Microsoft likes to use the term “Hero Offer” for a particular subscription. It’s like the Sears Good, Better, Best approach. Usually the “Hero” offer, means that you are a hero to Microsoft if you sell it, not that is is the best solution for every customer. So, what is the real Hero offer for SMB customers today?
Sorting the needles
Between Office 365 and Dynamics 365, we now have a true haystack of SKUs. On the Office 365 side we have multiple Business SKUs and Enterprise SKUs, and each product is available individually as well, so that’s a pretty big matix. It’s no better on the Dynamics 365 side, between Business and Enterprise Editions, Apps, plans, team members, stepped pricing, transitional and promo SKUs, Microsoft had to produce a 180 page PowerPoint just to explain it all to us. A SMB focused partner might be just throwing their hands up and thinking, “forget this!”.
Rose Colored SMB Glasses
There is no doubt that the number of combinations that could be made from all of these SKUs is staggering. But a unique combination for a particular customer is not a Hero offer. A Hero offer is what you lead with in a conversation… where it goes from there is another story. If you stop complaining about how complicated it is, and put on those special SMB glasses and look at the Haystack, a few SKUs light up that make sense. But first, let’s talk about what you are likely to run into out there in the SMB space.
Ready, or Not
Many times you will talk to a new SMB prospect about Dynamics 365, who does not already have Office 365. In these situations I would recommend the Hero Offer that I will outline shortly. Almost as often, this customer will already have Office 365, in which case, I would recommend the Hero’s SideKick offer I will discuss. We all know that Batman is a total bad-ass, but sometimes all you need is Robin to come to the rescue. You really just need the right level of “Bam”, “Pow” and “Zowie” to get the job done.
My SMB Hero Offer
The next time you are looking at the 50 page product catalog, I want you to highlight the following four SKUs:
- Office 365 Business Premium
- Office 365 Business Essentials
- Dynamics 365 Enterprise Sales SMB Promo
- Dynamics 365 Enterprise Team Member SMB Promo
This is what my SMB Hero offer includes. The only question left is “How many of each?” For the SideKick offer, just drop the first two. I am aware that this may generate much debate. But I also said this is the offer you lead with… it may not be where you end up with every customer. But in order to reach an end, you have to have a beginning. Starting the conversation with this offer is not only good for the overwhelmed partner, but it is also good for the potentially overwhelmed SMB customer. It is well rounded, and offers a lot of capability at a great value. Let’s hit each of these.
Office 365 Business Premium
For 99% of SMB this is the Cadillac. It includes all of the core services like Hosted Exchange, SharePoint Online, Skype for Business and OneDrive for Business. It also includes all of the desktop applications that SMB needs like Outlook, Word, Excel, PowerPoint etc. In my opinion, this is the highest value SKU that Microsoft offers, everything above is only $12.50/user/month. It is actually awesome value. If you can’t sell this SKU to a SMB customer, you should leave the industry. Apparently, not enough partners are selling this SKU, because Microsoft just floated a raft of new capabilities onto it, for the same price. Things like Bookings, Customer Manager (more on that later), invoicing, etc. This all seemed entirely unnecessary to me from the outside, but I guess Microsoft is seeing a reason to further goose this SKU, from merely Awesome Value all the way over to Ridiculous Value. This SKU can literally sell itself…. and that may not be good for partners, but that is another story.
Office 365 Business Essentials
Even ridiculous value, will not overcome that fact that there will be users in a SMB that simply don’t need all of the capabilities of the Premium SKU. Microsoft has two others, Office 365 Business and Office 365 Business Essentials. Microsoft sliced the Premium SKU in half to create two sub-SKUs, one that includes just the services (Essentials), and another that includes just the Desktop Office apps (Business). A customer that buys Business means that they are getting their services elsewhere and we do not want that. Hosted exchange brings to much to the new Dynamics 365 story to leave behind. So we are not going to mention Business to anyone. The offer for those users who do not need everything, needs to be Essentials. Of the features they might not need, email will usually not be one of them. This SKU is six bucks.
Dynamics 365 Enterprise Sales SMB Promo
Today, this is the best starting point for SMB on Business Applications, IMO. I am sure that Marko’s team over at Business Edition Financials will strongly disagree, and in many cases he may be right. But we are looking for the Hero lead-in offer. To me, Financials is necessary, but not sexy. I prefer to sell sexy. I can always bring in Sales’ nerdy little brother later. All SMB customers will have something in place to manage their finances, so that conversation is about displacing something that exists. On the other hand, most SMB customers will not have anything like D365 Sales in place, so that conversation is about new possibilities… much more exciting for them. Obviously my CRM background is coloring my bias, but I still think it is the right play. Until the Spring, this is the SKU we have to sell. It is a $95 SKU, with an SMB promo price of just $40 (in line with the future SMB SKUs). This is still $10 less than our previous best offer to SMB, the CRM Online Add-on to Office 365 SKU that was $50. This is not the perfect SKU, it is the one we have. It is missing Service, which a fair number of SMB customers at least think they need. Microsoft will be addressing this in the February time-frame with yet another temporary promo, Enterprise Sales and Service for SMB for $65. Ordinarily, Sales and Service would throw a customer into a Plan for $115, so it is a pretty good price point for SMB. A couple of caveats to be aware of, the $40 Sales Promo is limited to 25 users, the upcoming Sales/Service promo will be limited to 50 users. For both promos the customer can stay on at the same price for a maximum of 3 years. What happens then? I think the 3 years was Microsoft’s way of kicking the can far enough down the road for customers to go ahead today. Since none of what we are looking at today even conceptually existed 3 years ago, it is a safe bet that the landscape will have changed dramatically by 3 years from now.
Dynamics 365 Team Member SMB Promo
To go with the offer(s) above, and similar to the Office 365 Essentials SKU, we have a lower priced Dynamics 365 SKU for SMB users who do not require all of the capabilities. The Team Member SKU allows full read access, and “light” write access to the core Dynamics 365 features. It also allows full read/write to custom entities. This normally $10 SKU is available for the SMB for $5, with a maximum of 150 users. Okay, let’s stop right here because I can already see the wheels turning in your head, “I can sell one Sales SKU, and 150 Team Members, and build everything custom”. Do you really think you are the first one to think this? I have mentioned before that the Team Member SKU is a critical piece that every partner must know, and that is still true, but it is also the most dangerous SKU for Microsoft. The last thing that Microsoft is interested in is a bunch of $5 users. So they are tightening the noose around that SKU. It is beyond the scope of this post, but you should do your research on this SKU to truly understand where, and how, it can be used.
Some potholes to Avoid
Microsoft recently launched a new Outlook feature called Customer Manager. Inexplicably, it was added to the Office 365 Business SKUs at no additional cost. This absolutely will take some business away from Dynamics 365 Sales. While designed to serve the 1-9 user SMB, for which Enterprise Sales is likely too much anyway, there will be customers who will attempt to stretch this way beyond what it was “designed” for. Many of these SMB customers will be new to CRM type features and may see this as a simpler way to start. Once using it, it will be a challenge for you to get them to consider more than tripling their cost to bring in the full sales app. At least today, we are talking about the Mack Daddy Enterprise Sales App… not so in the Spring.
One more thing to add to the Hero Offer
I would really love it if you would also consider adding our RapidStart CRM solution to your Hero Offer. Not only would that fill my bank account, but it would also fit very nicely into the Hero offer I described above. I don’t want to sound pushy, but I can’t very well write all this stuff without mentioning that we have an awesome solution for partners, please take a look.
In the Spring, I will no doubt be writing another post telling you to forget everything I said in this one.