Can the channel respond to mid-market buyers' unhappiness with vendors? 10 July, 2008 By Liam Lahey

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A new study from IDC's Sales Advisory Service, which surveyed more than 4,500 members of its business to business panel, quantified the level of satisfaction of mid-market customers with the sales engagement practices employed by their IT products and services vendors in the report, "Winning the Midmarket: Cost Effective Strategies to Improve Sales Performance".

"These buyers are savvy, more technical, and more impatient than most sales organizations realize," said Lee Levitt, director, IDC's Sales Advisory Service in Framingham, Mass. "Not only do they want a shorter sales cycle, they want more contact with technical resources, not more time with sales reps."

In fact, dodgy sales team performance is bound to have a detrimental impact on a technology vendor over time.

"The number one complaint buyers have is salespeople show up without proper information and they don't follow up," Levitt said. "If they did that, they could cut sales time dramatically. It's a matter of having the right information at hand; describing it to the buyer, and providing answers that address the buyer's problems . . . they're not listening to what the buyers are telling them.

"The same problem exists in the (large) enterprise; it's endemic throughout the industry . . . that is the depth of the problem we're facing in the IT industry today. Even the top tier companies face these problems in their sales organizations."

And from a channel perspective, most resellers make for lousy salespeople.

Levitt -- who headed IDC's channel research branch from 1988 to 1995 before leaving to run a couple of startups and ultimately returning to IDC's Sales Advisory Service two and a half years ago -- said he's seen it first-hand.

"In the channel world, it's a little bit different," he told eChannelLine. "Resellers that play in specific industries and smaller regional resellers tend to have more customer intimacy. Many started as end users and developed a specific application, used it, and brought it out to their peers. So they have a deep understanding of the customer's problems . . . they're in a position to do very well."

The challenge for these organizations is any of them aren't good at sales, he continued.

"I've worked with many of these organizations . . . I've coached and consulted and partnered with them and in many of these organizations it's two principals that get together and build an interesting technology and they're geeks," he said. "They're IT people they're not sales people, and they build a sales organization but they don't know how to manage it so they hire more geeks or people who aren't the right fit.

"In many cases, the salespeople in those small and midsized resellers really aren't good salespeople. They get messages wrong; they don't have good sales culture or sales processes . . . they've got good customer skill but not good sales skill."

The IDC survey showed many of the shortcomings mid-market buyers see revolve around poor communication, which IDC said could be corrected with training, coaching, and effort.

Meanwhile, Levitt said survey respondents told IDC the sales for small deals the sales cycle is 40 percent longer than it should be and for large deals it's 50 percent longer than it should be.

"The problem is the bigger the deal, the less useful information buyers get," he said. "Salespeople go in, they don't listen, they don't find out what the buyer really needs . . . they give the buyer the wrong information and the buyer doesn't get the follow up they ask for."

But there are some organizations that do know how to utilize effective communications internally and externally, Levitt said. He cited HP, Microsoft, and IBM for having a sales team member dedicated to running the sales engagement.

"They are project managers than run the sales engagement as though it was a development project," he said. "That's when you get operational efficiency . . . in very few organizations . . . do they actually capture this information."

To succeed in the mid-market, optimizing processes to reach buyers and engage them is critical, IDC said. Taking stock of what already exists within an organization and what processes are well-defined, and making that known to customers, would result in buyers knowing what to expect during the buying process.

"Salespeople are out in the field using charm and their existing Rolodexes to build business," he said. "In some organizations that's changing; Hewlett-Packard for instance looks at pipeline data as a corporate asset . . . they treat it like it has value and it goes all the way up to (CEO) Mark Hurd."

With a growth rate significantly higher than the enterprise market, mid-market competition would only become fiercer.

"We've got shrinking (IT) spending in some places and salespeople are fighting for that business," Levitt added. "Very few organizations have the understanding of how to run a sales force on a scientific and professional basis so they can actually continue to improve productivity."