Reading time 4 mins. If you are a CEO or entrepreneur of a mid-sized technology firm, this article is for you.
Well, here are some interesting facts from the field.
I met a tech entrepreneur with USD 20 million in revenue loose USD 4 million in a bad channel selection decision! This mistake hit him deep and will take a long time before it leaves his psyche!!
Met another CEO of a mid-sized cloud technology firm not have any faith in his sales team. Sales team comprised of freshers and seniors who were demonstrating deep insecurities on one side and lack of capability on the other.
So how do we define sales challenges of a mid-sized technology company?
Should we categorize it as people, competency and process issue? Or as something else?
To begin with, Mid-sized technology firms come in many shapes and sizes. Some are old players (survived for 10+ years), some are family businesses, and some are relatively new entrants in their field (eg: born in the cloud service providers).
Based on what I have observed in the field let me classify the challenges into 5 types:
1. People Challenges
In most of the small to mid-sized tech firms, business is usually driven by one of two lone wolf superstars.
Sometimes, it’s the owner himself or herself drives sales. He or she generates business through sheer determination and drive. He is the key account manager, mainly aware of all major deals. This star is not just great at selling he is great at ensuring customer orders are serviced and is also probably the best in sales operations. The sales success of the business is synonymous with the great sales person the sales superstar is.
In other cases, the entrepreneur is the domain expert and relies on lone wolves to run sales. This is far more dangerous as the entrepreneur has less control over customers and will have to be always on his toes to watch what is happening in the field.
Mid-sized tech businesses usually have a problem in retaining great sales talent. Due to lack of a clear plan to attract and build great sales people, they are mostly training ground for many salespeople before they move to greener pastures.
Over time, the company becomes gets into a vicious cycle of hiring and losing salespeople.
Both these situations are not scalable and unfortunately any small to mid-sized business has to go through this phase. Well, here are a few ways in which this situation can be de-risked and managed.
Find a way to systematize sales process. Without a process that can be monitored and managed, it is difficult to have a handle on the sales cycle.
The entrepreneur should definitely understand selling and should be comfortable about selling cycles though he or she may not be responsible for sales function. It is highly recommended that the leader sit in key sales meetings and understand to interpret sales KPIs such as leading and lagging indicators.
The leader should plan to put together a people plan where there is enough control in on-boarding new sellers and get them to be productive as soon as possible. This is so important as in selling time to revenue is the key.
If there are still struggles, hire a company like Agility Nexus that specializes in installing a sales system in your company. Paying for this services so worth it.
2. Go to Market Issues
Selling a $20/user/month SaaS product is lot different from selling a $50,000 Salesforce Automation services.
It’s foolish to travel across the country for an in-person demonstration to sell a $20/user SaaS product! Likewise, it’s foolish to expect an Enterprise client to commit to a $50,000 platform by simply visiting your website and entering their credit card details.
Clearly, each of these has a different Go To Market approach for which for which the ‘Customer Acquisition Cost‘ (CAC) has to fall in line with the revenue it generates.
Depending on CAC, sales models can range from freemium, web sales, online sales, inbound selling, channel selling, outbound centric selling to direct field sales force sales.
Getting this mix is so important to reach the market. If the leader makes a mistake in GTM then the business burns cash and is set back by few quarters.
Let’s see how this can be mitigated?
Come out with a well defined GTM strategy for your product and market.
Structure your selling team in line with your GTM strategy.
Structure your selling approach and selling cost in line with your revenue strategy.
Structure sales compensation in line with your GTM strategy.
Choose and apply the right prospecting process that is line with your GTM approach.
Tweak your product prices in line with your GTM approach.
If you need help in any of these areas, do seek help from a company, say Agility Nexus, that is focussed on helping you accelerate sales and shorten time to revenue.
3. Sales Process Challenges
I asked on of the mid-sized tech CEOs as to if he has a sales methodology or process to guide a sale?
Pat came the answer. “We have installed Salesforce CRM”.
Many mid-sized companies have implemented a CRM system like Microsoft Dynamics, Salesforce or Hubspot and think that they have a sales process! This is absolutely a wrong assumption.
Even in mature mid-sized firms, there is a lack of awareness as to how their ideal customers buy stuff! A lot is left to chance. While a good 40% are focussed the rest of them still follow ‘spray and pray’ approach when it comes to a selling process.
Any selling process should begin with an understanding of how your customers buy. You have to know what’s most important to them, how they evaluate new products and services, how and when they allocate budget, who needs to be involved, how decision are made, how terms and deals are negotiated, etc.
Knowing how the customer buys gives you the ability to map your sales process with the buying process of the prospects.
Let’s see how your sales process can be aligned to speed up ‘time to revenue’?
Understand who your ideal customer and buyer persona is?
Understand how they buy? What steps do they take before they are willing to spend money?
This includes how they evaluate new products and services, how and when they allocate budget, who needs to be involved, how decision are made, how terms and deals are negotiated, etc.
Now design a sales process in any CRM system in line with your customer buying process with right gates to check deal progress.
If you have doubts about establishing this, do give us a call. We might be able to help you.
4. Sales Competency Challenges
Finally, mid-sized technology companies should realize that the way customers want to be engaged by sellers (or selling cycle) has changed a lot in 2018.
With customers having more control over the sales process than ever before, salespeople must be able to engage them at every point in the buying cycle.
This reality is reflected in survey responses that identified several stages where first interactions with customers can take place: the prospecting stage, when identifying customer needs, when forming product or service solutions, when delivering the pitch, when closing the sale, and even during the follow-up stage.
The results suggest that salespeople must be skilled at both identifying a customer’s stage in the sales cycle and effectively engaging customers at every stage. They need to possess the sales competencies to establish rapport, initiate a dialogue, understand customer needs, position the solution, negotiate and close, and maintain the relationship.
Only by leveraging these competencies can salespeople move the customer from one stage to the next.
This is where training and coaching your salespeople to be precise and productive becomes very important.
If you don’t train, you don’t gain.
Let’s see how you can make your sales team effective and get results:
Tailor the right training program for them to lift their game. It should be a targetted intervention led by a trainer from the industry who understands the skills needed to get the job done. Generic training won’t cut the bill.
Further sellers should be coached over a period of time, say a quarter, to correct their mistakes and sharpen their skills to engage clients and win deals.
If you don’t have the in-house capability and need someone from the technology industry with experience in training hundreds of technology sellers, click on the banner below.
Meanwhile, if you have any questions in each of these topics, do give us a shout. We are a full cycle sales company that helps mid-sized technology companies simplify selling and win more deals.