You may be asking yourself one of two things right now: “Who in the world is Princess Sofia and why am I reading this blog…” or, for those of you with young children in the home, “What is this crazy talk about Princess Sofia of Enchancia and MRR?!? Those should never be uttered in the same sentence…”. You are probably right, but let’s try and justify it.
I recently attended a Sales Simplicity Seminar with Alex Rogers, Founder and CEO of Chartec and ARRC Technology. He asked the group, “How many reasons does a customer need to buy?” The answer was immediate, everyone yelled out “ONE!” And while this is correct on the surface if you are hoping to have a successful Managed Services sale based off of one reason you are in for a long and bitter sales journey. Sure, one reason is a great, but when selling MRR at a premium you better be coming with more than one bullet loaded. To be successful, you must clearly communicate how your solution impacts the daily tasks of everyone in your client’s organization and have a sales strategy to maximize the number of reasons to buy.
To best illustrate this concept, let’s consider a cable/satellite bill. Mine comes in at about $170 a month. Now, my Uber-High Speed Internet to facilitate my nerdy League of Legends gaming habits takes up $40 of the $170 monthly bill. So for the small monthly fee of $130 I get 300+ channels and am likely only watching 15-20 channels 95% of the time. So why am I throwing $130 a month for 15-20 channels?
Let’s take a quick look at the cable offering and the consumer demographics in the Rozeboom household. We will start with my manly viewing schedule that includes ESPN, HBO (#GameofThrones), and Starz outside the normal ABC, NBC, & CBS. Is that worth $130 per month on its own? I can tell you if I was a bachelor, I’d think hard before forking that out for a couple sports channels. Add in a few other channels containing some kind of reality TV for my wife and Animal Channel for my son, and I’m still not getting to the $130 per month. So how did they do it? Well, the funny thing is the cable company was brilliant and made sure I couldn’t get HBO, Animal Planet, Starz, ESPN or the reality TV show package with the Disney Channel included.
The kicker is that the Disney Channel trumps all and is easily worth $130 a month all on its own for my 2 and 8 year old daughters. Undoubtedly there is a time every day where all 3 TVs in the house are tuned into Princess Sofia at the same time. In the end, $130 a month wins and everyone is happy, especially Disney. So congratulations Cable you won the recurring revenue contract of $130 per month because of two beautiful, sweet little tyrants that hold my wallet hostage with Princess Sofia.
So how does this translate to selling MRR to your clients? In the example above, Princess Sofia trumped the rest of the reasons to buy. However, each stakeholder had their own unique motivation behind the decision to purchase. Similarly, it is critical during your sales process to unearth as many reasons for stakeholders across the organization to buy your solution.
Too often, Solution Providers focus in on a specific need that a C-level contact expressed and craft our entire message around it. Then in the close we subsequently say, oh yeah and by the way our Managed Services also covers this, that, and the other. The problem is we haven’t even found out if this, that, and the other has any relevance to anyone in the organization or could even be considered reasons to buy because you haven’t tied it to an expressed need. All of a sudden you are selling something that is not relevant.
This, my friends, is the moment sales begin to fall apart.
Responses like, “Wow, that’s great that you cover all that, but we don’t need 24/7 help desk so how much can you shave off?” or “Hmmmm, that sounds like a Cadillac solution, we are more of a Ford type company.”
The discovery is more important than most Solution Providers think. This is your best opportunity to discover most of the needs across organization. The discovery lays the foundation for a knock-out proposal, which in turn will close each of the people in the room and result in a healthy margin on the sale.
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- managed services
- recurring revenue