Re-thinking the Enterprise Sales Force

Business,Startups by on January 25, 2008 at 2:32 pm

Conventional wisdom has held that if your’re selling software solutions to large companies you need an enterprise sales force.

The type of sales force is most frequently determined by your average selling price (ASP). If you can support $100K sales, then you use a field sales force. $10K to $100K and you use telesales (although I’ve seen it attempted at lower ASPs).

There are a number of reasons (beyond ASP) that would justify the use of a sales force (I’m sure I missed a few):

  • The sale requires buy-in from multiple people (often in different organizations). Software hosted within internal IT departments is a great example.
  • The decision makers are difficult to reach / difficult to discover. Some decision makers within an organization make themselves known and are easy to find. Others are uncomfortable with the spotlight and prefer to not have their name listed on the company website.
  • The product is complex (or requires configuration, or has subtle benefits). The product can’t be fully conveyed on a website or in a white paper (that customers rarely read). Customer’s can’t figure it out on their own.
  • The product is a commodity (or is perceived as one). The sales force gives customers a reason why they should buy a product from your company instead of your competitor’s.
  • The solution isn’t a priority . This could because the pain your product solves isn’t great, or the capability it provides isn’t substantial enough.
  • The product requires a commitment. It could be time invested to understand or configure the product, dollars to purchase it, or the opportunity cost of not selecting another solution.

The very nature of the products and the solutions they address requires a salesperson to sell them.

However, I’d argue that many products require a sales force because they are poorly designed. They are too generic, too complex, too undifferentiated…

Google (OK, Overture) completely overturned many assumptions about the enterprise sales force by creating massive amounts of value and by making it trivially easy to get started. 6 years ago it was inconceivable for a business to spend thousands a dollars a month on advertising without ever speaking to a sales rep.

I expect that one of the next waves of enterprise innovation will be software that doesn’t doesn’t require a sales force. It will require simpler products, that require minimal user investment, that address well-defined problems, and will very often be delivered over the web.

The products and services that accomplish this are going to price significantly below conventional enterprise-sales-based products. The conventional products will be structurally unable to compete at those price points.

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