An interview with Michael Thomas by Harvey Dunham, Managing Director of Business Development at SAMA
Michael Thomas is the founder of Magnetic Services. He also spent years as a managing consultant for Microsoft’s global consulting organization. This interview is based on a recent SAMA podcast.
Join us for a Next Practice Symposium on September 15 when Michael Thomas will be speaking more on this topic. Register here.
Becoming a Trusted Advisor
Harvey Dunham: We are asking the smartest customer-facing people in B2B how to become trusted advisors to customers they cannot afford to lose. How do you think SAMs can learn to sell expertise and not products and transform themselves into trusted advisors?
Michael Thomas: There are two ways to look at this. First, there is how SAMs communicate, articulate and exchange their expertise based on their sales and professional experience. Second, you can view a SAM as a broker or bridge to the expertise that lives within their organization. While the first topic is interesting, the second is more germane.
There are exceptions but generally SAMs are used to thinking of themselves as a bridge to products and solutions for their customers. This is historically the role they have played. SAMs however have a much more important role to play. When we talk about expertise, you could label it as knowledge-intensive business services or expertise-based services that don’t show up in a product catalog. These services are not documented like products, technologies or platforms that have solution sets customers can find online and have at their disposal. So, the SAM is critical to connecting the customer with the expertise inside the seller’s organization.
Service teams generally have that expertise but can’t scale as broadly as your SAM community. So, from the customer’s and service team’s perspective the SAM represents the expertise and can make things happen for those customers.
Selling Expertise
Harvey Dunham: When you’re talking about services, you’re not talking about break-fix services where somebody sold a product or a solution and it breaks down?
Michael Thomas: This is something completely different. I am speaking about professional services. In traditional sales models, like the seven-step sales model, there are steps six and seven, which is service after the sale, but this is not based on expertise. We’re talking about traditional professional services, bodies of expertise either within the selling organization or externally, that know how to solve problems using a variety of tools, assets and products. SAMs can leverage and monetize the expertise that they have in those teams, which don’t really have the opportunity to scale as broadly as your SAM community does. There’s just less of them, so a scarcity of resources.
Three Recurring Issues for SAMs
Harvey Dunham: What kind of problems do SAMs run into when they’re selling expertise?
Michael Thomas: We typically see three recurring issues that put SAMs at a disadvantage when talking to senior decision makers at a strategic account. First, there is a lack of language or vocabulary to talk about expertise-based solutions in the same way as a business development manager from a services team. SAMs do not regularly bring the customer in to talk about solutions so they are not fluent at conveying expertise. They don’t have a rich vocabulary for describing it. Therefore, it comes across as murky and hard to define for our customers.
The second issue, which is more subtle but as important, is SAMs don’t have a rich, functional understanding of how the services team applies its trade. They can talk about how their products and solutions are created. They’ve been to their factories, plants, research and development facilities. They’ve walked the plant floors of their customers. But they’re far less fluent when you ask them about services within their organization, like “How many people are on those teams? Where do they live? What is the project management process? How do your service groups pick a project and staff it? What does a contract look like? What does a typical engagement pattern look like?”
Lastly, a semi-universal issue is that SAMs don’t have high fidelity in terms of qualifying leads for the services teams and turning the leads over. They turn leads over in a similar state as how they qualify product or solutions leads. Therefore, they don’t get a lot of traction with the internal services team. In many cases, when you talk to the internal services groups, they’ll say that they stop listening as keenly to the SAM community and they rely more on their own internal business development.
Spending Time and Resources
Harvey Dunham: So it’s not easy, which leads me to ask how SAMs can successfully sell this way and leverage expertise and scarcity of resources to lead their customers to take action?
Michael Thomas: It comes down to spending time and resources to familiarize SAMs with the areas of expertise so they can discuss those with their customers.
If you get better at talking about expertise-based services and turning that into leads and then turning those leads into well-qualified conversations, you will have wins for you and your customer. You first have to address “Are the SAMs in my strategic account organization being ‘constant’ with services? Are they integrating a services conversation into their product-based conversations as frequently as they should be?” The answer in most cases is they are not. So the first thing you have to do is ask “Are SAMs getting a lot of repetition and are they weaving services into every core conversation they’re having at high levels with the customer?”
The Concept of Scarcity When Selling Expertise
Harvey Dunham: Can you speak about the concept of scarcity when a SAM sells expertise?
