Is the Traditional Sales Model Dead for Technology B-to-B Companies?

By May 16, 2016Blog
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After working for both a large equipment provider and multiple startups, it is amazing to see the significant investment in the go-to-market process. Traditionally you hire someone to manage the “relationship” and partner that person with a Systems Engineer that does the technical heavy lifting in the sales process. The Sales person sets the meetings, asks the tough questions about money, budget and who makes the actual purchasing decision. The Systems Engineer establishes technical credibility and reinforces the technical fit for the client.   And the cycle continues… simple model.

For larger companies it is a bit more complicated especially when multiple business units are involved. Everyone wants to “sprinkle some DNA” on the deals and you may have multiple Sales people and Systems Engineers in client meetings. Everyone wants to make sure his or her solution is positioned properly. For any of us in these meetings there is typically one smart person driving the discussion and a lot of people sitting there like they are watching a tennis match. This is a cumbersome and very expensive process. The crazy part of the process is the inequity of the compensation that supports this model. Typically the person providing the most value to the sales process is compensated less than the others.

In our opinion there are some major market shifts that make this model obsolete:

  1. There is no more telephone for the prospect to answer that is not a personal cell phone…tough number to get and does anyone answer the phone for an unknown number?
  2. Customers do not have the time for outings and boondoggles. More importantly, it is now more likely to be ethically irresponsible and a possible corporate violation than ever before. The relationship part of the role is changing.
  3. There is a lesser need to “educate” the customer. There is too much information available. For any specific domain, the prospect may know more than the sales person about the solution and their competitors.

Has the sales process adapted to these changes? Simply, no. The idea that there is a role for someone to say “let me get my smart people to talk with your smart people” is over.

Itential is experimenting with a new go-to-market strategy that may or may not work. Our philosophy is simple: we want the most capable person to drive the relationship with our clients; we want the process lean; we to want provide our prospects with enough publicly available information to research us and our solutions; and we want to compensate the person providing the most value to the sales process (regardless of the role within the company).

So far this has been mildly successful and we need to make a lot of improvements, specifically:

  1. Great Sales people are great business people. In fact, they don’t think of themselves as Sales people. Solving technical problems and understanding complicated business requirements is always a required skill-set combination.
  2. To be a great Sales person, you have to embrace conflict (i.e. you may not always like the answer). Great sales people want to get to “no” faster than they want to get to “yes”. Time is finite for both the customer and the sales person. To optimize this scarce commodity, tough questions need to be asked (on both sides) to qualify and disqualify whether it makes sense to continue. Great sales people can understand this and have the fortitude to not only tell the prospect they are not a fit but also recommend a competitive solution. Not easy, but very appreciated by the clients. We did not waste their time!
  3. Money – we are brought up to not talk about it and it is often the elephant in the room. Financial innovation and deal structure is as important as the technology solution. We have found this to be the most difficult characteristic for our technical resources to overcome. It makes everyone very uncomfortable.

A lot of our issues can be overcome with training, preparation, and screening individuals for the role. We will continue to push this model and we are interested if and how others are moving towards this lean path.