Opportunities to Engage Directly with Decision-Makers Must be a Priority for Enterprise IT ISVs with Recurring Revenue Product Models

As we wrote in a prior post to this blog, enterprise IT ISVs with “razorblade” products built to produce a healthy recurring revenue from the periodic replenishment of the “non durable” component of the product (which is usually length of access via a cloud or software as a service, SaaS, subscription) must engage directly with decision makers. The reason for this imperative is that successfully capturing service renewals becomes a much easier task when decision makers are correctly engaged from the start of a sales plan. Lots of sales trainers have admonished their students to meet this imperative; therefore, we are not making our claim in a vacuum. The facts are that the perspective of operational personnel as regards costs, benefits, savings, etc. are very different from the perspective of decision makers who likely own budgets, and, therefore, manage capital outlays with utmost care.

We know of three different methods of producing this type of engagement very early in a sales plan. The first method is to implement what is often referred to as a “diagnostic” or “deeper dive” activity with a prospect. The purpose of this activity is to collect all relevant information about a prospect’s needs, ostensibly to determine not only the factors that a prospect is looking to change, but the severity of these factors, which most sales trainers agree will permit sales teams to estimate the likelihood of a sale. The general rule is that the more severe the factors, the greater the likelihood that a sale will be made.

Of course, the details that emerge from this “deeper dive” activity more often than not will include identification of decision makers as well as the roles of other important contacts in a purchase decision. Where factors are severe, in our experience, there is a greater likelihood that prospects will acquiesce to including decision makers in a discussion. But for products that sit on the periphery of larger applications, it is often very difficult for sales teams to get prospect commitment to engage in a deeper dive, especially in 2012 where prospects have generally accumulated all of the information they require about meeting their needs before they contact sales.

In these cases we highly recommend identifying other contacts within the same organizations. In other words, while an initial sale is in process, lead generation teams are using techniques like teleprospecting to engage with other contacts at the same business. It is much better for this process to be effective not to link the two activities. In other words, we recommend that sales teams continue to execute on their sales plan with immediate prospects independent of the activity of lead generation personnel. Over time, a map of decision making for the enterprise should emerge.

The last method is simply to use renewals as an opportunity to engage with decision makers. In our experience, prospects are much more open to identify decision makers post sale than is usually the case while the sales plan is in process. Of course, it is much more difficult to engage with decision makers after the sale has been made, but in some cases there is simply no alternative.

In the next post to this blog we will look further at how ISVs of peripheral products can leverage partners to get to the same aforementioned decision makers.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


On the Need for Enterprise Sales Staff to Play the Role of Diagnosticians

In 2012 it is essential that sales planning for IT products and services targeted to enterprise businesses and other large organizations in the public and not-for-profit sectors allocate as much time as required for the compilation of a comprehensive diagnostic report on any/all prospects. As we have written elsewhere in this blog, purchase decisions are now generally much more complicated than heretofore; therefore lots of information needs to be accumulated on each aspect of how a purchase decision might be framed by a typical customer for a specific product or service, or integrated solution. This diagnostic process (we credit Jeff Thull, author of “Mastering the Complex Sale” for coining this phrase) provides sales with an opportunity to facilitate prospect movement along a path towards identifying needs (now commonly referred to as “pain points”).

We characterize many of the prospects with whom we have engaged over the last 2-3 years as “dysfunctional” decision-makers. Dislodging dysfunction is far from an easy task; nevertheless, we have obtained very good results through a thorough analysis of prospects, requirements, etc. By walking prospects through this information fact finding mission we’ve managed to help them clarify what they really need to do about all of the factors that influence a purchase, from budgets, to targeted areas for cost savings, to business units, etc. In the best of cases this process has produced sales. In the worst of cases this process has helped us to manage our time and move along to better opportunities. Regardless of outcome, we can say that this diagnostic process is the optimum way to engage with the type of enterprise prospects for the products and solutions that we have represented.

The complement to this type of purchase decision-making is an entirely online process where prospects identify what they are after, research possible solutions and simply approach vendors for pricing and availability. Typically this type of engagement — simply shopping price and timing a purchase — is characteristic of a commodity purchase; but we have seen this type of purchase occur, this year, with regard to complex intangible solution. The best method of fostering this type of sale is to optimize web sites with Search Engines for the most helpful set of keywords possible. Social media certainly may play a role in prospect decisions for these products, but the subject of how to leverage social media, effectively, to nurture sales, is still in flux.

We are most interested in hearing from innovative tech companies looking to improve sales team performance.

IMB Enterprises, Inc. is most interested in opportunities to work with IT innovators who wish to approach market opportunities with an effective sales strategy. Please contact Ira Michael Blonder at +1 631-673-2929 to further a discussion. You may also email Mike at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved


Leverage Operational Incentives to Motivate Channel Partners to Work for Your Business Objectives

In the 1980s and 1990s it was en vogue to implement enterprise sales strategies on a “win win” basis with channel partners. This strategy was built on the premise that working with channel partners to achieve important, but differing objectives was a highly valued endeavor and, in fact, the best way to move solution sales forward to its next level of enterprise sales effectiveness within a channel partner model.

In 2011 this strategy of mutual attainment of objectives is passé. Now what matters is winning the business by delivering precisely what the channel partner needs–end of subject. Most products and services vendors have to make do with whatever they can get out of the sale, and make do without complaint. Of course there are astute marketers who, despite market conditions, still manage to sell products and services their way, thereby achieving their objectives, but they are clearly in the minority.

