use it as well.” Successful cloud companies imbue their teams with an evangelical spirit. In their message to customers and in their training of new recruits, they charge people to take to social media and share amazing stories of customer success, product innovation, and job opportunities.

If you can bottle your founders’ passion, vision and spirit, and share that with your growing team, you will be unstoppable.

2) Prioritize Customer Success

The success and growth of cloud companies relies on high customer renewal rates. While on-premise software companies make most of their money upfront, cloud companies’ subscription pricing model spreads the cost of the platform out over the course of the contract. Over time, most of a cloud company’s monthly revenue comes from existing customers; only their marginal growth comes from new subscribers.

In a customer’s first year, as they are getting set up on the tool, customer support and services must be more involved to ensure that customers (and their revenue) renew with the product, providing the fiscal base for company growth. This provides great alignment for customers who don’t want to be forgotten after they sign the contract: they know their satisfaction with the product is key to their vendor because the company needs renewals to drive their business.

Most cloud companies strive for a 90%+ renewal rate. This drives the behavior and compensation of sales and support teams and has driven the creation of strategic customer success teams at most cloud firms.

In the cloud, more than in on-premise software, customer success is required.

3) Embrace Constant Change

In traditional software, releases happen about every eighteen months, with some customers choosing to remain on the legacy platform and others going through months of painful upgrade to the entirely new system. In the cloud, customers are upgraded overnight or in a few minutes, by simply provisioning new features to their existing system. Because of this relative ease, new releases are deployed to customers several times a year.

This constant change means that your sales and services teams must learn to discuss, demonstrate and differentiate both on the release cycle and new platform components. The messaging a cloud software team delivers when speaking to a customer will evolve much more quickly than traditional software because the product will always be changing.

Rapid product change means constant messaging evolution.

4) Play Competitive Wack-a-Mole

The cloud software market and competitive landscape changes constantly. Often, the most crucial part of an enterprise software sale is garnering executive buy-in; in that sphere, the battle against traditional software solutions is especially challenging. Traditional software companies are either poo-pooing the cloud in specific spaces or adopting a “me too” hybrid strategy of cloud and on-premise. To succeed, reps must make sure that executives understand and define ‘cloud’ solutions the way they do.

Differentiating your value proposition from the competitive field, which can be crowded with companies popping up and disappearing quickly, is key to continuing to grow your customer base and feeding your success engine. Cloud competitors can quickly build a user interface and marketing machine, creating a lot of noise, but backing it up with true client success will set you apart from the pack.

In the cloud, focusing on the core value proposition will allow you to shine among constant competitive change.

What else makes the cloud different? Share with us what you think!