Having an effective go-to-market model for marketing and selling Managed Services is critical to enabling successful growth. Many companies have solid Managed Services offerings, but don’t realize their full growth potential because of problems with their Services selling model.

Waterstone often see this in companies that have a legacy of core hardware or software products. These companies may have begun offering Services as an adjunct to their products, reliant on a selling model tuned to product sales. Then, as Services grew in scale and complexity, the companies’ sales models failed to adapt. It is common for such companies to have a single sales force that focuses on product and tightly-related product support services. These companies often don’t properly educate and motivate the sales team to sell Managed Services, and Managed Services sales are primarily “pulled-through” by product or traditional Services sales, such as Maintenance and Professional Services.

To ensure that Managed Services offerings reach their full potential in the market, there are five critical go-to-market elements that must be addressed:

1.      Managed Services Sales Specialists
Having dedicated MS sales reps is a key factor for enabling MS revenue growth. Given the complexity of MS offerings, these reps should have strong consultative selling skills in addition to technical offering knowledge.

2.      Sales Team Incentives 
The broader sales team must be incentivized to sell Managed Services. A clearly defined compensation plan that rewards for recurring Services sales is a very important contributor to MS success.

3.      Sales Training and Enablement
To sell MS offerings successfully, the core sales team must have a clear understanding of the offering, target customers, value proposition, differentiators, and case examples.

4.      Efficient MS Scoping and Quoting 
Efficient scoping and quoting policies and practices are an important enabler of MS growth. The key is to find the right balance between standardization and customization, where the broader sales team has the clarity and tools to do the initial qualification and not overpromise on SLAs.  

5.      Pull-Through of Product Sales by Managed Services 
Managed Services can become an offering in its own right and a driving force that pulls through hardware and traditional Services sales, particularly as more industries shift to X-as-a-Service. MS businesses should consider developing bundled offerings that include product as well as setting product sales targets for the business.  

Incorporating these five elements into your Managed Services selling model will power growth of your Managed Services business.

To learn more about this topic, as well as our MS Operating Model Framework and Maturity Continuum, please read our whitepaper Improving Your Managed Services Selling Model.

Today’s guest post was contributed by Eric Pelander, Managing Director at Waterstone Management Group, a boutique management consulting firm that helps technology companies and investors create measurable value by identifying and capitalizing on disruptive growth opportunities and by driving excellence in Services, Cloud and Customer Success. Follow Waterstone on twitter @WaterstoneMG, or sign-up for their quarterly newsletter to receive visionary insight.

Jennifer Carl is the Director of Software & Services Division Programs. Follow the Software team on Twitter at @SIIASoftware @SIIAJennifer