Sales & Consulting - Post 1 Teaming for success
Sales & Consulting relationships in B2B tech so 2+2 = 5 – Part 1 of 3
At Day Five clients frequently ask us how they can increase overall sales productivity and it is a simple enough question. Improving internal team collaboration is an easy win for many across business functions for example sales, marketing, consulting, development, support, finance, HR etc. This sounds obvious but landing this can be tricky and time consuming in an industry driven by quarters and short-term thinking.
In this series of three posts, I wanted to look at what we have learned about sales and consulting productivity. Prior Day Five posts included on our website looked at sales and marketing. Our opinions are based on 30 + years of field B2B experience and 4th years learning as trainers. We will outline what we know and some considerations we have faced in our respective careers to help you fathom out the answer.
Some contexts - the Tech Eco System is complex, and mistakes frequently occur Over the last 20 years I have heard many Tech B2B CEO’s and SVP’s say the following when I ask about the how their Sales and Consulting teams cooperate and work in practise:
We are a sales business first and consulting is a support / delivery function. Our priority is meeting monthly, quarterly, and annual software product targets and services revenue is a secondary driver
Software product sales (SAAS) is the key driver for our market value / market capitalisation, not services
Sales exists to drive new name business and consulting exists to deliver the solution and look after the customers.
OR you get quite different answer depending on if the company is in the services game or serious about customer renewals:
Customers only buy from us because of our consulting business expertise, our critical mass, and vendor product IP
Consulting is pivotal in ensuring the customer continues to regularly unlock value as we continue to release new software functions
SAAS profitability is all about subscription renewals and consulting exists to keep the customer satisfied and renewing each period
We are a consulting business first and sales exists as a business necessity
Delivery is 100% via our business partners, (we will deal with partnering in the final post)
Today CEOs are adapting their business moving from On Premise to SaaS cloud deliveries and developing their sales and services proposition. For many this started a decade ago and for some recently. Several of the choices we make are best guess in a fast-moving market. As the Irish comedian Dave Allen used to say to people asking directions by the roadside:
“I wouldn’t start from here if I were you”
Deciding what to do is never easy and getting consulting and sales working productively is a key enabler in any journey. The route you take is impacted by many factors about your business such as:
The company exists to drive the market adoption of its own products / software IP, and the firm is the product author or major software suite provider
The company exists to exploit a major software vendors services eco system party and to sell related IP
The balance of in-house solutions compared with taking third party alternatives is chosen as a means of diversification / reducing development risk, (or having a Plan B)
Whatever the forces in play getting sales and consulting to improve how they collaborate is within the grasp of many companies and this is something we can all control. So, in this short series of posts, we are going to look at some of the common issues that get in the way of great cooperation between sales and consulting teams. The Tech Eco System is a complex one and it is crucial to have collaborative teams that can work together and learn together to improve overall productivity as a business. Starting with the “Pink Elephant in the room”
Sales and Consulting functions require quite different skillsets. If you ask one hundred consultants if they want to go into sales, then 15% that say they would relish the opportunity with the rest saying they would rather poke cocktail sticks in their eyes! Conversely if you asked one hundred salespeople if they would like a shot at consulting, you would get a similar viewpoint. Sales and consulting staff can make challenging “bed fellows” as the character traits for both roles can be very varied and understanding this difference is key to ensuring collaboration occurs.
Sales priorities number 1, 2, and 3 is getting signed contracts / orders and hitting target
When a business is driven and valued by increasing product sales revenues (either as an ISV (Independent Software Vendor) or as a main product vendor) then it is usual for sales to be the lead function. I have spent the last 20 years directly working for SAP, Oracle, then 3 years working in the Microsoft, EPiServer, and Magento II market. In software companies Sales has a massive impact on ways of working and the function is driven by monthly / quarterly / and annual KPI’s, (in addition to the normal revenue targets).