Michael Thomas: When you’re talking with customers, the concept of scarcity is subtle. You move from brass-plated selling to gold-plated selling. Here’s the fundamental concept. Almost all services organizations have some business limitations in terms of how they staff and keep their human capital and human resource services on board. By design, those limitations mean that some customers may have to wait to access experts who can solve specific problems that can’t be solved by just buying a product. So that level of scarcity is not a sales trick inside a services group; it’s a fundamental issue to be talked through. It’s just like lead time on a major capital purchase that you, as a SAM, might be talking about to your account. If you’re not talking about lead time, you’re setting yourself up for a problem in the future. So you have to talk through this idea of resource scarcity so that it’s not an elephant in the room. You need to help the customer see that scarcity is an opportunity for competitive differentiation and advantage:
“If I’m applying my human resources, my expertise to you, my customer, that by default gives you a 12- to 18-month advantage in solving a problem versus your next peer competitor. So if scarcity is in there anyway, why don’t we use it to your advantage rather than that of the next person on the list?”
At this point in time, your terminology should be flipping from customer to client. It’s a vocabulary subtlety that you’ll hear when you talk to services organizations. They have clients rather than customers. You need to tell your clients “If you want to leverage scarcity as a competitive advantage, then we can. If you don’t, I respect that. Do not be surprised, though, if I go to the next one on the list. I’m going to keep going to the next one until I find someone who is in the right spot to utilize these resources. It might be a year or two before I get back to you.”
Having that level of frank, transparent conversation with senior management, they get that. And so what you may hear from the client is “Maybe not those services right now, but I’ll tell you, we would be interested in looking at alternative B.”
Benefits for SAMs
Harvey Dunham: How do successful SAMs use this leverage? What’s in it for them in terms of achieving their goals?
Michael Thomas: The most basic advantage for SAMs would be to sell more stuff and make more money. They’re getting richer because they’re successfully solving problems for the customer and making somebody else richer.
That’s the first level of Maslow’s hierarchy of needs. As you go further up the value chain, you find that some SAMs have a higher level of aptitude. They’re working just as hard if not harder, but they’re not working on the same things. They use their political capital within their organization and make statements like “I do not have time anymore to do certain things. We need to split this account and I need to be focusing on certain aspects of it. I need somebody else to be focusing on other aspects, maybe things I used to do three, five years ago, contractual issues, product delivery issues, typical firefight and customer-satisfaction issues.”
Leveraging Expertise Leads to Trusted Advisor
Michael Thomas: This is a path for SAMs to reach the holy grail of becoming a trusted advisor. It’s an important step because if you’re going to give advice and be an advisor, you better be able to give advice and you’re not always going to have the advice. So you need to be able to plug in the people that do, but beyond just sort of playing kingmaker and saying, “Hey, you need to talk to this person on our services team. They come from our acquisition of a software company and, boy, are they really smart.” That’s just being a broker. You have to be able to say, “I really understand these problems. I can really apply my industry expertise of what I’m seeing to you and other customers like you. I think I have an idea we ought to look at. I want to bring somebody else in to…”
Harvey Dunham: Clearly there are companies that sell in this manner and you know a lot about this topic. How did you learn about this and master it yourself?
Michael Thomas: In my own personal journey, I worked in professional services for many years. I ran some custom application development teams early in my career, and I learned through the school of hard knocks. And then I was fortunate to get hired by Microsoft in the mid-90s. I worked for several years in their global consulting organization, Microsoft Consulting Services. I was a managing consultant in charge of some consulting groups and managing certain aspects of P&Ls. So, I’ve seen how large-scale, high-revenue services organizations run from the inside out.
That helped me build fundamental business knowledge and an ability to speak the language of business. I got to a point where I knew how to click these things together like Lego® bricks and make something that’s repeatable, but I was not nearly as effective back then as I am now.
Later in my career at Microsoft I had the opportunity to spend a lot of business cycles at the executive briefing center in Redmond, Washington, where I saw the patterned approach that senior leaders used – presidents, business-unit vice presidents, senior product managers, who knew certain domains and problems very well. I saw how they communicated to Fortune 500 companies with a lot of repetition. And the light went on; it was like “Oh my goodness, there’s a pattern here. And you can actually decode this and break it down.” And that was the basis for much of the consulting that we do now.
Clearly there are companies that do this well, such as traditional, large consulting organizations like IBM and Oracle. It is interesting, though that many of the best consulting companies are boutique partners in their own industry space. Almost every client has a few niche partners they work with, and these consulting partners are fractional in size compared to the large, well-known organizations. If you talk to a partner that’s been around 10 or twelve years, you’ll find they know their niche, how to describe and qualify it. They run a good resource pool in terms of utilization.
