Secrets to sales success

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This article appeared in the April 2010 issue of CRN magazine.

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Secrets to sales success

For a company that has seen sales hit $100 million within the past 10 years, it is remarkable to learn that Thomas Duryea Consulting didn't employ a single sales man for its first five years.

Its founders, four computer science graduates, set up a pure consulting business that poured their engineering skills into desktop automation projects for the enterprise.

The decision to put engineering at the centre of the company's operations, and the success of strong referrals and constant networking, produced its own sales momentum, says co-founder and CEO Andrew Thomas.

When Thomas Duryea hired a sales force in 2005, the effects were dramatic.

"The final step for us was building out the sales front. We then drove the business from $3 million to $30 million in the space of two years," Thomas says.

Today Thomas Duryea is valued by its customers and vendors for its ability to assemble projects that match deep feature sets to complex business challenges. Vendor systems engineers are a common sight in the Richmond, Victoria offices testing combinations with the integrator's own engineers.

And the customers keep coming back. Last June the federal tax stimulus spurred the company to post its biggest month, comprising more than 20 percent of the financial year's revenue.

It's a story that must be a warm tonic to any reseller who has gone into business for the love of IT. Many resellers are born geeks not salesmen, but often the need to sell overcomes a reseller's passion for building technology solutions.

So what are the lessons for today's four-man bands of professionals looking to emulate the industry's leaders? How do you sell IT without a sales team?

Start with the engineering
Starting off as a pure-play consultancy had its advantages. The fact that fulfilment was handled by another supplier meant the fledgling business was free to recommend without the need to navigate alliances with vendors.

Another bonus was that the four engineers focused on desktop automation, an area at the time clouded by smoke and mirrors, says Thomas. Their computer science backgrounds meant they could deliver true automation and not just sell it.

The third strategy was starting high and aiming higher. The list of its foundation clients makes for a remarkable read; Kodak, Cadbury-Schweppes, larger councils and government. The consultancy refreshed Cadbury-Schweppes' Wintel environment across 13 countries with a full review of the standard operating environment.

Their choice of technology defined the market as desktop automation was an approach only achievable by enterprise. The early focus on a technology segment and market meant the integrator could employ its dozen staff on high calibre, separate engagements. (Now it has up to 100 projects running at a time.)

Thomas made it a goal to push up the calibre of the client and solution. This aided his word-of-mouth marketing strategy.

"Very early on I worked very hard on building a relationship base and through that, networking and actively seeking referral," says Thomas. "It was essentially growth by referral and relationships."

The business is still driven by relationships, with vendors, clients and staff. Nothing is more important, he says. The second core value is technical excellence.

These two values reinforced each other to define its modus operandi. When VMware emerged as a pioneer in virtualisation, Thomas Duryea was quick to recognise the potential but cautious in taking it to market.

"Instead of bringing on 10 sales guys, marketing the hell out of it and then trying to deliver it, we began in very niche areas delivering very solid solutions in partnership with VMware and EMC and then NetApp," says Thomas. "That was what helped the vendors and clients trust us more."

It then developed a strong sales force. Its role was to build relationships and communicate the integrator's success stories. Vendors were happy to lend support because they knew the integrator would not sell or promise more than their products could deliver.

"The vendors trusted that if we were involved we would get to an engineering solution," says Thomas.
When Thomas Duryea hires a salesman he sits down with solutions architects for a deep dive into each of the technology sets that drive company strategy and solution design. The salesman is then supported by those practices during the sales cycle and makes visits to customers as part of a team. He draws on his colleagues' knowledge to win the respect of his client as a trusted adviser.

"Our sales guys are out there to build relationships and our architects are out there to deliver solutions," says Thomas.

"You don't see a sales guy going out and trying to sell tin or move product. We expect [sales staff] to understand the value proposition, no bones about it, and we want them to drive a technical sale, but he's always backed up by architects and consultants."

The reputation for delivering technical solutions attracts experienced salesmen who are protective of their client relationships and look to the security of a company that will regularly deliver, Thomas says.

