In my last few posts I have described the transformation of software sales teams that has occurred over the past decade into a modern organizational structure. In the new paradigm, the role of the sales rep has changed from “doer” to “facilitator.” The modern sales rep quarterbacks a team of specialized resources to perform each key activity in the deal cycle. Specialized teams such as account development, value engineering and bid management perform the more specialized tasks such as lead generation, ROI analysis and RFP responses. The specialization introduced with this new organizational structure enables companies to use the resource with the best skill, best experience and best cost to perform each function. As a result, the sales team is best positioned to optimize the win rate and growth potential of the organization.
Best Skilled Resources
The specialization in the modern software sales organization ensures that the most-skilled resource is performing each task in the sales cycle:
- Account Development – These individuals know how to get people on the phone. They know how to leave voice mail messages that get call backs. They know how to send emails that get responses. They know how to navigate around executive gatekeepers to get C-level executives on the phone.
- Bid Management – These individuals have great technical writing skills. They know how to answer complex questions clearly and concisely. They know how to format Word documents with lots of graphics and tables into professional looking proposals that grab attention.
- Value Engineering – These individuals have strong financial skills to perform TCO and ROI analysis. Many have MBAs with management consulting backgrounds. Others come from industry with deep expertise in verticals such as healthcare, financial services or government.
- Solution Consultants – These individuals have technical “chops” to build credibility with the technical buyers. They know how to talk about technical architecture, information security and application integration. These individuals also have strong people skills to help the rep build relationships and influence stakeholders.
- Deal Desk – These individuals have strong financial and legal backgrounds. They understand contracts and risk as well as pricing and profitability. And they match up well against the highly-skilled, professional negotiators in the customer’s procurement department.
Specialization of the Software Sales Organization
Best Experienced Resource
Specialization also enables the teams within the modern sales organization to develop much greater depth of experience at performing functions.
- Lead Generation – Account Development reps spends 8 hours a day, 5 days a week trying to get people on the phone. As a result, these individuals are going to be far more proficient than a sales rep at lead generation. A typical rep might only spend a few days a quarter prospecting when his/her pipeline is light.
- Bid Management – Technical writers who work on 10 RFPs a month know exactly where to look for answers to common questions. And these individuals know exactly who to ask about challenging, never-before-seen questions. A typical sales rep might work on 1-2 RFPs per quarter. With each RFP the rep has to climb a different part of the learning curve as the ascertain where to find the answers to questions.
Specialization also benefits the customer as well by involving the most experienced resource at the each stage of the proces.
- Solution Consulting – Although line of business managers are increasingly involved in technology decisions, the IT organization remains the primary audience for most software sales. And IT people want to talk to someone who speaks their language. For IT buyers, the solution consultant is a much better resource than the sales rep.
- Value Engineering – These days most large software investments require a business case with clear ROI to gain executive buy-in. Buyers need help putting these financial justifications together. And the analysis needs to have credibility when presented to the CFO and the executive steering committee. For these investment justifications, the Value Engineering team is a much better resource than the sales rep.
Best Cost Resource
Good sales reps are expensive, commanding compensation packages of $300K or more. Many of the more time-consuming activities in the sales process can be performed by much lower cost resources. The specialization of the modern software sales organization enables companies to use the best cost resource for each function.
- Renewals, Upsells and Cross-Sells – It doesn’t make sense to pay an expensive hunter to work on renewals and small dollar upsells. A good farmer can do the same work at half the cost.
- Lead Generation – It doesn’t make sense to pay an expensive field-based account executive to spend their day cold calling. A strong account development rep can generate leads at a third of the cost.
- Proposal Responses – It doesn’t make sense to pay an expensive, top performing sales rep to spend their day writing proposal content. A good proposal writer can produce higher quality RFP responses at a third of the cost.
There is also an opportunity cost associated with distracting sales reps from their primary mission – closing the big deals that are needed for the company’s growth plan. Do you really want your reps spending 50% of their time cold calling, writing proposals and negotiating renewals?