The cloud ERP sales value challenge - forget about AI; it's now ROI sales or nothing

Profile picture for user jreed By Jon Reed April 2, 2020
Summary:
Cloud ERP sales aren't dead - but they've changed practically overnight. Does ROI selling resonate where tech hype doesn't? Yes, but as Acumatica's Geoff Ashley explained to me, VARs must go back to the future first.

businessman-in-gap

I'll be honest: Geoff Ashley surprised me. When I talked to Ashley before I wrote Times like these require a different kind of cloud ERP partner, I didn't expect him to have specific advice yet on how cloud ERP go-to-market can move ahead. Obviously, the priority right now is helping people - not selling to them.

But Ashley did have two key pieces of "back to the future" advice for services partners - especially those that aspire to be modern VARs.

  • Get ready for BPR again, as companies redo centralized back offices processes that never had to function remotely.
  • The only cloud ERP sales tactic that's going to work is ROI sales. Show customers how they can fund their projects from within, based on your insight into their industry/processes - and how they can reduce costs out of the gate.

Full disclosure: the gratuitous shot at "AI" I took in the headline is from me, not Ashley. And it's not entirely fair, when you consider that most cloud ERP vendors, including Acumatica, work hard to help companies automate workflows (Acumatica has really beefed up its workflow engine in the last couple of years). But I think the push back is not on automation, but on the fancier/aspirational side of AI, where vendors sell "intelligent ERP" loaded with predictive promises. That isn't going to fly right now. As I wrote:

Typically, cloud ERP sales are done in an environment where some discretionary budgets are available. In recent years, excitable banter on AI capabilities and real-time operational analytics might have opened some doors. Now, if you assume frozen budgets, Ashley is telling his partners you can still go in.

For ROI selling, start by listening

And how do you go in? With some type of ROI sale. The onus is on the services partner to sell how the project can pay for itself - and then some. As I see it, this is the "fund from within" sales model, combined with elements of The Challenger Sale, which requires considerable expertise and creativity on the sales team's part.

I followed up with Ashley on the art of asking the right questions. Assuming the prospect sees you as an advisor (translation: gives you the time of day, and actually takes your call), isn't the next step to really draw them out? Otherwise, how can you possibly understand what they are going through in this turbulent moment? Turns out Ashley just conducted a webinar for Acumatica partners about this. As he wrote to me:

For ROI selling, questioning skills are essential.

For Ashley, ROI selling is a throwback skill. Ironically, it's one that modern VARs need now:

My message to the partners was this: Think about how our industry got started. The entire SME ERP marketplace exists because of the Intel processor.  Before the Intel processor, everything was done in a "glass house."

When I started in sales, the deals were huge.  We were talking about mainframes and minicomputers.  Million-dollar deals and up. So we HAD to learn how to sell based on return on investment. So when I started in sales, we had a very specific skill set.  But the PC was sold to departments and eventually to small businesses.  They can't afford to pay for "Value Engineers" to come into their businesses and charge huge sums of money to find out how much money they will eventually save.

 And how does the questioning part fit in?

Over time, the skillset was lost.  What was also lost is our ability to question effectively.  Again, if you think about it, when you try and get a prospect to quantify their problems or issues, you have to be very good at questioning in order to take them down the journey you need to go down. 

"All the sales techniques we've learned are just wrong"

Beyond the Challenger Sale model, I referred to Ashley's prescriptive sales approach. He embraces the SPIN model:

  • Situational
  • Problem
  • Implication
  • Need/Payoff

Asking the right/informed questions is everything:

The larger and more complex the deal, the better you need to be at questioning.  And ERP is about the most complex business application out there!

Ashley also buried the always-be-closing sales push - a horrible approach for cloud ERP to begin with, and one that is particularly tone deaf now:

I also told the partners today that ALL of the techniques we have learned over the years are just wrong. 

Such as?

  • Qualification (BANT)
  • Handling Objections
  • Closing Techniques

This isn't going to fly:

All of these "strategies" were initially created in the early 1900s!  They were used by the men out selling pots and pans, brushes (remember the Fuller Brush man), and vacuum cleaners (remember Electrolux).  They sold door-to-door, and if they couldn't get you to buy in 15 minutes, they didn't get the sale.  They were off to the next house, and then the next street, and then the next town. 

Since they paid for their inventory BEFORE going on the road, if they couldn't get you to buy, they didn't eat!  So the "techniques" were aggressive, and they were made for a 15 minute sales cycle, not a six month sales cycle!   So you can see how screwed up our "profession" is and has become.

Add ROI selling to the modern VAR framework

Will Ashley be adding ROI selling to his modern VAR framework? He laid that framework out in his diginomica series, starting with The modern VAR - it's time to transition from professional services to a 21st century business model

But my real question for Ashley was: isn't this also a good time for VARs to re-evaluate where they stand, versus the modernization they need to achieve? I've seen it countless times: just because you sell cloud software, doesn't make you a modern VAR.

Yes, VARs must help companies rethink their processes, with remote work enablement in mind. But that's just a start. As Ashley said to me:

Everything that's happening right now is reinforcing everything we've been saying since I came on board in 2018, around this whole transition from on-prem to the subscription model, which is: what does the practice itself need to look like? What does the practice itself need to morph into?

It was the same before all this hit, but it's just now been magnified: the partners need to become better at it.

Ashley's good news: the things partners need to get better at are finite. It's about better pipeline management. And: it's also about serving up a better "experience":

Whether it's a prospect or a customer, what is the experience? The shortcut for that is content. Everything has to be packaged now. When they go to your website, can they self-serve? Can they make the decision without having to talk to a human? How do you go to one-to-many if you don't do that? So you've got to have content for that.

It doesn't stop there. Then you have to deliver a good implementation - a topic until itself. Next up: potent questions on the development of industry IP, and building apps to extend it. And: building a customer community around your specialization. Those are advanced VAR ambitions I enjoy debating with Ashley - and will return to.