Technology Buyer Insight Study by Centro de Gestión del Conocimiento

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? by Scott Santucci for Technology Sales Enablement Professionals

Making Leaders Successful Every Day

For Technology Sales Enablement Professionals

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? Addressing Gaps In How Effectively Salespeople Engage With Executives by Scott Santucci with Eric G. Brown and Robert Muhlhausen

Exec uti v e S u m ma ry To avoid being relegated to commodity status, technology vendors are refining their sales strategies to engage with higher-level decision-makers earlier in the problem-solving process. Getting a meeting with these executives is hard, but turning that meeting into a successful first conversation takes a lot more effort. Forrester’s survey of senior buyers highlights the gap between what they expect and their actual experience with salespeople. In order to close this preparation gap, sales enablement professionals must start shifting the sales support content and training agendas from focusing on their own company and offerings to focusing more on the specific people that sales teams will encounter and the realities those customers deal with.

tab l e o f Co nte nts 2 Executives Do Not Get Much Value From Engaging With Salespeople 6 Customers Speak Out About Sales Preparation 7 Change The Sales Support Design Point From Products To Customers WHAT IT MEANS

8 Four Steps Sales Enablement Pros Can Take To Refine Their Sales Strategies 9 Supplemental Material

NOT E S & R E S OUR CE S Forrester surveyed 166 senior-level executives who are involved in purchasing technology products or services and who work in companies with annual revenues of at least $500 million. Forrester also conducted 40 confidential interviews with executive-level buyers in finance, HR, marketing, sales, and IT departments and 40 quota-carrying salespeople from a cross section of technology product and services vendors in North America and Europe.

Related Research Documents “Technology Buyer Insight Study: Executive Involvement In The Buying Process” February 18, 2010 “Technology Buyer Insight Study: The Expanding Role Of Procurement In The Buying Process” February 17, 2010 “Technology Buyer Insight Study: Preferred Or Exclusive Vendor Relationships” February 16, 2010

© 2010, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

Executives do not get much value from enGaging with salespeople As technology CEOs continue to demand more value-added sales forces capable of engaging at higher levels and equipped to cross-sell more effectively, sales leaders are left with the difficult task of finding leading indicators or other metrics to demonstrate evidence of the shift from the current state to a new sales model. Most sales force transformation objectives involve a focus on a consultative approach by which account executives are able to co-create value with their buyers. In order to determine how effective the industry is at shifting to a more value-added sales model, we surveyed and interviewed executives to get their opinions of how well they are being engaged.1 Findings show that:

· Salespeople are well-prepared to speak about their company, products, and services. In

our survey, 88% of our respondents indicate that the salespeople they encounter are usually knowledgeable about their products and services — with very little variance between IT and business roles (see Figure 1 and see Figure 2).

· Few executives feel that salespeople can empathize with what they do for a living. Overall,

only 34% of executives believe that the salespeople they speak with usually understand their roles and responsibilities, with a slightly stronger sense among business leaders. Most interesting is the gap between executives from small organizations, 46% of whom believe that salespeople can usually relate to their roles and responsibilities, and executives from larger enterprises, where only 35% feel this way (see Figure 3).

· Executives don’t feel salespeople understand their businesses. Business leaders (24%) are

slightly less likely than IT executives (29%) to believe that the salespeople they encounter are knowledgeable about their specific businesses. Again, the gap is most pronounced by company size, as only 11% of executives in smaller companies believe that the salespeople they encounter understand their businesses, while 33% of executives in larger organizations hold similar opinions.

· Most executives don’t believe that salespeople have relevant examples to share with them.

Across the board, only 34% of buying executives think that salespeople usually have relevant examples or case studies to share with them in support of the buying process, and only 38% feel that reps are prepared for the questions they ask. For the first issue, however, the difference between small and large businesses is the most pronounced. While 54% of executives in smaller businesses believe that salespeople can more regularly share relevant examples with them, only 27% of leaders in larger enterprises believe this.

· As a result, most executive-level sales calls fail to add value. Only 15% of executives believe

that their meetings with salespeople are valuable and live up to their expectations (see Figure 4). Not surprisingly, with such low marks on the value of that first meeting, the probability of a given salesperson securing another appointment is extremely low, as only 7% of executives say they usually accept a follow-on meeting (see Figure 5).

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

Figure 1 Executives Don’t Believe Salespeople Are Well-Prepared To Engage With Them “When you meet with a vendor salesperson, in general how often are they prepared for the meeting with you in the following ways?” (respondents who answered “Usually”) Business leaders

IT leaders

Overall

Knowledgeable about their company and products

88%

Knowledgeable about my industry

54%

57%

55%

Understands my issues and where they can help

34%

43%

38%

Prepared for the questions that I ask

40%

36%

38%

Can relate to my role and responsibilities in the organization

38%

29%

34%

Has relevant examples or case studies to share with me

35%

33%

34%

Knowledgeable about my specific business

24%

29%

27%

Base: 166 North American enterprise business and IT decision-makers Source: Q1 2009 North American Buyer Expectations Of Sales Interactions Online Survey 56792

Source: Forrester Research, Inc.

