It’s the 4th quarter for most of us in the software business. If you’re a software Sales Org, this is your Christmas, New Year’s Eve, and Superbowl all in one. Years will be made. Quotas will be exceeded. Commissions earned and earned again. All of which come with the requisite amount of stress, scrambling, and obsessing over every last deal and detail. Your friends from Tackle are in the same boat – and we’re here to help. Those of you who have an offset fiscal calendar can still benefit from the tips below – just with less December-centric stress on your heads ;).
As we all look for angles and advantages, there is no better avenue to explore than leveraging Marketplaces to drive deals. Looking to grow a deal? Looking to save some churn? Looking to find some hidden budget dollars? Follow us, friends. To help ensure your year-end is full of joy (and success), we’ve compiled a list of some Marketplace tips – enjoy the read and give us a call if you need help running any of these plays. Tackle has your back.
The Budget Flush
It’s no secret that companies are voting for the hyperscale Cloud Providers with their wallets. Every year, organizations you are selling to are dedicating budget dollars to their Cloud Provider of choice (AWS, Azure, GCP)…and there is goodness in that for you. Why? Because committed spend is generally use it or lose it. Better, when companies commit $50M, $100M, $200M to a Cloud Provider, there is rarely a concrete plan to consume all of those dollars. With many of these agreements expiring in Q4, there is often an excess of dollars left unspent. Purchases made through Cloud Marketplaces help to burn down committed spend, which means you can help your buyer meet their contractual obligations.
- PROTIP 1: Engage your prospect’s strategic sourcing group and find out if they have an EDP (Enterprise Discount Plan) with AWS, an EA (Enterprise Agreement) with Azure, or Google Commit with GCP. If so, make sure they know buying your software can help to count against their spend.
- PROTIP 2: Register your Q4 opportunities with your Cloud Partner. Then you can work with your cloud counterparts (eg. the rep who is selling to your prospect) to learn who their buyers are within your prospect’s organization. From there, you can target your burndown conversation at the person who it matters to the most.
The Diving Save
If ARR is the lifeblood of a SaaS company, churn is its kryptonite. How about some churn insurance? Renewing your customers who are in danger of churning (because they lost budget or had budget cut) by bringing their renewal through a Cloud Marketplace can offer your buyer access to a different budget. Budgets shrink, we get it. You know what budgets continue to grow? Cloud budgets.
- PROTIP 1: Suggest landing your renewal on your customer’s cloud bill as a means to tap into an alternate budget.
- PROTIP 2: Leverage the same motion (renewal via Cloud Marketplace) to suggest expansion to customers who want to buy more of your software but don’t have the budget.
- PROTIP 3: Combine the Budget Flush with the Diving Save and suggest a multi-year deal (with expansion) to maximize your buyer’s spend with you AND their cloud budget burn down.
Top Line Baby
One trend we are seeing as top Marketplace sellers really scale their business is extra attention on how Marketplace fees are accounted for. This also frequently comes up as a compensation discussion around keeping channel and Marketplace deals “comp neutral.” If you are closing a deal worth $100k and a hypothetical 7% Marketplace listing fee, are you booking $100k or $93k? To make the point, are you leaving $7k out of your top line, your quota achievement, and the resulting commission payment?
Savvy ISVs are making a change and shifting listing fees into cost of goods sold (COGS), driving up their top line performance and reducing any related friction to embracing Marketplace selling in their field organization. Your organization likely has a very good reason for how the dollars are allocated.
- PROTIP 1: If you are a sales leader and you are not comp neutral on your Marketplace transactions, use Q4 as an opportunity to incentivize your reps by going comp neutral (spoiler alert: You probably want to give it at least 2 quarters, but start with Q4).
- PROTIP 2: Keep an eye on industry trends. We are still in the very early days of Marketplaces and digital selling and new best practices are being discovered frequently.
Get Loud & Proud
There is no better influencer with the Cloud Providers than successful customer outcomes and related use cases and reference architectures. You have Q4 pipeline hanging in the balance and want the Cloud Providers to help you get those deals across the finish line. Guess what, so does every other ISV in the ecosystem. Why you? Simple answer: Because the solution you are offering delivers real customer value, as documented by your win at ACME Corp, who had a very similar use case, or was in the same vertical market, or saw a successful co-sell motion with a peer at that Cloud Provider.
- PROTIP 1: Market TO, not just through, your Cloud Provider relationships. Remember they have 100s of their own services and thousands of ecosystem partners. Don’t “expect” them to know you, to remember you, or to help you. Be specific in your ask and be prepared with the data to back it up.
- PROTIP 2: Know why it’s good for them. First stop, a great customer outcome. Second stop, the more consumption or native cloud service integration your solution delivers when it is consumed, the more it matters to the sales teams at the Cloud Providers. Third stop, they are very likely incented to work and win with the ISV ecosystem. Be familiar with those details.
By understanding the mechanics of your customers’ agreements with the Cloud Providers, leveraging the flexibility of Marketplaces, designing smart incentive plans, and/or making sure you’re clearly communicating your value to the right teams within the Cloud Provider ecosystems, you should be able to do what hundreds of your peers are doing in Q4: leveraging the Cloud Providers and Cloud Marketplaces to increase your chances of success and tap into the power of digital selling to smash your quota!!!