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Tips for Rallying Your Team Behind Cloud Sales

Cloud Billing

Even experienced MSPs run into sales-compensation issues that can hamstring their cloud practices.

You might have 500 sales pros or just five. How do you incentivize them to sell cloud services? According to Morgan Stanley’s Brian Nowak, cloud adoption across the board is at a “tipping point,” with more than 20 percent of workloads now in the cloud.

During an education session, part of the business strategy conference track sponsored by Cyxtera at Channel Partners Evolution, Oct. 9-12, in Philadelphia, Nick Heddy, Pax8‘s senior vice president of sales and marketing, will share tips for incentivizing your team to sell cloud services.

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Pax8's Nick Heddy

Pax8’s Nick Heddy

In a Q&A with Channel Partners, Heddy gives a sneak peak of the information he’ll share with attendees.

Channel Partners: What are some of the issues regarding sales team compensation?

Nick Heddy: If the sales compensation is set up properly, selling cloud services can complement and drive the power of recurring revenue within your business; however, the organization must create fair expectations around compensation that will benefit your business and your sales team.

CP: Does selling cloud services complicate sales team compensation? How?

NH: Let’s consider the two compensation methods. A hardware sale is easy to consider because it is 1x the percentage of the margin. With cloud, the amount of compensation has to be motivating — you need to pay ahead of collections, it must be some multiple of the monthly margin, you need to take churn into account, and evaluate the months to pay back with regard to customer acquisition cost.

CP: What are some tips for incentivizing your sales team to sell cloud services?

NH: As a business leader, you need to share the big picture or vision with your sales team so they clearly understand their goals and objectives. Here are three tips to consider:

  • As the methodology, the Rule of 78 demonstrates, one salesperson winning just $1,000 of new monthly recurring revenue (MRR) can generate $78,000 for your business over the course of a year.
  • Your sales team’s main focus should be closing new cloud business without cutting corners or profit margin.
  • Monthly recurring revenue is different from the one-off sale and needs to be treated accordingly. It helps you build predictable revenue streams and eliminates the need for renewal conversations, resulting in capturing higher margins over the long term.

CP: What do you hope those attending your session can learn and put into practice?

NH: Cloud selling has so many benefits if you look at the big recurring-revenue picture. In this session, we will make it easy for your team to succeed with cloud selling.


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