Making Money on Pre-Sales Cloud Services
A best-in-class pre-sales team anticipates and evaluates customer needs, guides customers’ business transformations, and boosts profitability.
By Jennifer D. Bosavage
It’s no secret that professional services are fast becoming a mainstay of solution provider operations. According to the State of the U.S. Cloud Channel, a research report written by The 2112 Group in collaboration with Ingram Micro Cloud and Microsoft, 94 percent of solution providers offer professional services that support their vendors’ cloud portfolio. While 63 percent offer post-sales services around the cloud, less than half – 48 percent – deliver pre-sales services such as needs assessments, audits, and cloud migration planning.
In sales, the most important act is closing the deal. Following up with high-caliber post-sales services is critical given the increasing importance of customer retention to solution providers adopting a recurring revenue model. But closing deals is far easier with the help of a dedicated pre-sales team.
What many solution providers don’t realize is the importance of a pre-sales team’s ability to shape conversations with the client. Charged with assessing and identifying customers’ technology needs at the outset, the pre-sales team is able to create maximum customer “stickiness” by fulfilling the role of trusted advisor. They add value by lending their expertise at every step of the potential customer’s decision-making process.
Evangelizing solutions in one’s own portfolio is par for the course, but this isn’t about disingenuous salesmanship; it requires an investment of time and resources to gain a solid understanding of the client’s needs, and then piece together the elements of a solution that can address those needs efficiently.
A study by the Harvard Business Review validates the hypothesis that a terrific pre-sales team can have a major impact on deal closes: HBR found that companies with strong pre-sales capabilities consistently achieve win rates of 40 to 50 percent in new business and 80 to 90 percent in renewal business—well above the averages.
What’s more, pre-sales services can lead to more extensive, higher-value cloud engagements. Research by 2112 reveals that solution providers generally undersell complex cloud services in favor of more commoditized ones, such as hosted e-mail and cloud-based backup.
Well-versed pre-sales teams can promote the benefits of cloud services with the potential to yield greater professional and support services sales potential. Those include business administration and enterprise management applications, cloud-based development platforms, and virtual desktop services. By breaking free of the gravitational pull of commoditized services, solution providers would set themselves apart from competitors and enhance their profitability.
The perception of pre-sales as a loss-leader is misguided. By instead viewing pre-sales as the vehicle by which consultation and design services are delivered to customers, solution providers can redirect their focus and build their bottom lines.
Jennifer D. Bosavage is a writer for The 2112 Group.