Think your IT department's parochial? Try selling to SMEs
Corporate decision-making's got nowt on non-techie MDs
It’s been a few years since I carried a quota, but over the course of my sales career I have signed some pretty substantial and complex deals in the large corporate space. However, it was the time I spent working with IT channel partners selling enterprise resource planning (ERP) systems into smaller businesses that I had to think the most.
At the higher end of the market, it was possible to extract large chunks of change from customers without ever talking to anyone outside of IT - apart from, of course, those nice people in procurement.
In the SME space, though, I quickly learned that every sale of any significant size is a very explicit business decision made by a businessperson, often the owner of the company.
I remember one situation where we had a proposal on the table for a system underpinned by a couple of IBM Unix boxes, the intention being to implement a rapid failover scheme. We were close to signing the deal when we were called into the old-school MD’s office at the last minute. He opened the conversation by thanking us for our quote, but said he had a question. Then he explained:
My IT man tells me that you are suggesting we buy two, let me get this right, ‘R-S-six-thousands’, and that these are very high quality, and I note very expensive, computers. And the reason we need two is so we have a spare. My question is, isn’t this like you proposing that I buy two Rolls Royce motorcars, then keep one the garage in case the first one breaks down? Sounds a little extravagant to me.
At the end of day, the guy wasn’t impressed by the conversation that followed, in which the pre-sales consultant and customer IT bod got all enthusiastic about state-of-the-art HA configurations. After talking through the alternatives, the proposal was revised to include one Unix server, some redundant storage, and a rapid-response support contract.
For the system concerned, the MD did the mental arithmetic on the cost of downtime, and decided it didn’t justify the expense of the second machine, no matter how much we explained that it wouldn’t really be sitting there idle.
The IT pro knows their stuff, but you might not be selling to them
This is just one of the many sales situations I found myself in which I ended up discussing options with someone who knew their company inside out, and looked at IT investment decisions purely from a business perspective. Occasionally the in-house IT pro might sneak something through because it would be interesting to play with, or look good on their CV. Unlike the large corporate sector, however, you could rarely make a sale on that basis.
Having said all that, since becoming an industry analyst and spending a lot of time researching the impact of different types of buying behaviour, I have learned that this hard-nosed cost/return-on-investment-driven approach to IT investment often adopted by owner-managers is the reason why so many SMEs have such dodgy IT infrastructure.
While IT departments in larger organisations are often far from perfect - and are still constrained by parochial attitudes at line-of-business level - they at least try to think in a joined-up manner when making infrastructure decisions.
The best decisions generally stem from IT and business people collaborating on an equal footing in the planning and buying cycle. It’s a shame that demarcation, politics, mistrust and simple miscommunication still too often get in the way of this. As the lines blur between consumer tech and business IT, I see hands being forced in some organisations. The IT/business alignment goal is still a work in progress for most.
In the meantime, if you are involved in IT sales, we would be interested in your experiences of the difference between SMB and large enterprise selling. Since I was in the field over a decade ago now, I am told that corporate decision-making has become a lot more business-driven. Is that something you have seen?
Even if the trend is in that direction, I still hear about IT-led deals that appear to be driven by everything from pure technology enthusiasm, through industry fashion, to IT self-interest and protectionism. I guess you are still seeing some of the old familiar motives and games as well.
Anyway, tell us your stories and give us your views. And back to the title of this article – let us know what you think on the question of whether it takes more skill to sell into SMEs versus large enterprises. ®