Impact Pricing Blog

Transitioning to Selling Subscriptions

This morning I was asked a difficult question in a setting where I couldn’t tell the complete truth.  

I delivered a keynote to the sales team of a 100-year-old traditional company that wants to shift from perpetual licenses to subscription business models.  During Q&A, the President of the division asked, “How do you recommend we transition salespeople from selling perpetual licenses with maintenance to selling subscriptions?” This was a tricky situation.  My gut reaction was, “You don’t,” but I was pretty sure that wasn’t an acceptable answer while presenting to 500 of their salespeople. I paused.  I danced.  I even said, “I don’t want to answer that question but …” and out came a reasonable(?) answer.  

“Salespeople, like all of us, don’t do well with change, especially a lot of change all at once.  When you tell a salesperson to sell a different product using a different sales process to a different target buyer at a different price, the salesperson will most likely fail.  It’s too much change, too fast.  However, if you could change just one thing at a time, salespeople can likely handle it.”

OK, it wasn’t the response I wanted to give, but it was decent for the situation.  The good part is, it’s true.  The bad part, it’s probably not practical.  I don’t know how to structure a new subscription product from a perpetual license without changing too many parts of the sales process.  

Another question was, can one salesperson sell the perpetual license and the subscription?  I want to think the answer is yes, especially if the salesperson is focused on the market, particularly how customers get value from the product.  The value calculations shouldn’t be hugely different from each other.  The problem, of course, is what we’ve already discussed.  There is a lot for a perpetual license salesperson to learn (or change).  

What would be my honest recommendation?  Launch a new sales force and ask them to sell the subscription product.  Have them to work alongside the traditional salespeople.  They should learn value quickly, and the existing salesforce may pick up selling subscriptions.  

That was my experience and opinion.  What would you have recommended? 

Now, go make an impact. 


Impact Pricing - Selling Value Book V2
Tags: pricing, sales, salespeople, subscriptions

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