"They are coming to us because we can deliver on their promises. It's incredibly important for these guys who have worked for years to build these relationships. Once he's burned that relationship essentially that's it for him with that customer. They come on board because they can stand behind the solution they are selling."

 

Computer Merchants is IBM's highest-selling business partner in Australia and New Zealand when it comes to the vendor's system X range. It moves hundreds of bigger products such as System I, the midrange computer system used by banks.

The reseller's first quarter revenue was up 72 percent on last year and 27 percent ahead of its targets. "To me that's how we want to grow our business, so that's normal," says sales director Mark Loparow.

Although the business model is quite different to Thomas Duryea, Computer Merchants still depends on its sales people achieving trusted adviser status with customers.

"We have a unique way of training people," Loparow says. "It's very intense and in-depth and quite long. They're account reps, the financial controller, the cleaner, the CIO, the CTO, the CEO of their territories. They need to know everything and they need to be across it all. And they become part of the family of their customers."

The typical sales rep takes about two years to become a fully fledged member of the sales team.

Computer Merchants makes trust an explicit aim by telling customers that they only need to pay if they are happy with the product. No money is asked for up front.

Sales reps only earn their commissions if their customers have paid, which makes the process self-regulating. "Our business is based on repeat business. The sales reps don't get paid unless the customer is happy with their result," Loparow says. "Typically if a customer has traded with us once they will trade with us again."

Happy customers mean happy sales people. The average length of employment for a Computer Merchants sales rep is eight years.

The reseller has 18 sales reps who are on the phones every day with customers and distributors. They discuss trends at weekly sales meetings based on the quotes they are making with their customers and match them to conversations with distributors. Loparow says he also talks to the distributors at least once a week.

"Coupled with 18 other people doing exactly the same thing you do get a very good feel for what's happening in the marketplace.

"We make it our life to know."

The information is distilled into a bundling strategy. The reseller works with its distribution channel to make specials geared to items in demand.

Loparow says vendor promotions are useful to get end-of-financial-year deals over the line, but the reseller is very careful about how it puts together its bundles.

"We've found it important to spec this equipment without any gotcha's.

"Instead of promoting an IBM Blade Server without any disk or memory our preference is to quote a complete working configuration for the customer to use," Loparow says.

Loparow says some competitors will sell products that their customers may never use or are incomplete systems. He says a customer called him for an X series server and when they were talking prices the customer told him he could get the same product for much less.

"They shared with me the ballpark price and it was a vast, vast difference. But when we looked into it they were getting a skeleton of the product rather than something that is 100 percent working. You need to read the fine print all the time. If you're expecting to get a server, you need a server that works," says Loparow.

"A competitively priced item is very, very important, but equally important is a configuration that does work. Because what's the point in buying something that's inexpensively priced but doesn't really do the job because it doesn't have key features in it?"

Make the client work for you
This the wrong way to go about a sale: pin down the IT manager, get him to carve up his budget like a pizza and then ask him for a piece, says Terry Smyth, an expert salesman in Genesys call centre software at Dimension Data.

The key to a sale is understanding what the business is trying to do and building a business case which is supported by the technology, rather than selling the features of the technology itself, he says.

"If you can understand what the business challenges and needs are, it makes it a whole different approach. So it's the business coming back to ask [management] for the funds rather than you as an external party. It has a whole different mood around it and degree of urgency," Smyth says.

But how do you reach that point of familiarity with a customer and their business?

"I try and work with people on the same level. Say working with a vendor, it's not like we are subservient to them or they to us, we work with them as peers. And the same with customers as well - three parties trying to achieve the same thing," Smyth says.

Other integrators don't always work in the same way, he says. When the vendor or provider is placed on a pedestal it makes it hard to get the sales strategies right.

"There's always a question mark around whether they fully trust the other party. Ideally you have a really open relationship between the three parties, and even the customer knows what the role is that they play. And when you can get that working, everyone wins."

