Tweaking technology sales teams to exploit the increasing speed of information sharing

1. Winning the Sales Hunger Games
Tweaking technology sales teams to exploit the increasing
speed of information sharing
Sandeep Kaujalgi, Founder and CEO of Collabor Inc
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For long, within the technology industry, conventional sales models have been triumphant.
While there exist many variants of these models honed by sales executives to suit their
specific teams and management styles, they all take off or have evolved from three basic
models.
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Firstly, the “Order Taker”, wherein the sales team is blessed with a portfolio of products and
services that have significant market demand and in essence sell themselves - in effect turning
the salesperson into an order taker. Imagine the role of sales in an Apple Store where people
line up for days waiting for the latest iProduct. Another example would be a services sales
person during Y2K. There have also been attempt to artificially create this demand by
introducing exclusive access or limited availability and they seldom succeed, without an
intrinsic market pull.
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Second, the “Consultative Sales” model, in which the sales person is encouraged to become a
“trusted advisor” to their customer. This is supposed to create a bond between the customer
and company and creates a barrier to entry for competition. And there are enough stories
about deals made over a round of golf or even a client being a godparent to a salesperson’s
child.
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Finally, we have the “Hunter-Farmer” model, in which a sales person sells and then hands over
the customer to the account management team, while they move onto their next hunting
grounds. If your sales team is not Order Takers or Consultative Selling, then most likely they
are a variant of the Hunter-Farmer.
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2. All of the above models come with pros and cons (like, well almost everything in life). The
Order Taker model, lulls the sales team into complacency and they are always surprised and
clueless when a new competitor emerges. e.g: salesforce.com disrupting the CRM industry. I
like to think of the Consultative Sales model “Relationship Hypnosis”. And like hypnosis, it
does not work on everyone. And you can play only so many rounds of golf or have only so
many children to godparent. In addition any high-touch, time invested model inherently has
problems of scalability.
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That brings us to the Hunter-Farmer model, which many successful software and services
companies employ. The one major drawback of this is that the products and/or services tend
to become commoditized. The argument goes thusly, since Hunters are not interested in
necessarily understanding the nitty gritty of what they are selling, but are incentized to make
numbers, they are hence most comfortable with data sheets, price lists and discounting as
their primary tools. And we all know that this technique leads to commoditization and its
natural consequence - price wars - many of us have either been, met or heard of - that ERP
sales guy offering at 80% discount at the end of a quarter. It still, however, remains the most
effective of all the three models - because it achieves one fundamental purpose. It moves
numbers.
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Let’s juxtapose this with the changing world, the chaos of our times - social media, big data,
cloud, facebook, twitter, dropbox, ….….. the net result being that technology has been
completely disambiguated as a function of time, cost, availability, access and utility.
A) Information is freely available and shareable through social media - reducing or eliminating
information arbitrage. That means a company’s successes and failures are just a google
search away, contracts and pricing information are increasingly public and your thought
leadership is not necessarily unique or exclusive and is subject to criticism;
B) Customers are getting younger - a younger workforce who have grown up in the connected
world are getting to be in places of influence, persuasion and decision making. This
impacts the systems and devices of creation, consumption and engagement;
C) Loss of Permanence - Success is not as sustainable as before and sales and customer
management have to work harder. In many ways, the speed on the treadmill has been
cranked up and we need to run harder to stay in the same place; and finally
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3. D) Surprise Competitors - New competitors are emerging that even the most verdant
marketers and strategists cannot vision. Amazon’s entry into the Cloud with Amazon Web
Services culminated a few months ago when they won a $600 million order, beating IBM,
from the Central Intelligence Agency. Or that every social tool that starts off being
frivolous, free and of the people, will soon have a business side - as envisaged by Dropbox
or Facebook or Twitter or Evernote
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To tackle this increased sales complexity, I propose a rethinking/retooling of the technology
sales team. If we use the Hunter-Farmer as a foundation, how do we make it better ? To, lets
say, enhance the pros and minimize the cons.
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Let’s illustrate this new model using the time-tested oh-so-important matrix. Let’s map the
two axes to indicate short-term needs or Revenue Impact and long-term benefits or Strategic
Impact. And now let’s see what these Hunters, Farmers, Whale Watchers and Fishers are
supposed to do to feed our hungry organization.
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4. Marketing becomes more important
Hunters are used to being lone rangers working off prospect and price lists to achieve quotas.
In this age of information, when prospects have access to data about the company, Hunters
need to make sure they proactively arm themselves with data on their prospects. They can
and should work closely with marketing, to use technology to their advantage.
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Inbound tools help understand what prospects are looking for. Social Media and Collaboration
portals help companies get close to their customers. Customer usage and purchase data and
Net Promoter Scores give hints on why existing customers bought from the company, and
Network Effects help build overall brand equity. All these tools help Hunters increase their win
%. I have always believed that Sales is 50% art and 50% science. Well, that science just
showed up, big time - use it.
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Protect existing customers
Once upon a time, you signed a customer and they were with you for life. Ya right! A
Department of Labor statistic says that companies lose 50% of their customers every 5 years.
Many industries like SaaS, see their customers hang on for months at best and companies
may never recoup their marketing dollars. To add, a Harvard Business Review article said that
it is 6 times more expensive to sign a new customer as it is to retain an existing one.
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Companies have to refocus their farmers on retaining and growing existing customers. Let’s
provide incentives for growth and penalties for churn. Good Farmers know how to build and
grow relationships and in my time farming that I always found this account mapping tool very
handy.
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Once a relationship is established, I encourage farmers to draw a
3x3 matrix around them. Now let’s identify the contact’s Boss
(B) and the Boss’ two peers (BP1 and BP2). Identify the contact’s
own two peers (P1 and P2) and then a subordinate (S) and their
two peers (SP1 and SP2). One starting relationship allows the
Farmer to reach an additional 8 people.
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5. For every new relationship forged, draw a 3x3 matrix around them and repeat the process.
Very quickly, as shown in the images below, we see a progression of relationships built in a
focused, disciplined manner that map the account and create additional business while
building entry barriers against competition.
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“C” Suite needs to Sell
Revenue belongs to the whole company and while the sales team has primary responsibility to
accrue it, they can always do with some help. And while this is logical, it is not always
common sense. I propose that the “C” Suite is actively tasked to sell. And I don’t mean just the
occasional passing to sales of new contacts or deal gossip - which should be still done.
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The “C” Suite meet and interact with people at their peer level. They should have active talking
points from Marketing and be coached to identify and flush out potential large deals. Deals
that will fundamentally change the company’s direction and future. Deals that sales people
will never get to with cold calling. Deals that will never be won by RFP responses. These deals
are the equivalent of winning the Lottery Jackpot. While these cannot be forecasted, if the “C”
Suite does not look for them they are not going to happen. If the President of the United
States has to sell The Affordable Care Act, can the CEO of a company not have the same
responsibility. The “C” Suite are Whale Watchers
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6. Order Taking is dead
And finally Fishers are the proving ground in the sales organization and tend to work RFPs and
small deals. This could also be a training ground for new hires or a place to rehabilitate poor
performers who need to be given a second chance.
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So welcome to a refined, tweaked and updated sales model ready for an information age that
makes unreasonable demands on reasonable people. Happy Selling !
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Sandeep Kaujalgi is the Founder and CEO of Collabor Inc., an enterprise SaaS software company
based in Greater Boston.