Vendors: Read On To Understand Your Partners' Issues With Cloud

Peter O'Neill

 

Peter O'Neill here with some observations about cloud computing and channel partners. While cloud computing has been a boon for the tech industry in general, for channel partners the story is different. Channel partners have to deal with shrinking product margins, skills shortages, and new competitor types (including tech vendors themselves!). 

And the funny thing is: many vendors still haven’t internalized what predicament their partners are in. How else can you explain Microsoft executives berating their partners that “only 2% of you are in the cloud business” at their recent Worldwide Partner Conference – and then adding insult to injury by suggesting calmly that the partners could host future customer visits in Microsoft Stores, where they can see those MS cloud products (I count the Surface tablet in that list) they cannot even sell!

Forrester Principal Analyst Tim Harmon and myself are discussing these issues almost every day with technology vendors; in fact with B2B vendors in general, because cloud computing is affecting every sector now (including insurance, health care, etc.). Channel partners are changing their business model stripes — in myriad directions, and oftentimes as ungrounded "experiments."

In our new Forrester report, “The Shape-Shifting Tech Industry Channel Ecosystem”, we write about how the successful channel partners of the future will be those that operate under a hybrid business model umbrella, combining on-premises and cloud delivery, and IT and business value.

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Are You Doing Enough Customer Research? Yes, But . . .

Peter O'Neill

Peter O'Neill here: I attended a meeting of our FLB Sales Enablement Council earlier this month in San Francisco. The Council meeting included sales operations and content marketing executives from B2B companies Avaya, Cisco Systems, Haworth, HP, IBM, and Polycom. While the meeting is a facilitated discussion among peers, as per our standard FLB model, it is also more than that. It actively helps us analysts create new IP for our clients — we get their point of view and we test our own hypothesis before publishing reports. This meeting focused on the very important topic of defining the audience for our message (i.e., content and conversations) and messenger (i.e., the content channels, including sales). In an introductory exercise, the attendees listed all the groups and initiatives that they know are doing research with their customers. If you look at this photo, I think you’ll agree with what the Council attendees said after this exercise: “It’s absolutely frightening and quite chaotic!”  This photo shows the list of people or departments - the list next to it is by "initiative" and it is just as long.

I am reporting this because Forrester has just published my latest report for B2B marketers on content marketing, Establish Your Content Marketing Life Cycle; in it, I discuss some critical success factors around content marketing. One of the most important is doing enough of the right research about your buyers in the first place. However, the research I describe in the report isn’t even on these lists!

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Why Growing the Sales Force May Not Be Your Best Investment Strategy for Revenue Growth

Mark Lindwall

In a recent post, I introduced on a common scenario that sales leaders encounter whereby the CEO asks the chief sales officer to substantially add salespeople to the sales force to grow the bottom line. We see this strategy repeated over and over again and, unfortunately, it very frequently leads to deeply disappointing results for the CEO, investors, the board of directors, and the sales leader. Growing the sales force to grow the bottom line seems to make common sense, right?  Well not exactly. Here’s why.

 

What is the desired impact of adding salespeople?

First, let’s look at what impact the stakeholders envision with the “add salespeople” strategy.   Driving increased revenue and bottom line growth is anticipated from more salespeople acquiring more new customers.  These representatives may be deployed in new geography to broaden the company’s footprint, or they may be added within the existing footprint where, with more salespeople, the company can reduce the number of accounts per salesperson with the expectation that those reps will invest more time with each buying customer to sell more offerings (cross-selling) per company.  

 

Why doesn't adding salespeople produce increased revenue and bottom line growth?

There are really three factors for why significantly increasing the number of salespeople often doesn't result in expected financial growth.  These are:

  • Unrealistic timelines associated with the expected results 
  • Unanticipated expenses with adding and supporting salespeople 
  • Unanticipated risks
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The CEO Says Hire Salespeople! What's Next?

Mark Lindwall

Your CEO just gave you your marching orders.  “We’re going to organically grow the top line and profits by 30% over the next year.  We’re going to grow the sales force to make this happen.  I’ve discussed this with the Board and they agree with the strategy.  So tell me what you need to accomplish this and let’s move forward.” 

As a sales leader the opportunity to rapidly grow sales seems exciting.  You’ve got the backing of the CEO, and the Board of Directors.  You’ve got air cover.  You’ve got a mandate.  This is the stuff that great success stories are written about (and great resume’s), right?  Yes it’ll be hard work, but you can just envision a year from now when your boss recognizes your success in growing the business on a big stage.  

As the Chief Sales Officer, one of two options is now available to you.  

Option #1

Your boss, the CEO, told you to jump and you answer “How high?”  You’re going to do exactly what your CEO told you to do.  So you gather your management team and enthusiastically communicate the challenge and opportunity ahead.  They’re all for it and will help rapidly put the plan together.  You talk with your counterparts in Human Resources, Training, and Sales Operations (who will coordinate with Facilities and IT for the required resources).  They’re all behind you (after all, this comes from the CEO).  A week later, you present your formal plan to the CEO and tell her that interview scheduling is already in process.   You’re on your way to growing sales and being a visible leader in a great success story.