In the telco and finance market in which Smyth operates, it's difficult to retain the position of trusted adviser when competitors are constantly looking for an opening. Smyth says one tactic is for the sales person to stay involved in the delivery of a project. While this is time that would otherwise be spent developing leads for other sales, it is crucial to maintaining relationships with key customers.

"As boring as it sounds, the process is very much overlapping," Smyth says, because enterprise customers engage the integrator in several projects.

"If you have incumbency it's important to be across that and not just looking for the new things, [but] working on the operational side as well."

The extra groundwork brings its own rewards such as a positive set of messages if the project is going well. Similarly if there is a problem with delivery and the sales person is not across it he or she can really come unstuck, says Smyth.

"If you have a competitor that's in there talking about that problem they can use it as a tactical way to get into the business. But if you are across it and you can talk about what you're doing to address it then you can turn it into a positive," says Smyth.

"Most customers realise that you're always going to have problems. The difference between a good supplier and a bad supplier is how they deal with problems."

Happy customers generally don't want to spend the effort looking for alternative quotes. But if they are unsatisifed they will look elsewhere.

"If you address the problem and work with the customer and do all that stuff where there's no sale involved, and it's painful at the time, you can really improve your position and relationship with the customer," says Smyth.

If you wound back the clock a year to when the global financial crisis was undermining business confidence across the globe, sales people faced bleak prospects in hitting their targets.

IT consultancy Nexus decided that instead of flogging its sales team harder the company would sow the seeds for better times when companies felt like spending again.

CEO John Dobbin remembers the moment. "During the fearful stage of the GFC, when every CFO suddenly morphed into Mr Incredible's mate Frozone, and turned all IT budgets to ice, we turned up our marketing efforts in order to expand our client base," he says.

Nexus ran seminars on how to achieve more with less budget: virtualisation, storage consolidation, managed services. It built relationships and deepened existing ones.

The strategy paid off, Dobbin says.

"Now, not only are budgets thawing out, but there is plenty of pent-up demand," he says.

"Not surprisingly, our pipeline has rarely looked healthier. Last month we employed two more engineers to cope with the extra workload. As for activity, the sales organisation is flat out doing final quotes as IT managers and CIOs see what they can squeeze out of their remaining budget."

Nexus is getting a lot of minor upgrades - a rack of disks, desktop refreshes, a firewall or two - but the meaty part of the pipeline are major projects that CIOs want ordered in this financial year. These include data centre refreshes, digital asset management deployments, new publishing systems.

Marketing is focused on building momentum for next financial year, given the minimum lead time for a decent sale is three months, Dobbin says.

Nexus' sales cycle is affected by the control the integrator has over its customer's IT spend. Where a customer engages Nexus for a full managed service, with budgets set out in advance and periodically signed off by the CEO or CIO, the integrator controls technology decisions and spending, to develop its position as the customer's trusted adviser.

However, Nexus has many corporate clients that have conflicting agendas and competing suppliers. These constraints - and the fact that it can take six to 12 months for the customer to write a cheque - mean that although the sales pipeline is healthy the orders come in lumps.

Accordingly, Nexus targets larger-sized jobs such as a data centre refresh or a national roll-out where it can control delivery and manage it without the customer becoming too stressed.

Dobbin nominates next-generation virtualisation projects as a major sales driver. "Last year some clients may have virtualised part of their infrastructure but now they are looking at near-total virtualisation - putting in a private cloud, if you like.

 

How to manage temptation
Vendor and distributor incentive programs can have a marked effect on your reps' behaviour. Just make sure it's to your benefit

Vendor sales incentives work, but sometimes they work too well. "If there's a program on that you can get a Rolex watch for a quarter then you're certainly going to pay attention and knock on doors. It's a motivational thing," says Dimension Data's Terry Smyth.

However, picking a rebate-pushing vendor for a storage array might sit at odds with the solution architect's recommended provider.

Thomas Duryea CEO Andrew Thomas has final approval of all "front-end" rebates that directly reward sales people. The integrator's specialisations drive strategy and determine how solutions are put together, and Thomas allows the rebates where they align with these designs.