What kind of effect has this market shift had on Channel Sales? The Marketing Leadership Council of the Corporate Executive Board published a piece on November 22, 2011 by Shelley West on this topic on their “Wide Angle” Blog, Give Your Channel Partners the Right Incentives. Ms. West astutely points out that financial incentives simply based on purchasing volume don’t work: “While simple to administer and easy to track, volume-based incentives often don’t deliver what we want them to.” Ms. West goes on to refer to a complex incentive program which, she contends, empowers the manufacturer/services provider to directly manage four key points with regard to channel partner performance, including “Core Product Sales”, “Services Solutions Integration”, “Sales Growth” and “Partner Investment in Relationship.”

All well and good, but I have to ask the question, is there a real partner in Ms. West’s model, or are we providing incentives to prod a reluctant business into a partnership? I suspect the latter. I would rather see partnerships for my clients orchestrated around plain and simple operational assumptions (as opposed to financial assumptions), including:

  • We built it, your selling it
  • You manage the end customers, we have the right to influence them, meet with them periodically, but with you tagging along
  • We create our brand, you receive sales leads

Financial incentives ought to be derived from margin. End of story.

The pollution in today’s channel partner programs, as I see it, stems, in part, from an effort on the part of some manufacturers and service providers to maintain direct selling efforts to the end customer while ostensibly operating a channel program. This pollution makes of the channel partner a rather useless component who will have to be cajoled and pampered into performing some type of service. I would rather remove the pollution and then address channel by crafting operating procedures that make sense for partners and manufacturers and service providers.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved


Crossing the Great Divide: Build Markets for Products Through Geniune Collaboration with Prospects

Where’s the dividing line between sales activity and other activities with customers and prospects that may appear to benefit sales, but, ultimately prove to be detrimental?

In my opinion, successful enterprise sales strategies for today’s markets require a willingness on the part of marketers to participate, wholeheartedly, within a potentially lengthy interaction with customers and prospects. This lengthy interaction may include broken decisions, changing perspectives, internal turf battles, etc as customers and prospects wander in the desert on their way to an oasis of a decision to do something about your product of service. You must be willing to shed 95% of your typical sales behavior, replacing aggressive sales efforts with a collaboration that communicates a complete willingness to participate along with customers and prospects in all of the steps that will be taken as bonafide decisions are formulated over time.

Collaboration may include sponsoring independent studies to provide your customers and prospects with a comfortable authority which will facilitate a decision in favor of your product or service. Keep in mind that these studies, independently authored, may also produce undesired results that refute a decision to implement in your favor. No matter. The point is to genuinely participate in the process which, ultimately, will result in a long term position for your firm for the customer that will be impregnable to competition. After all, no one else would be willing to go there with the client, now would they?

Of course this type of collaboration, to be successful, requires that you maintain an ability to architect products and solutions on the fly, to flexibly change direction as your customers modify their requirements and their needs. Further, you should be comfortable vetting products with customers while the products are still in developments. The closer you can get to an accurate solution for the customer’s needs, the less likely that the customer will find anything remotely close to her needs from any other vendor.

The facts are that 2012 does not look to be an easy year for enterprise product sales. The businesses that will survive the close scrutiny and tight pockets that look to be the customer norm will be those tenacious organizations that will be willing to proceed lamb like for as long as may be required to bring home the order. As well, a great sense of timing will come in handy. Sound like fun, doesn’t it?

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved


Outer Limits: Optimum Management for Enterprise Sales

Unmanaged sales efforts for enterprise and similar complex sales prospects will rarely, if ever, succeed.

Here’s why:

Each enterprise prospect may include several important contacts who will each play a role in a purchase decision. A successful sales campaign for this type of prospect must include a serious qualification for each of these important contacts in three critically important areas. Specifically, the sales team that will win the prospect’s business will exhibit:

  • Deep knowledge of the prospect’s rationale for the purchase decision, which rationale has resulted from discussions and deliberations amongst the contacts.
  • Clear understanding of the role that each contact plays within the purchase decision and
  • Clear understanding how all of the contacts work together in day to day business operations for the business

To simply win the business without prior mastery of what the prospect has decided to purchase; why the prospect decided a purchase was required; who had to participate in the purchase decision; and how the participants in the decision work together within the enterprise would be pure luck.

Managing enterprise sales requires an understanding of what it takes to arrive at correct answers to each of our What?/Why?/Who?/How? questions as well as a thorough familiarity with long sales cycles that may encompass several years of careful development. Long sales cycles are typically required to ensure that, for example, the winning solution is as far from a commodity as possible and as close as possible to the unique offering of the winning sales team.

A successful sales manager for enterprise sales knows how to use a sales team to win this type of business. The sales team will often include a sales person with an address book to substantially enhance the prospect’s level of comfort with the sales process; one or more industry experts to architect the winning technical solution; and a managing sales person who can lead the team to winning the business from the prospect. There may be opportunities to repurpose the same personnel for multiple roles within the campaign; for example, an industry expert or a sales person with an address book may prove to have the skills to fulfill the role of the managing sales person. However, omitting any one of the three roles will result in a very difficult campaign that may result in a failure to win the business.

Further, our successful sales manager must select the right personnel for each role. Consider that a sales person with an address book must be a trusted confidant of at least one of the contacts within the prospect’s decisioning team. Simply knowing folks at a prospect cannot be interpreted as the equivalent of being regarded as a trusted confidant at the prospect. If the sales objective is promising enough, then the time should and must be spent to select just the right personnel for the sales team. It is very hard to cobble together a substitute. Better not to try.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved