The IT industry is characterised by years of growth. Often the problem in companies is that orders cannot be processed, or are processed with delay, due to a lack of staff. Not that the impression should now arise that salespeople in the IT industry have an easy life, but the requirements for sales efficiency in IT companies are in part somewhat differently structured. The recommendations on sales efficiency in industry apply just as much to the IT industry and can be read in this article. But there are additional factors influencing sales efficiency in the IT industry that can be taken into account:
- IT is a credence good
- Implementing the offering can take years
- There is often a lock-in
- Cross-selling can concern a different department in the company
Factors influencing sales efficiency for IT companies
IT is a credence good
Unlike products, software can be experienced far less easily. While salespeople at industrial companies can demonstrate machines, offering demonstrations in IT are considerably more difficult to carry out. Often customers are simply given a test access. This can have the consequence that the customer perceives the offering quite differently from the salesperson’s intention. Conversations also often drag on. All the more reason to consider the topic of knowledge-building in IT sales. Otherwise, the salesperson can easily end up fighting against a ‘self-inflicted’ attitude at the customer, which costs time and energy and increases the risk. At the start, it is important to assess the level of knowledge in the customer’s buying centre and to systematically strengthen the customers’ knowledge through the sales conversations, thereby building trust. This goes considerably beyond classic objection handling or solution selling. Since the IT offering cannot be ‘touched’ and time is usually far too short, salespeople need to be able to address the respective employees in a targeted way, with options in their approach, in order to eliminate knowledge gaps.
Implementing the offering can take years
A very big misunderstanding that we have heard from IT salespeople for years is that they can only communicate about the respective project with the customer once the implementation is successful. In principle, after successful implementation, the project should be communicated externally, thereby strengthening referrals. But what tends to be overlooked, due to a lack of knowledge in the area of psychological fundamentals, is the topic of cognitive dissonance. IT projects can quickly cost several hundred thousand francs. This means that, after signing, there is great uncertainty among customers about having made the right decision. Usually these people are not aware of their own uncertainty. Observe yourself when you make a larger purchase of an offering that you don’t immediately hold in your hands. Do you perhaps go back to the manufacturer’s website until the offering arrives, read the email again, and think about the offering’s pros and cons? No? Completely fine — but most people can observe cognitive dissonance in themselves when they try to make themselves aware of it. For the salesperson, this means it is essential, after the purchase, to shower the customer with reinforced information during the so-called ‘honeymoon phase‘.
For example, it is advisable to post the won project on LinkedIn together with the customer immediately. This reduces the customer’s cognitive dissonance and helps with one’s own referral well before the implementation, which can, after all, take years. The message is not ‘we have successfully implemented project XY together’, but rather: the company wants to strengthen its XY and is relying on our offering to do so. So in this phase, the added value for the customer — which was, hopefully, worked out before the sale — is in focus.
There is often a lock-in
Is an IT salesperson even a salesperson, or rather a relationship manager? A customer has installed an ERP system. How likely is it that this company will rip out the ERP system again after three years? Rather unlikely. In addition, successful salespeople receive ever higher sales targets for reaching their bonus. That’s why it is so important, especially for IT companies, to attend to cross-selling and additional services from the very first customer conversation. Since systems are also increasingly merging — e.g. marketing-automation systems offer CRM functions, and CRM systems increasingly offer marketing-automation functions — it is important to keep an eye on the further development of the customer’s IT ecosystem. We see, especially at smaller IT companies, that no development strategy is worked out with customers. The company sells a core IT service with a few additional services and, after a certain time, this core service becomes a commodity and the pressure on sales rises. A cross-selling and a systematic selling-innovation concept are vital for survival, especially for smaller IT companies.
Cross-selling can concern a different department in the company
Previous sales approaches talk about the customer and the buying centre. Following the logic of the previous point, cross-selling is central for IT companies. Depending on the possibilities, however, it can be that the company’s additional IT offerings are used in a completely different area of the company. For example, a company offers an ERP system and wants to extend it with marketing automation. While the sale of the ERP system will mainly have concerned the COO, finance and product management, now marketing, sales and service need to be convinced. For IT sales, this means obtaining as broad an overview of the entire company as possible from the start (if one’s own offering offers cross-selling possibilities here). Then important information about the respective target person can be gathered early and used for cross-selling. With the shift of IT to the cloud, connecting different systems has become considerably easier and cheaper, which can, however, also make cross-selling considerably more challenging. Every department wants the system that is best from its point of view.
Conclusion on sales efficiency for IT companies
The general recommendations on sales efficiency, such as customer value and support plan, also apply to IT companies. With regard to sales efficiency for IT companies, however, there are particularities that are often not taken into account. The four factors presented allow sales efficiency to be improved considerably. This is closely connected with systematising the sales approach and expanding customer-data acquisition. Customer-potential analysis in particular is thought of too narrowly and carried out too unsystematically. Improving in this area becomes a must, since offerings in the cloud are increasingly merging.