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

Figure 2 Salespeople Are Seen To Lack Understanding Of Both Business Leaders And IT Executives “When you meet with a vendor salesperson, in general how often are they prepared for the meeting with you in the following ways?” Business leaders

IT leaders

Overall

Rarely

Occasionally

10%

11%

10%

Usually

88%

Rarely

Occasionally

41%

Usually

54%

57%

55%

Rarely

11%

10%

Occasionally

57%

47%

52%

Usually

34%

43%

38%

Rarely

Prepared for the questions that I ask Occasionally

56%

60%

58%

Usually

40%

36%

38%

Rarely

23%

16%

Occasionally

38%

64%

50%

Usually

38%

29%

34%

Rarely

21%

19%

20%

Occasionally

44%

48%

46%

Usually

35%

33%

34%

Rarely

19%

11%

15%

Occasionally

57%

60%

58%

Usually

24%

29%

27%

Knowledgeable about their company and products

Knowledgeable about my industry

Understands my issues and where they can help

Can relate to my role and responsibilities in the organization

Has relevant examples or case studies to share with me

Knowledgeable about my specific business

Base: 166 North American enterprise business and IT decision-makers Source: Q1 2009 North American Buyer Expectations Of Sales Interactions Online Survey 56792

April 19, 2010

Source: Forrester Research, Inc.

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

Figure 3 Sales Forces’ Ability To Address Vendors Varies With Company Size “When you meet with a vendor salesperson, in general how often are they prepared for the meeting with you in the following ways?” (respondents who answered “Usually”) Company revenue $500M to $999.9M (N = 28)*

$1B to $4.9B (N = 56)

$5B+ (N = 82)

Knowledgeable about their company and products

86%

90%

Knowledgeable about my industry

54%

45%

63%

Understands my issues and where they can help

46%

27%

43%

Prepared for the questions that I ask

39%

37%

Can relate to my role and responsibilities in the organization

46%

27%

35%

Has relevant examples or case studies to share with me

54%

36%

27%

Knowledgeable about my specific business

11%

25%

33%

Base: 166 North American enterprise business and IT decision-makers Source: Q1 2009 North American Buyer Expectations Of Sales Interactions Online Survey *Note: Percentages shown for the $500M to $999.9M category are directional indicators only, due to a small sample size Source: Forrester Research, Inc.

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Figure 4 Executives Find That Appointments With Salespeople Fall Short Of Expectations “How often would you say that your meetings with salespeople are valuable and live up to your expectations of the meeting?” Business leaders

IT leaders

Overall

Never

Rarely

22%

21%

22%

Occasionally

65%

60%

63%

Usually

12%

19%

15%

Base: 166 North American enterprise business and IT decision-makers Source: Q1 2009 North American Buyer Expectations Of Sales Interactions Online Survey 56792

Source: Forrester Research, Inc.

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

Figure 5 Executives Will Infrequently Accept Follow-On Appointments With Salespeople “Only thinking about your initial meeting with a vendor salesperson, in general how often do you accept follow-on meetings?” Business leaders

IT leaders

Overall

Never

Rarely

37%

32%

35%

Occasionally

55%

59%

57%

Usually

Base: 166 North American enterprise business and IT decision-makers Source: Q1 2009 North American Buyer Expectations Of Sales Interactions Online Survey Source: Forrester Research, Inc.

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Customers speak out about Sales preparation Regardless of company size and of whether they come from a business background or an IT organization, few executives like to have their time wasted. In our interviews with senior decisionmakers, they shared with us a variety of examples of the impact that lack of preparation has on them.

· To protect their time, most executives have tricks to get out of meetings with sales teams.

Perhaps the most common is for the executive to have an administrative assistant either send a text message or interrupt the session 15 to 20 minutes into the meeting with a call they might have to take. This gives the executive the option of saying, “Yes, I need to take that call,” and ending the meeting or, “No, I’ll just call them back,” and continuing the meeting. Asked how often his meetings with vendor salespeople actually end by accepting these “calls,” one CIO of a pharmaceutical company reflected that he will choose to take the call over 50% of the time.

· A lack of executive empathy generally relegates salespeople to subordinates. There is a

growing trend for many business leaders to want the capabilities that technology offers but not the jargon associated with it. For example, one VP of sales shared with us that he’d love to do more of the sophisticated analysis he knows is available through business intelligence tools, but the suppliers keep giving him examples that just don’t relate to his reality. Since neither the software vendor nor the IT organization can speak his language, he’s confused and uncertain about moving forward and admits that, to boost his team’s productivity, he’ll probably shift his focus to something else that he understands more clearly.