Option #2

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“Letter From Germany” – Interactive Design Agencies In Germany

Peter O'Neill

Peter O'Neill here with my next edition of the somewhat regular blog in which I highlight something important for you about B2B marketing in Germany. This time, I’ll give you some exclusive German market details from our new report “Interactive Design Agency Overview, Europe 2013” published by my illustrious colleague Jonathan Browne. In the report, fully available to Forrester clients, Jonathan analyzes and compares 54 European agencies according to various criteria:

1.        The type of work that the agencies do — from market strategy through web design to app development.

2.        Geographic and industry-sector coverage (see below for a specific cut for Germany).

3.        The size of projects, even by project type.

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Understanding How Value Adds Up for Buyers

Mark Lindwall

Lots of leaders believe that their sales force (and marketers, product developers, etc.) know their buyers. I disagree. Well, they may know their names and titles and a bit more. But let’s get real. Do the majority of your salespeople really understand how their buyers actually perceive value in what your company provides?  

Look, I love the sales profession and am committed to keeping it relevant in the new economy.  So I am not bashing Sales.  But "Houston, we have a problem" with selling, because too many of our sellers don't understand how buyers really calculate value.

What’s to Understand?

As a sales manager, sales leader, and business coach prior to joining Forrester, I’ve had thousands of opportunities to observe professional B2B salespeople from many companies and industries in meetings with prospective customers and clients.  I’ve reviewed countless business proposals and presentations before they were put in front of IT and executive buyers. This experience has informed me that far too many (and I mean FAR too many!) salespeople lack understanding of the basis for which a prospective customer is really making a decision.  Let's not point fingers. Let's just help salespeople figure this out.

Think about your own buying experiences.  Out of all of the salespeople who you’ve ever interacted with, how many can you think of who asked the right questions to really truly understood what you were trying to accomplish and what you and your company were most concerned about (other than price)?  For me, just a small percentage of salespeople stand out in my mind.  And they do stand out, even after many years.  How about you?

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Key Learnings from the Sales Enablement Forum

Mark Lindwall

Like many other sales leaders, the sense that tectonic shifts in the dynamics between buyers and salespeople are happening has been palpable to me for a number of years.  Researching these changes is why I joined Forrester just weeks before this year’s Forrester Research Sales Enablement Forum.  At the Forum, I had a number of surprise learnings or “aha moments” gained from colleagues and members of our Sales Enablement Council who are learning in real time as sales enablement practitioners. 

A Cross-Organizational System Issue

The seemingly endless search for the right “solution” to improve sales performance feels like a continuous plodding pilgrimage for many sales leaders.  What I learned at the Forrester Sales Enablement Forum, and have experienced with new illumination since, is why the silver bullet solutions (i.e., tools, programs, training, materials, promotions, technology) that leaders in sales, sales operations, HR, and sales training invest in really ever meet our expectations for delivering better overall top-line performance.

There is true chaos that exists in the selling systems of most companies. Various business functions scurry to support the effort of increasing sales. My core learning from the Forum was that we have to ask whether we even have a selling system. My realization in working with clients over the past five months is that most companies “enable” their sales forces through dis-integrated, costly, inefficient, and ineffective multifunction (as opposed to cross-functional) silos of investments that have a poor performance improvement yield. 

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Who exactly is “Customer?”

When we use the word “customer” who exactly do we mean?

I was speaking with a CMO and a VP of Sales this week - discussing their go-to-market strategy behind a product launch that is not performing anywhere near expectations. The symptoms they are facing are not uncommon - despite a flurry of sales and marketing initiatives, sales cycles are too long, win rates are low, and the deals that are coming in are too small.

When I asked, “Who do you currently sell to?” The CMO promptly responded, “We know our customers, it’s that the market that is changing too fast.” The VP of Sales agreed, “Our competition is catching up and our products are not as differentiating as they used to be.”

I had to pause and think before I could respond: “When did ‘market’ and ‘customer’ become two different things? Said differently, when was that last time your organization received a purchase order that was signed, ‘The Market’?”

[Silence]

Then the VP of Sales said, “We segment by company size, industry, and geography – and we certainly DON’T get purchase orders signed that way. We DO get purchase orders when we connect to people’s problems and build relationships by solving those problems. If we are focused on Markets and Products, we are focusing on the wrong thing; both Markets and Products are ultimately defined by the people who use them.”

To which the CMO added, "This is like trying to see something clearly after putting frosted glass in your own way."

I couldn’t agree more. Knowing your customer means clearly understanding:

  • The people who measure the value of your offering(s) with their wallets
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Use The Value Equation To Drive Successful Meetings

Have you ever been in a client meeting that started with all of the elements of success and then, without warning, augured into the ground? These situations have all of the characteristics of a TV sitcom except a TV sitcom is explicitly designed to cause discomfort for the audience, while a meeting is not.

Or are they? I need to tell you about a meeting that went horribly wrong and how the Value Equation would have made a very big difference. While this seems like a worst-case scenario, elements of this story happen much more often than we might believe and they undermine the value we create in the minds of buyers.

The CIO of a large global organization had called an all-day offsite meeting of incumbent technology providers with the objective of each provider presenting the CIO and three senior members of his IT team - Application, Infrastructure and Architecture - with information on new capabilities that will add value to the CIO’s strategy. Having clearly set the stage with this objective, each provider was given 60 minutes to present, and the host of the session went first.

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"What did Marketing ever do for us?" asks Sales

Peter O'Neill

Peter O'Neill here. Several people have asked me to re-post this blog from a few years ago. Here it is ..... 

It is January, 2015, and technology sales reps Reg, Xerxes, Francis, and Loretta have been to the movies to watch a rerun of Monty Python’s Life of Brian, probably one of the best film comedies of any time. At dinner afterward, they are reliving the scene where the commandos discuss “what did the Romans ever do for us” when one of their marketing colleagues stops by to say hello. After the marketing manager leaves, they continue their discussion.

REG:

Now there’s another point. Those people in marketing. What have they ever done for us?!

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