How Inside Sales is Affecting Cloud Sales Success

April 21, 2016

“Bottom Line Margin to Top Line Revenue”:The Evolving Value of Hi-Tech Inside Sales

Tim Killenberg, SVP-Sales + Marketing @ N3Sean Ryan, Principal @ Alexander Group, Inc.

Copyright N3, LLC No part or process to be used without permission.

A Shared Passion for Technology Sales Success

• 10+ years of global outsourced Inside Sales execution

• Technology + Software focus; Cloud Sales expertise

• Demand Generation + Full-Cycle Sales partnerships with Microsoft, IBM, HP, Dell and more

• 30+ years of sales effectiveness consulting

• Heavy focus on high-tech sector

• Dozens of Inside Sales engagements with both "new-build" and existing IS organizations


Key Themes…

• Technology has Transformed Buying and Selling Behavior

• Cloud Technology is Radically Changing GTM Strategies

• Roadmap for the New Inside Sales Model


Technology Transforms Customer Buying Behavior

• Services are bought and delivered when and where the buyer needs them

• Buyer only pays for the portion of the services they use

• Buying the service is easy to do independently

• Buying process allows you to pick and choose services vs. “all in”

• Buyer is not responsible for the cost of maintenance associated with the service


Cloud Technology is Changing GTM Strategies

• OpEx vs. CapEx

• Monthly Subscription vs. Million $ Metal

• Low Cost of Entry / Exit vs. “Moat Mentality”

• Unlimited Target Market vs. Enterprise-centric

• Individual Buyer vs. Buying Team; LOB vs. IT


How is Cloud Redefining GTM Sales Opportunity?

• Net New + New Revenue Levers

• Multiple/Differentiated Sales Motions

• Scale + Speed of Voice of Customer

Territory Coverage

Enterprise Mid-Market SMB

Adoption

Sale

Consumption

Retention

Sal

es S

kills

et

InsideSales

FieldSales

Insight

Inside Sales value evolving to “Top Line Revenue” and “Specialized Sales Skills” vs. “Bottom Line COS Margin Efficiency” and “Early Stage Lead Gen”


Sales Roles are Becoming More Specialized

THE TRADITIONAL SALES STRATEGY MATRIX…

Pro

spec

tsC

usto

mer

sBuy

ers

Products / Services

Current New

Today’s Rep Focus

Pro

spec

tsE

xist

ing

Clie

nt /

New

Buy

erE

xist

ing

Buy

er

Buy

ers

Products / Services

Current New

…HAS EVOLVED TO REFLECT CLOUD BUYING PROCESSES

Hunting in the Wild

Hunting in the Zoo

Customer Success

Contract RenewalsSource: AGI Cloud Sales Index (2014-16)

New Buying Motions Require a Portfolio of Cloud Selling Roles


Essential IS Roles for Selling in the Cloud

Enterprise Mid-Market SMB

Adoption

Sale

Consumption

Retention

Sal

es S

kills

et

ICSM

Territory Coverage

Qualification

Lead Gen

ISSIOGR

IOGR: Inside Opportunity Generation Rep• Opportunity ID (below Enterprise)• Communicate value to customers, qualifies beyond

BANT• Convert Opportunities into Revenue

ISS: Inside Sales Specialist• Pre-sales Technical Support• Convert Opportunities into Revenue• May also support Renewal efforts

ICSM: Inside Customer Success Manager• Drives onboarding and adoption• Ensures solutions are creating customer value• Creates a hedge against competitive threats

Source: http://www.alexandergroup.com/blog/inside-sales/the-rise-of-inside-sales-and-three-inside-roles-you-should-consider/v


Sales Roles Deployment by SegmentTraditional SW Vendors are adding Inside resources, particularly down market, attempting to mirror models that Pure Plays have mad successful

Source: AGI Cloud Sales Index (2014-16)


Customer Needs + Economics Drive IS Proliferation

1. Transactional sales motion

2. Mature customer relationships

3. Unworkable account spans

4. Unproductive Field prospecting

5. High nurturing requirement

Traditional Inside Sales

Criteria

Cloud Accelerators

1. Multiple (dispersed) influencers

2. Shorter sales cycles

3. Smaller initial deal size

4. Try and buy acquisition

5. Easy demo configuration

Source: AGI Cloud Sales Index (2014-16)

2014

2016

$-

$200

$400

$600

$800

$1,00

0

$625

$950

$450

$750

InsideOutside

Average BD Rep Annual Contract Value

(all participants, $K)

Gap between Outside and Inside productivity per rep declined from ~30% in 2014 to ~20% in 2016

Factoring in IS cost advantage- Inside Sales selling motion is ~16% more efficient on a bookings yield basis than Outside


KPIs for Inside Sales Success in Cloud Marketplace

• Conversion: Quota-based Revenue Delivery vs. Lead Generation

• Competency: Sales Acumen across Acquisition and Consumption

• Coverage: Segment-specific Fluency vs. Volume Management

• Contribution: Scale Potential to Drive Financial / Strategic Growth

In a recent Alexander Group survey*, 1,300+ Field Sales Reps estimated that about 70% of their contact time with customers was over the phone, email or

video-conferencing, begging the question, what is the difference between field and inside sales?

Source: http://www.alexandergroup.com/blog/inside-sales/the-rise-of-inside-sales-and-three-inside-roles-you-should-consider/


KPIs for Outsourced vs. Insourced Model

• Extensive Cloud Sales Experience

• Proven Cloud Sales Expertise

• Consistent / Compelling ROI Delivery

• Scalable / Global Platform

*Source: SiriusDecisions

In a recent SiriusDecisions report* on outsourcing Inside Sales, “…for long-term success, marketing and sales leaders should foster a more holistic relationship that embeds the vendor as a true partner operating as an

extension of the organization’s team.”


Microsoft Azure Case Study

Azure Goals Results• Accelerate adoption of

Azure by converting free trials to ongoing paying customers (ACQUISITION)

• Enable current customers to increase consumption (CONSUMPTION)

• Increase overall Azure revenue (ROI)

N3 Deployment• Deploy team of LOB and IT

Inside Sales Experts in 5 countries in 4 weeks

• Segment sales motions across specialized team resources covering Buyer Journey + Revenue stages

• Leverage MAP strategy to prioritize and customize sales engagement

• Drove 10s of 1,000s of net new Azure customers

• Delivered +115% of Revenue goal for two consecutive years

• Over 83% of program revenue attributed to Tele-Sales motion


Roadmap to the New Hi-Tech Inside Sales Model

1. Don’t Just Challenge “Conventional Wisdom”, Change it!

2. Race to the Top vs. Focus on the Bottom

3. Buyer AND Seller Journey Never Ends

4. Invest in Expertise

5. Speed to Scale

How Inside Sales is Affecting Cloud Sales Success

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