"C" Level Selling Technology: technology pipeline development
Commercial overview
IT budgets in 2008 were supposed to be up by between 2 and 4 percent. This should have brought technology spending back to
2006 levels but still below 2005 levels, and as you would expect there is no growth forecasted for IT spending over the next three years. The current economic situation will lead technology companies to examine their sales model (lead generation process) and make dramatic changes to the sales process as well as the structure of the sales organisation. It will take some technology companies too long to recognise the issue and begin to make the changes necessary to be successful in a down turned market.
But have the majority of technology companies gone far enough to not simply survive, but to thrive in the toughest economic conditions experienced for 70 years? Most certainly not. The majority of companies have focussed on slimming down their sales organisations, aligning themselves with their strongest channel partners and have attempted to drive their lead generation processes to a higher level within their target market.
All of the major analysts have recognised and commented upon the fact the C Level support for strategic investments in technology is critical yet the majority of technology companies, whether it be product or services companies have only paid lip service to this fact. Alongside technology companies clearly understanding and identifying their place in the market CEO involvement in the salesprocess is THE critical factor for success.
Whilst technology Executives have recognised the need for change, they have delegated the task to the Sales heads rather their taking control themselves. There is still a disconnect between the comprehension of the sales process by the CEO and the actions being undertaken by the sales division.
Issues
The sales process (lead generation process/technology pipeline development) and the actions that equal success need to be understood by the entire company. A thorough understanding of the technology pipeline development process throughout all disciplines will breed confidence as well as predictability in the companys performance.
This understanding needs to be led from the top which requires the entire executive team to have intimate knowledge of what works and what doesnt, as well as the knowledge that the plan is being delivered upon.
The above prompts two questions, firstly is there adequate communication to the company as a whole as to sales methodology and performance and secondly, does the executive team and particularly the CEO truly understand what is required to be successful and does he have the ability to accurately measure success through all stages of the sales process.
The majority of technology companies have neither. The result is not a clearly defined methodology and process and a lack of understanding and predictability by the CEO. Inaccurate sales forecasting is the most obvious result and leads to the executive team basing expenditure plans on very unreliable foundations, as well as the expectations of the company being unduly optimistic.
Many companies in the technology sector have suffered, some to the point of going out of business, by being slow to react to the changing market conditions. During the 1990s technology sales was easy, little discipline was invoked on the sales teams, yet the results still came. At the beginning of 2001 the market dynamic changed radically and the pull from the market, from SME to the largest enterprise disappeared. Since that point there has been a lack of understanding in how to be successful in such economic conditions and very few companies have really addressed the issue, except to slim down their sales operations. The smarter companies and those that continue to succeed have recognised the requirement for a more disciplined approach in all aspects of their sales operation. From the way that they identify their target market, to the approach, a disciplined sales and bid management process and a comprehensive follow through program.
In many companies there has been a substantial skills gap in their sales force. Many sales people were recruited during the mid to late nineties simply to keep pace with demand from the market. Little attention was paid to their ability to really sell or the gap in their skill set that existed. As there was no or little idea of what skills were needed and therefore no analysis undertaken of what it would require to turn new recruits into accomplished sales people training was largely irrelevant. This situation has translated itself today into technology companies having built sales teams that do not understand how to be successful in a market where they have to sell. There is a distinct lack of understanding of what drives the businesses they are selling to, how they are structured and where the political influence lies. This together with an inability to uncover, create or identify business needs, an inability to control the sale from the outset and an inability to handle buying objections highlights many of the reasons behind a lack of success for many technology companies.
In addition marketing activities are still not aligned closely enough with sales activities. As in the good old days marketing is operating very much as a silo, whereas marketing activities should be equally as disciplined as sales activities, should be very closely aligned to the sales process and the lead generation process should be accountable. Trade shows, seminars and user groups are an example of activities that have always been seen as the domain of marketing and having little to do with the day to day activities of the sales operation. However upon closer examination of the investment made in these types of activities you would expect to be able to demonstrate a tangible return. The value of all marketing investments and how they contribute towards the company delivering on its revenue plan should be obvious before any investment is made.
Solutions
The primary solution for technology companies to succeed in reaching and exceeding revenue targets is for the senior management teams to have an in depth understanding of the sales lead generation processes and the basis upon which forecasts are made.
Sales cycles will be reduced, conversion rates will increase and average sales value will be driven up if sales teams learn how to sell effectively at the C Level and articulate their proposition in a business language that relates directly to the organisation and the individual they are trying to close business with.
It is all very well talking about cost reductions, revenue increases, efficiency gains and productivity wins, but unless a sales executive during the lead generation process can put it in the precise language of the company and individual they are addressing the value of the sale will not be maximised.