Building an Organizational Change Program
Harvey Dunham: How do you get the SAMs at product companies to learn how to sell the expertise and scarcity that exist within their company? How do you get them to do it confidently in a way that creates mutual co-value, which is the goal of every SAM?
Michael Thomas: The short answer is if you want that group to get better at this kind of skillset, you need to create an organizational change program not just a training course.
You have to establish relevant, rational and reasonable targets for the behavioral changes you want to see in six, 12 and 24 months. It’s one thing to say “I want us to be better. I want us to be more trusted by our clients. I want us to be offering more expertise and giving our clients access to it,” but then you have to put numbers down on a piece of paper.
The first leading indicator is how many times the SAMs are having these conversations on their own today. And then, what increase would you like to see in those conversations in six months or another reasonable time period?
The second leading indicator, maybe around the 12th month, is that you should see a drop in the number of leads the SAMs are sending to your internal services teams, and you should hear those services teams say, “But the leads we’re getting are higher qualified and are more suited to what we do.” That’s a midterm indicator that your SAMs are not only now having conversations, but they’re getting better at discontinuing the ones that are not going to move forward.
Then maybe 12 to 18 months later you should see a bigger funnel in your services. Some leads should have converted to wins. You should now actually start seeing some commercial effects.
When you have that mapped out, you can look at individual skills and training. We created workshops at Magnetic where you can find the building blocks for SAM skills improvement. What we’re seeing with our clients as a key component for skills improvement is digital content. Going beyond just training, rather empowering SAMs with a different type of content to prepare them for those high-level conversations can multiply their effectiveness.
Harvey Dunham: A program like this has to be inspected and measured. This is really something you’ve got to institutionalize and put effort into. It’s got to be a formal program-led initiative, not a one-off kind of capability done well.
Michael Thomas: It comes down to “Are you talking at an organization level? Are you trying to change behavior? Are you trying to create a net effect or are you just trying to teach people more about a topic?” Be clear about what you’re trying to accomplish and invest in it. You can have SAMs learn more about services and how to talk about services better. Some SAMs will benefit, most will not. If you want to see a difference, you’ve got to wrap it in a program. If you do want this, you have to make a commitment, set goals and measure and record your progress.
Harvey Dunham: And so you build the program. You’ve got the players, you’re starting to get there. How do you enable the SAMs to have these conversations at scale, and hit those KPIs?
Michael Thomas: It’s at scale and hitting the KPIs where the magic happens. For a while, we along with a lot of our clients and other organizations had been struggling with this. Over time, we came to realize that companies were doing the training, making the investment, creating the program and then essentially sending the SAMs out with a PowerPoint deck.
And the truth is when SAMs are seeing these well-versed, highly effective senior solutions architects, principal consultants, principal engagement managers, practice managers, partner consultants, they use different terminology and services teams. But when you’re talking about upper echelon SAMs, these true trusted advisors, the last thing they would ever do is whip out a PowerPoint deck. They may have other people that need a PowerPoint deck, such as delivery managers and subordinates that need to communicate at a technical level. But these upper echelon SAMs have spent years creating their personal ability to communicate to high level executives. It might be grabbing a pen to write on a whiteboard. It might be a variety of different things, but it’s not a PowerPoint deck put together by their marketing team.
We realized that a lot of SAMs were bringing out the PowerPoint deck and instantly losing credibility with the client. We also realized that while the next best thing was to bring one of those solution architects out on the call, there’s not enough of them. Those people all have utilization goals and they’re not going out on a call unless they think they’re going to be part of the engagement, because it’s going to apply to their utilization.
Creating Digital Content that Works
We concluded that we needed to find a way to put that solution architect in the pocket of the SAM. So, we developed some technology platforms to create digital content to do that. Using the experience gained at the Microsoft executive briefing center, we’ve created interactive, engaging digital content that does not look like a PowerPoint. It mimics what that solution architect would do in the room. This helps SAMs have these conversations, and a by-product of it is that when you create this digital content, you have to work closely with the services team. So when they know that their version is being presented by the SAMs, they’re more bought in because they know that’s their personal message. So it’s an enabler; it lowers that friction of getting those first great customer calls and establishing relationships.
Harvey Dunham: Well, Michael, this has been hugely insightful.
Michael Thomas: It’s a great topic and I am very passionate talking about it. We do not claim to have all the answers, but if you work on something like this repetitively enough, you start to see some patterns, and you have some good advice to give. I’m glad it was useful to you and hopefully it will be to the rest of the SAM community.
Remember to sign up for a Next Practice Symposium on September 15 when Michael Thomas will be speaking more on this topic. Register here.