Building a Successful Digital Practice

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When Tony Robbins asked James Altucher (entrepreneur and blogger) what he feared most James’ response was “losing all my money, and that my girlfriend will leave me.” Turns out loneliness and social humiliation top the list of fears no matter who you are.

When I was hired to build a digital practice at a VAR those fears ran rampant. I remember being asked by the CEO to present to the entire company in just my second week. I spent a great deal of time developing my speech, but right after I gave that presentation my CEO came to me and said “what the hell was that? That sucked!”. Apparently, I bombed. I would have taken death over social humiliation at that point, but the urge to throw up overwhelmed all other feelings.

It would take a while before I understood how to position my practice and the nuances of messaging differently to sales teams, engineers, vendors, or customers. Fast forward 3-years and I was successful in turning that into one of the most profitable business-units in the company, helping to revolutionize their services and becoming a significant part of their overall revenue.

Even better, the team I built won the respect of sales teams and executives alike, and we became the go-to digital partner in the industry. We had blazed the new digital trail, breathed new life into the VAR, and created a multiplier for their valuation.

Building a business within a business

While starting a new business is a challenge, building one within the walls of another adds another dimension of complexity. Within an established company, there are a number of entrenched forces to overcome. Survival depends on getting the big players, the big reps, and their big accounts to come around to the new offerings.  You can’t just create a splinter team, close a few deals, cross the chasm and run. You have to throw a bridge behind you and bring the rest of the company along.

When a practice is in its infancy, revenue is not the benchmark; it’s relevance. Relevance with the customer allows you to participate at different tables, tell a stronger story, and translate that into a true trusted advisor position. Don’t get me wrong, revenue is essential, but a superior mind-share with the customer will allow you more opportunities to step in front of the customer to generate wallet-share and gain cachet with the reps who will afford your practice the runway to figure things out and pilot it to a place where it can generate significant revenue.

If your sales reps are not excited, your practice doesn’t exist.

A VAR is made up of a group of sophisticated sellers with an ecosystem built around them to serve their customers. These sales reps rely on these accounts. That’s the asset that they have worked extremely hard to earn and cultivate, and it’s how they make their living. For them to walk someone brand-new into the account is asking them to introduce risk into their lives. They would rather keep selling what they’re comfortable with, even with dwindling margins, before taking a chance on something unproven that might go sideways.

Most VARs tell me that they already have a digital practice. Whether it be in cloud, DevOps, or analytics, they can do it all: consulting, implementation, advisory services and more. It seems perfect until we ask their sales teams. What we find is that sales teams typically do NOT trust the practice enough for it to earn their focus. They may trust individuals who can “show-up” in front of a customer, but this results in a splintered go-to-market and inconsistent results. Sellers carry the burden of generating the revenue that is the lifeblood of the company. If the digital practice cannot consistently produce for them, they will regress into their old, aging ways of attaining revenue.

One of the most critical stages in launching a successful practice is getting to know your reps. What do they typically sell, what relationships do they have inside their customer, what vendors do they partner with, what is their quota, how do they reach it? You need to spend a day in the rep’s shoes so you can understand how they operate and gain their trust. Only then will they share with you their prized assets, their customers. I’m amazed at practice-leads that neglect this step and then bemoan that the reps “don’t get it.” If your practice does not feature prominently on weekly sales calls, then it doesn’t exist.

Build a Strong Pitch: Simplify but differentiate

Another common mistake we see at partners is they hire some bright person, usually a technologist, who has tremendous experience but fails to put a compelling story together. If your central theme is something like “we are Docker experts” you will be introduced to the me-too graveyard and join the litany of VARs that came before you.

An effective technical pitch captures the audience by simplifying complex concepts into something relatable while allowing you to differentiate yourself at the same time. You have to hold the customer interest by understanding their true pain-points and establishing credibility up front. This simplification not only helps make it digestible for the customer, but it also allows you to easily share the message to other members of your team which is vital for scale.

That was a great meeting, what now?

How many times have you been in a meeting with a technical lead who does an amazing job on the pitch and gets the customer excited only to leave the rep wondering “what’s next?” Even once you have gone through that painstaking ordeal of having a pitch land, you need a simple next step that does not feel like picking paint colors from thousands of options.

There has to be a next step that is easy for the customer to take. It took us a while, but at Xentaurs, we eventually discovered that a 1-day workshop was a great way to get the customer started. We call it the date before the engagement, a way for both you and the customer to get to know each other before committing. Unlike a typical workshop, the primary goal is to find alignment between the various factions of the customer which helps them focus on the bigger goal and what specifically they can do to move that forward.

For VARs who already have workshops, I ask a simple question: how many workshops convert to a follow-on engagement? If the number is below 50%, then your workshop is not effective, or the follow-up offerings are not compelling. Experiment with smaller offerings that effectively become an appetizer before the meal and you will convert great meetings into real engagements.

Nurture the practice like a child

Think of your practice like a child. An infant’s needs are very different than a teenager’s and vastly different from that of an adult. And it’s not until that last stage you can truly monetize and compete. Understanding what you need to do at these various inflection points and when to push to the next stage is critical. Everyone loves to hold an infant but it needs a constant level of care to survive. When your practice is in its infancy, it should be marketed aggressively but only made available to a fraction of reps. Once you’ve had a few successes, you now have a platform to launch wider, and nothing motivates reps like jealousy.

Practice leaders have to align with leadership around time horizons and revenue goals that are realistic, all while building the trust of the sales team. Because a VAR is not VC-funded startup who can incubate for years before launching, your practice also has to show customer interest and revenue within a few quarters, or risk being unplugged.

Building an effective digital practice at a VAR is no easy task. But for those who can do it, the rewards are tremendous. We’d love to hear about your journey so drop us a line and tell us about your digital practice.

 

Anoj Willy

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