By the time senior account executive James Caron got back to the office, the writing was on the wall. In the last two hours, what only a day before had been a "sure thing" enterprise software deal with a major transportation company suddenly evaporated. Listed on yesterday's forecast at 90 percent, the $765,000 opportunity was now just an $80,000 "proof-of-concept" pilot.
Regional VP Mike Townsend sat in his office staring out the window in disbelief. As he kept playing out in his mind what was sure to be a "painful" conversation with his EVP of worldwide sales, he kept asking himself what he could have done differently to prevent this opportunity from slipping away.
His first reaction when James called was to swing into "triage" mode, something he had become all-too-familiar with doing in the last year or so. But now, with just hours to go in the quarter, there seemed to be little he could do to turn things around. After all, hadn't they already made several price concessions from the original quote of $1.1 million just to keep it from going to competition?
Mike hesitated as he thought about what he would say to James. There would be no doubt both of them would be impacted when word of the disappointing results reached corporate. But something of greater concern had displaced Mike's anxiety over breaking the news. This latest episode had convinced him of the existence of a far more chronic and widespread problem in the sales force: They simply weren't prepared for the enterprise sale.
In the old days, product was king. Then came the need to get away from features and functionality and talk about "solutions." Many companies today seem to be one step behind in rising to the next challenge: Migrating salespeople from the "department level" or "operations" mindset to the enterprise mentality.
According to a study by BluePrint Marketing, some enterprise technology vendors can spend as much as $450,000 to acquire a new major client. There can be only one reason why such a sizable investment can be justified: both the initial and ongoing revenue from closing an enterprise sale.
Unfortunately, many software companies today have sales forces that only contain a handful of individuals with "instinctive" skills for spotting the larger opportunity, much less knowing how to execute against it. And far too many sales training workshops are like "corporate carwashes" that attempt to infuse these skills in unrealistic ways.
In this two-part series, we'll examine several key areas associated with winning the enterprise software deal. We'll also spotlight where companies need to focus their efforts in order to better prepare their sales forces.
One View, Two Perspectives
Recently, an SVP of North American sales for an enterprise software company expressed his frustration over pursuing larger opportunities this way: "I can sit two salespeople in front of the same deal. One of them will see a $75,000 to $100,000 sale at the operations level.
"The other will see a multi-division opportunity worth $500,000 to $1 million that requires careful planning of resources and building relationships at executive levels in the client organization. Why is that?"
Good question. Some of the answers may seem obvious: poor hiring, lack of experience, etc. And if the secret to winning the enterprise deal were just that—secret—perhaps better recruiting is a place to start.
The keys to getting the big deal right, however, are not as mysterious as you think. We would suggest that the last decade has provided a mountain of evidence for what needs to happen in order to identify and capture the enterprise software opportunity.
So here we go…
Calling on the CXO. According to a Forrester Research report from several years ago, some 30 percent of companies must get senior executive approval on any new investment. For the larger-ticket items, that percentage climbs dramatically. It's no wonder, then, that failure to identify, access and influence senior-level executives is one of the main reasons for losing to competition.
Another research project sponsored by Hewlett Packard, and involving hundreds of interviews with senior-level executives, revealed the following: When asked how they prefer to be accessed by salespeople, 84 percent of C-level executives said they will "always or usually" grant a meeting when there's an internal referral introduction to them, as opposed to other methods of access (i.e., cold calls, outside referrals, gatekeepers, etc).
When do senior-level executives get involved in the decision making cycle? Not when you think, according to the same research project. Most senior executive involvement drops off significantly during that part of the buying cycle when most vendor meetings and presentations take place. It turns out senior executives prefer to spend time up front with their teams to establish buying criteria and set objectives for the project.
One of the most challenging issues in dealing with C-level executives involves the perception of value derived from vendor solutions. Since most salespeople do not take the time to meet with executives after the sale, the actual value delivered never gets communicated and executives end up determining this on their own.
When left to their own devices, their perception of value is always lower, sometimes significantly so, than the real benefits experienced. This leads to an uphill battle to build the perception of new value when upselling later to those same executives.
Where's the team? Spencer Stuart, the global executive search and consulting firm, conducted a study to learn more about the differences between the most successful software companies and their competitors. When asked about specific factors differentiating their sales forces from their competitors, CEOs and senior sales mangers reported the following:
Team selling: 67 percent.
Technical training: 60 percent.
Formal training: 40 percent.
Channel strategy: 33 percent.
Compensation plan: 33 percent.
It used to be that individual sales heroics in chasing down the big deal were something to be admired. Today, it can be economic suicide. Becoming the "trusted advisor" to the executive is a goal worthy of pursuit. But in the larger, more complex enterprise opportunity, that alone won't work in today's business environment.
What's the No. 1 quality a salesperson is expected to bring to the table during meetings with senior executives, according to the same study sponsored by HP? It's not product or industry expertise or even knowledge of the company's issues. It's the "ability to marshal resources" on the company's behalf. In other words, the ability to orchestrate team resources to investigate, address, and solve the critical business issues facing the client before and after the sale.
Think of the last enterprise sale your company made. How many people got involved? What were their roles? If your experience is similar to other software companies, the effort typically starts with one salesperson and a technical or sales engineer. It may end with anyone from product marketing to the executive team jumping in to lend a hand. How often have you seen $1 million-plus deals that didn't
require this kind of intense"swat team" approach?
Now ask yourself how many within your sales force are naturally skillful at planning and executing the team selling model? In today's selling environment, it's a sure bet that if you aren't approaching each large opportunity with a team selling mindset, there's a good chance your competition is.
The challenge, then, is to get a greater percentage of your sales force to understand and leverage the benefits of team selling in ways that better utilize sales support and "special teams" resources for a larger number of simultaneous opportunities.
A matter of alignment. Back in 2002, the American Management Association determined up to 80 percent of the buying process within a company takes place without any vendor involvement. For salespeople trying to stay in alignment with client executives, that can be a daunting reality.
Unfortunately, many salespeople react to the "lack of control" they often feel in the sales cycle by trying to manipulate and coerce the course of events in their favor. This only causes greater tension between buyer and seller and inevitably leads to misalignment between the two organizations.
Executives can spot it when they get the feeling that the salesperson is only "in it for the short term," just to make an end-of-quarter objective, and they don't sense the building of a long-term "partnership." Salespeople first become aware of the misalignment when their voicemails and e-mails go unreturned in the 11th hour, and their ability to influence the executive seems to continually erode with each passing day.
One survey of executive buyers by Action Selling revealed 62 percent of all salespeople fail to earn the right to ask for a commitment. The same survey uncovered the fact 82 percent of salespeople discount on price to earn a sale.
Both figures point to an inability to create and build value for the client. Building value is directly attributed to degree of alignment between
not only individual buyers and sellers but between the two organizations.
Chris Deren is the CEO of SellMasters, a global sales training company in the high-tech industry. Stephen J. Bistritz, Ed.D., is the president and founder of SellXL, a worldwide sales training and consulting firm, as well as the co-author of "Selling to the C-Suite."