Whilst many software vendors have huge development resources and budgets, current quarter and annual fiscal targets are usually everything in terms of priorities. You only must look at the tech communications giant TWILIO who dropped from a market cap of $70 billion to $8 billion last quarter because of weakening operating margins. There are many reasons for this collapse, but sales costs and productivity have come under the spotlight.
A missed quarter or a poor margin / revenue forecast has a hugely negative impact on the valuation of the company. A series of missed quarters is often the death nell for anyone involved be it the salesperson, manager, VP, or indeed the CEO. Growth aspirations are commonly set at 20-60% of the previous year exit. Every year without fail growth budgets are set. The task is given to the sales leaders and the salespeople to executive and make the plan.
The same applies in the Independent Software Vendor (ISV) sector where the pressure usually comes from the VC companies who have invested in an ISV growth story. Growth is mandated by the owners and growth is expected, and many sales personnel are well used to the quarterly / annual “stand up and be counted” challenge. Salespeople are expected to lean forward and show ambition, (whether they have a solid forecast for the quarter or whether the forecast is like a deck of cards).
Having worked to this regime for sixty-eight quarters I can count hundreds of sales professionals who lean into the task and make the personal sacrifices needed to perform at this level. The upside for those involved is great pay and reward as well as the buzz you get competing and winning in fast moving markets. The downside is that relentless pressure can be unhealthy in terms of poor home life balance and real threat of a losing your job and income. Having seen this happen it is easy to look back and say this is the grim reality of sales when it is not going to plan. Being told your performance is weak, not acceptable, and not good enough is hard to hear for any human being.
Bad behaviour – so is it excusable?
Due to this pressure salespeople can at times trample over the support departments like legal, consulting, development, and support functions at Quarter end. The justification for poor behaviour is “I needed to get the deal over the line,” “we needed to promise extra days because the customer was threatening to delay the contract,” “we needed to ship the beta version because the client needed the new user interface.”
When a deal is committed to forecast then it is ridiculously hard for a consulting / finance and legal, or support function to say at the 11th hour:
“Don’t do it we do not have enough days to deliver this” or “Don’t ship this version it’s still untested” or “You need to charge for that support uplift as it’s a new product”.
Do not be surprised if the salespersons’ reaction to this is to go crazy when faced with 11th hour internal interventions. Most people cannot cope with surprises when they are instructed to close and “make sure it happens.”
The net result is that deals do get done and the commercial pressure to close a contract is as real as it gets. In my view this is not going to change because the consequence of failure can be career limiting. Equally the reward for performance and growth are still huge for the salesperson, the line managers and business owners. Salespeople are however fallible. When under pressure people do stupid things that will cost the company money down the road.
Respect and understanding
So, the key to great sales and consulting relationships, like in any healthy relationship, is to respect each other’s point of view. Sales is a team-based effort, and your success is as much about internal credibility as it is about gaining the trust of the client. The best salespeople are the ones that keep consulting on side, and this takes time, effort, and patience. They are the sort of people that do not get the 11th hour surprise as they are in control of the internal and external problems that arise.
Consulting leaders and consultants would do well to think about the pressures being applied to the salesperson before judgement is passed. To quote another famous Irish saying:
“If you dig a grave for others, you might fall in it yourself!”
Salespeople who consistently fail to deliver orders into the business will be let go. Most salespeople get this and take the “Kings Shilling” knowing that they may be called to account at some stage and lose their job. A solid capable salesperson should be comfortable saying “Mea Culpa” when they have lost an order. You cannot win every deal and the best salespeople are realistic, self-critical, and accountable.
The worst salespeople you will encounter will usually blame others and lack the courage to admit if they have been outsold. Sales is extremely rewarding buts it is a brutal profession as the loss of a contract or order is black and white. Consistent losses will mean you will be let go with all the consequence that goes with a loss of earnings and livelihood.
There are no prizes for doing a decent job and coming 2nd or coming last. Accountability usually lies with the sales lead and that is the risk we take.
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Will O’Brien - Founder and Director Day Five Consulting