Herculean Buyers, Lions, And Hydra — Do You Want One Throat To Choke, Or Reps That Understand The Products They’re Selling?

The proposed acquisitions of SuccessFactors by SAP, and of Emptoris by IBM got me thinking about the impact on buyers of market consolidation, in respect of the difference between dealing with independent specialists versus technology giants selling a large portfolio of products and services. Sourcing professionals talk about wanting “one throat to choke,” but personally I’ve never met one with hands big enough to get round the neck of a huge vendor such as IBM or Oracle. Moreover, many of the giants organize their sales teams by product line, to ensure they fully understand the product they are selling, rather than giving customers one account manager for the whole portfolio who may not understand any of it in sufficient depth. Our clients complain about having to deal with just as many reps as before the acquisitions. They all now have the same logo on their business card, but can’t fix problems outside their area, nor negotiate based on the complete relationship. It seems that buyers end up like Hercules, wrestling either with a Nemean lion   or with a Lernaean hydra.

The acquirers' press releases tend to take it for granted that customers will be better off with the one-stop shop. Bill McDermott, co-CEO of SAP, said, “Together, SAP and SuccessFactors will create tremendous business value for customers.” While Lars Dalgaard, founder and CEO of SuccessFactors, talks about “expanding relationships with SAP’s 176,000 customers.” Craig Hayman, general manager of industry solutions at IBM, said, “Adding Emptoris strengthens the comprehensive capabilities we deliver and enables IBM to meet the specific needs of chief procurement officers."

In practice, the customer:supplier relationship isn’t as unitary as these comments imply. An account manager’s existing relationship with a CIO may not help much when he tries to sell to a business buyer in HR or procurement. Forrester hears many complaints from clients about the challenges of dealing with fragmented sales structures broken down regionally and/or by product. OTOH, for those large vendors that did provide a single point of contact, clients complain that the poor guy didn’t know anything about half the products he was trying to sell. Forrester’s research identifies technology buyers’ desire for knowledgeable sales reps. For example, a recent survey found that 52% of business and IT decision-makers had terminated a technology buying process because the vendor couldn’t explain sufficiently or clearly how its products would deliver the desired business value. But if the acquirer understands this, and therefore keeps the acquiree’s specialized sales force separate from the general reps, then that will make it much harder for them to “expand the relationships with existing customers.”

Bottom Line: I’m interested in your views. Do you prefer to deal with a single account manager lion or the product-focused hydra? Do you like market consolidation that helps you rationalize your supplier base, or do you instead favor smaller discrete vendors, over whom you have more negotiating power?

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