· Understanding an executive’s business is important — and hard to get your arms around. Executives understand it’s their job to be experts in their business and thus don’t expect to have business strategy conversations with salespeople. However, they do prefer to work with

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

salespeople who understand the nature of their business, what they do, whom they compete with, how they make money, and how they are organized. This is the core reason that there is such a huge difference between small and large company executives about how well they feel salespeople understand their companies. A large organization like UPS, Merck, or American Express is exponentially more complex than a midsize or smaller business. Being able to “follow the money” — a technique most salespeople are trained on — requires far different skills in a very large, highly matrixed organization than for a smaller and more centralized firm. Change the Sales Support design point from products to customers One of the more common conversations we have with VPs of sales concerns their desire to move their sales organizations away from a product-led, transactional mode to a more consultative or value-driven model. However, when we review the training programs created by sales groups or audit the content of supporting materials and demand generation programs, the overwhelming majority of the supply chain behind salespeople is about their company and products. Is it any wonder that 88% of executives believe salespeople are usually prepared to talk about their own company and products, yet only 27% think they understand the business they are trying to sell to? In order to accelerate their strategic objective of transforming the selling model, sales enablement professionals must begin changing the orientation of training and supporting resources from an “inside-out” to a more “outside–in” perspective.

· Different customer types require different enablement strategies. Most vendors are beginning to align their sales forces by company size — leveraging indirect channels to service smaller companies, creating dedicated teams to focus on small and midsize businesses, and creating named account programs for the larger accounts.2 However, the needs for each vary greatly. For smaller businesses, a good starting point is to place a greater emphasis on how to quickly understand their business and anticipate and answer their questions. For larger organizations, it would be more useful to put a lot more effort into understanding how to navigate large and matrixed organizations and a greater focus on more sophisticated case studies that demonstrate an ability to solve complex problems.

· Confronting reality is a key to success. Most sales training programs provide training on how

to have a conversation with a generic executive and manage the steps along the way. The reason so few executives believe salespeople understand their roles and responsibilities is that no such role as a C-level executive exists. Chief marketing officers face a variety of different issues than their counterparts in manufacturing or finance. Business unit leaders have different goals and objectives than CEOs or other corporate shared service functions. The organizational structure of any given company will dictate how these different groups interact with each other. The larger the enterprise, the more important managing internal interactions is for any given executive. This also has tremendous impact on funding modes where a shared services group, such as an IT function, might be funded by an internal chargeback model — in which other groups are effectively “taxed” for its services — but is also managed by the finance organization as a cost center.

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

· Effective engagement requires more than just training. Regardless of company size,

salespeople need help in managing the complex information available to them in order to be relevant to executives. SMBs offer salespeople less revenue potential than larger accounts, so larger territories and a quicker sales pace are required to meet revenue targets. To support salespeople, you might focus on more packaged stories and just-in-time account primers that allow them to better understand the basics of a given account. Large businesses like Wells Fargo should be viewed as markets within themselves. For sales teams working on accounts of this magnitude, tools and programs to help navigate across a complex organization, resources to more effectively combine products and services in a more Lego-like manner to match that account’s dynamics, and pattern-based customer references or case studies to show more sophisticated examples that will resonate with a given account’s reality are all examples of activities that could help scale the success of these very different selling models.

W H AT I T M E A N S

Four steps sales enablement pros can take to refine their sales strategies With the rush to retool the sales organization, most leaders are focusing on a variety of tactical issues — like conducting more training, introducing new methodologies, examining technologies to help facilitate specific tasks during the sales process, etc. — but few are focusing on the most basic question: Are your salespeople really prepared to have the types of conversations with executives that are required in order to support a value-driven sales model? The data uncovered in our study indicates that sales enablement professionals should re-examine their programs. How much of your content and training is focused on you and your company, and what percentage of the material would you say is about your customers and what they care about? Here are four steps you should follow:

1. Get specific about whom you’re selling to. Do you have agreement among portfolio, marketing, and sales leaders about who is the target executive buyer? It’s quite easy to set a goal to “sell higher” in the organization. It’s far different to actually achieve that goal if there isn’t more general agreement about who the targeted executive is. For example, a CIO’s role is very different than a CFO’s — but both are complex. 2. Define clear objectives for your various training programs. The objective of a VP of sales for one software company was to develop his sales force to be able to cross-sell his products and services at the CIO level. However, the onboarding program designed to ramp up new or struggling reps has a stated design to allow salespeople to present the company’s product vision. Without any substantive training or tools to help salespeople actually understand CIOs’ roles and responsibilities or how they work with subordinates and business peers, most of the sales force is never going to be able to gain and maintain the executive-level access the VP of sales thinks he’s developing in various training investments.3

