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Buying behaviours are changing. Software packaging and pricing strategies are being forced to adapt in order for partners to remain competitive. Countless new products are being offered to the market, many of which were born in this new and constantly changing world of CRM and ERP software sales.
With so many changes to both the competitive landscape and the buying preferences, it’s becoming increasingly important for partners to look beyond traditional ways of marketing and selling. Generally we see sales defaulting to marketing to deliver leads, which they quickly deem unqualified. Marketing responds with a need for more visibility into the results, because they are unable to determine why every lead is unqualified. And round and round they go. This doesn’t help anyone drive revenues or succeed in their role.
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Summer is ending, back to school signals the start of the Fall Selling Season or does it?
Take a quick look back and compare the following benchmarks for your company over the past four years:
- The number of new customer additions (new license sales only – not transfer of VAR)
- The number of deals you chased that you didn’t win.
- Your cost of sale (includes all your sales rated costs + marketing costs dived by the number of net new customer additions).
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A Changing Tide
Sales professionals are increasingly encountering an extremely well-informed buying community that is more often than not looking towards unbiased 3rd party sources or peer groups to validate vendor claims rather than to the vendors themselves. This significant shift in engagement behaviour has far reaching implications on sales strategy as prospects no longer need to identify or expose themselves in advance of a purchasing decision.
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How many times have you heard (or said) these words over the course of your sales career?
With the exception of the past couple years, the ERP/CRM sector has been blessed with a long growth run that produced a predictable stream of engaging prospects looking to either implement or change their business systems. Then all of a sudden the quality leads stopped coming. So what happened? A lot happened; and it will get worse, not better, moving forward.
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Recently Salesworks sent out a very simple, one question survey to a bunch of ERP / CRM partners in an attempt to get a quick tem
perature check of what is keeping them awake at night.The question we asked was:
- What is the biggest concern / issue you face in 2012?
We received hundreds of responses and more than 48% of these responses were related to a lack of sales leads. The people have spoken and they want to know, how exactly can you generate B2B leads.
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Optimize your B2B Software Sales
Changing customer buying behavior has resulted in the rapid proliferation and availability of trial engines; publicly available software configured to provide prospects and tire-kickers alike with unfettered access to their full capabilities.
Software publishers and their partner communities have made (and will continue to make) significant capital investments in robust trial engines with an expectation that the trial experience will provide sufficient “proof” and “comfort” to intelligently inform and drive an accelerated decision making process. If only it were that easy.
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During this time of year, we traditionally sit back and reflect on what went well during the past year, what didn’t work so well, and what we plan to do for the next year… SOS (Same Old Stuff).
So, last year our industry saw that there finally seems to be some light at the end of the tunnel. Partners I have talked with around the country say that it appears as companies are finally beginning to think about opening up their wallets and making investments again.
Optimism for the ERP/CRM Industry
Overall, partners were telling me that business for the year was pretty good, a fair number say quite good, and the outlook for the coming year is quite optimistic. I believe their optimism is based on the fact that the average life cycle of a traditional ERP / CRM System has been 7 to 10 years. These optimists point to the fact that Y2K forced lots of companies to break their cycles and prematurely buy systems to be date compliant, resulting in a much higher number of systems purchases in the late 90s.
Some quick math says that all these systems are now 10 to 12 years old, overdue to be changed out. Many industry experts say that if the country hadn’t gone into the economic downturn that we went through the past two years, we would have banner years for our industry. I used to agree with them.
Lasting Effects of the Great Recession
However, as I see the impact that this economic downturn has had on typical companies, I get concerned. I get concerned because during the past 18 to 24 months, I’ve seen companies radical changed their budgeting process.
In my belief, this is because in the last 10 or more years American Business had become FAT. By this I mean, that when CEOs did budgeting they looked at major initiatives put forth by each department, skimmed the content, verified the bank account and granted the overwhelming majority of the requests received.
During this economic downturn CEOs got scared, they held onto money. The fears of not knowing exactly how their company might be impacted forced them horde cash, and trim any non-essential expenses. CEOs from all size companies formed the “habit” of justifying every single line item in their budgets. If there wasn’t a compelling business reason to spend the money they didn’t. This is what made the past couple of years become bad years for our industry.
Money Diets Become Lifestyle Changes
I believe that even though there is the prediction of improvements across the board, these same CEOs are seeing that after being forced on a diet for two years, they feel pretty good. In fact, after shedding some excess weight, they are more competitive than they have been in a long time. They want to emerge and stay lean/strong. They want to rebuild bank accounts and improve overall financial strength. They will not hire new people until they have no other choice.
Meanwhile, they will get as much as possible out of what they already have. They will not spend money unless they feel it is a smart investment. There is no going back to the old ways of blessing budgets just because…
This means CEOs will continue follow their newly formed habit, and to scrutinize budgets, refusing to approve anything that does not present a strong business case.
90s Demos Don’t Make the Sale in 2011
Partners that believe they can simply show up, demo, befriend and sell to companies will have a rude awakening as the game has radically changed. While this strategy may have worked in the 90s, it will not work anymore. The past two years are proof.
Successful partners will be the ones that can best develop strong business cases and compelling reasons for CEOs to fund the projects they bring forward.
2011: Focus on Strong Business Cases & SaaS Offerings
If I still ran a partner business today, the one thing would be looking for is a team of people that were experts in creating and presenting strong business cases to “C-Level” executives.
By the way, the other part of my business I would be developing is my SaaS offering. SaaS is not a trend, it’s a tsunami and it is coming quick. More on this next time…
So, as you plan for the coming year, make sure you avoid using the SOS!
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