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

3. Assess the status of the supporting material that sales will use in the field. It’s very hard for most salespeople to put into practice what they learn in training sessions. In fact, most sales training companies contend that the bulk of the skills taught in their courses are lost in the field if they are not used right away or followed up with a reinforcement program. Content and tools available to the sales force that offer a crutch to old productled, transitional-selling motions create a hidden and massive obstacle to driving the desired behavior. Sales enablement professionals should audit content to determine whether it was purposely built to communicate a specific idea to a specific person or as a way to promote a product or service. 4. Understand the comfort zone of the current sales force. When deciding they need a more value-added sales approach, few sales leaders perform an effective analysis of the comfort zones of their existing sales forces. For example, if a salesperson has a history of selling a common product set to a particular buyer level, such as a data center manager, then asking them to sell other products — like network architecture designs to network and enterprise engineers — moves that salesperson out of a buying center in which they are very comfortable to one they might not understand. Asking that same person to sell at the VP of infrastructure and operations or CIO level is an even bigger leap. It’s critically important to know where the sales force is starting from so you can develop the right transition strategy. Supplemental MATERIAL Methodology We conceived Forrester’s Technology Buyer Insight Study based on two major trends: 1) that business and technology buyer roles were blending and 2) that there is a growing difference in perspective between these buyers and the technology vendors that serve them. To get both quantitative and qualitative feedback, we designed and implemented a four-stage research project: design, survey, buyer interviews, and salesperson interviews. Design phase. Between November 2008 and January 2009, Forrester conducted 20 interviews with executives in buyer organizations and asked a series of open-ended questions about their opinions of technology suppliers to determine the right set of questions to ask our audience. From these results and our ongoing conversations with sales and marketing executives within technology vendor organizations, we developed an online survey instrument to collect buyer attitudes about sales engagement across four key milestones: gaining access, having successful meetings, creating a shared vision of success, and creating a business case.4 Survey phase. Forrester fielded its Q1 2009 North American Buyer Expectations Of Sales Interactions Online Survey to 166 senior level-executives who are involved in purchasing technology products or services who work in companies with annual revenues of at least $500 million. Our sample consisted of 55% buyers who worked on the business side (56% C- or VP-level) and 45% (68% C- or VP-level) in an IT role. The panel consists of volunteers who join on the basis of interest and

April 19, 2010

Technology Buyer Insight Study: Are Salespeople Prepared For Executive Conversations? For Technology Sales Enablement Professionals

familiarity buying products and services from technology vendors. For quality assurance, panelists are required to provide contact information and answer basic questions about their firms’ revenue and budgets. All respondents were screened for significant involvement in IT decision-making as well as IT purchasing processes and authorization. e-Rewards fielded this survey online from February to March 2009 on behalf of Forrester and motivated respondents with a small monetary incentive. Panels are not guaranteed to be representative of the population. Unless otherwise noted, statistical data is intended to be used for descriptive and not inferential purposes. Buyer interview phase. After analyzing the data, Forrester conducted 40 confidential interviews with executive-level buyers in finance, HR, marketing, sales, and IT departments to share with them some of the survey findings and elicit qualitative feedback. These interviews were conducted in June and August 2009 and included participants in North America, Europe, and Asia Pacific. The majority of companies interviewed had revenues in excess of $10 billion. Salesperson interview phase. In order to collect insight about the various actions and tactics that salespeople deploy, Forrester interviewed 40 quota-carrying salespeople from a cross section of technology product and services vendors in North America and Europe. Participants were asked open-ended questions about the kinds of investments and level of effectiveness of those investments in helping them gain access, have successful meetings, create a shared vision of success, or develop a business case. We agreed to keep the identity of the individuals and names of the companies strictly confidential. This phase was completed between August and October 2009. Endnotes 1

During February and March 2009, Forrester conducted an online survey of 166 technology decisionmakers in North America about their involvement, experience, and expectations in the process of buying technology products and services. The respondents worked at companies with annual revenues more than $500 million. e-Rewards fielded this survey online on behalf of Forrester and offered incentives to survey respondents.

For more information about strategic account programs, see the October 19, 2009, “A Systematic Approach To Strategic Account Programs Improves Tech Sales Performance” report.

For additional information on executive-level access, see the April 16, 2009, “Gaining Executive-Level Access” report.

For additional information on these four key milestones (gaining access, having successful meetings, creating a shared vision of success, and creating a business case), see the July 17, 2009, “Optimize Performance By Driving Enterprise Sales Outcomes” report.

April 19, 2010

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