Sometimes that means a rebate will only be considered if a competitor has one in place, too.

"Both storage vendors [EMC and NetApp] are offering very effective front-end rebates and they definitely drive mindshare for my reps. I would not allow NetApp to put in place a rebate structure with my reps that isn't met with something similar from EMC because it will drive uneven behaviour."

Ultimately the size of the rebates is small compared to what the integrator's staff earn, so their impact is relatively modest, Thomas says.

"While it is a teaser and it does interest them most of my guys are driving BMWs already and the amount of money the reps give them doesn't make much difference."

Smyth agrees that rebates come second at Dimension Data. Deciding which vendor to use is determined by the customer business case than a particular offer on the day, Smyth says.

An EoFY checklist 

Bruce Rasmussen, director of Carpe Diem Consulting, recommends resellers wanting to capitalise on end-of-financial-year budgets do the following.

1. Properly document the pipeline. This includes not just the list of products, but what the customer is trying to achieve, and what their key timelines are.
2. Analyse the pipeline. Analysis will tell you which additional elements could be offered to a solution. This might include an upsell made possible due to available customer budget or special deals from vendors.
3. Analyse customers' IT roadmaps. Deals that aren't scheduled to close until the new financial year could be brought forward, again either to use up available budget or to special offers from vendors.
4. Enlist the assistance of a distributor. A distributor has relationships with key vendors and can identify relevant special offers at the vendors' end of financial year or end of quarter.

Avoid EoFY madness
Make your vendor and distributor's financial year calendars work for you

Conventional sales wisdom holds that the end of every financial year must be a good time to sell because so many vendors (IT and otherwise) start dropping prices and driving deals.

Top selling resellers and sales consultants, such as Organised Solutions' John Butel, disagree.

EoFY selling "trains the customer what to expect, resulting in poor buyer behaviour," he says. Butel compares the end of financial year rush to abandoned experiments for set days for cheap petrol. Now instead of "Cheapie Tuesday" people don't really know when petrol is going to be cheap.

He advises sales people to be more strategic about closing end-of-financial-year sales. Desperately selling discounts for deals that close before June 30 sends the wrong message; that the reseller is interested in sales dollars whether the solution is positive to the client's business or otherwise.

One exception is government agencies, which must exhaust their IT budgets or lose them the following year. Dimension Data's Terry Smyth says colleagues selling to government accounts "have a bit of a turkey fest" in June.

"They do get the phone call on the last day of the month, saying, "Hey what can we buy? You know all that stuff you quoted months ago, can you get that quote out and deliver it tomorrow?'"

But he says the EoFY frenzy is not something for which the integrator plans. "It's all tactical and you're going to service that as best you can. I don't think there's any strategy. It's just a phenomenon of the inefficiency in that customer area."

Andrew Thomas says Thomas Duryea deliberately tries to avoid letting its customers get to June 30 with a bucket of money that must be spent on desktop upgrades and the like.

Instead the integrator plans the year with customers and books in major projects to take advantage of vendors wanting to meet sales targets.

"The vendors have trained everyone in the market to expect discounts at end of quarter and end of year. We know when [the IT projects] are happening and we will leverage vendor end of quarters. We say to a customer you need to do this [security project] and the best time to purchase from Symantec is at this point, this point, and this point through the year because they will be very, very keen to win your business."

Giving priority to the customer's calendar is not just a way to buy goodwill and cheaper prices for customers. Vendors can end up driving behaviour in a reseller if the reseller doesn't set their own calendar and align it with vendors, says Thomas.

Aligning calendars, however, can be tricky. US vendors can end their financial year in March or December. Smyth has customers whose financial years end in March, June, September and December.

Computer Merchants wrote a tool for its in-house customer relationship management system that runs calendar year reports to measure how the company is performing against its main vendor, IBM, says sales director Mark Loparow.

The reports help avoid confusion. If the vendor nominated a target of $10 million for the US financial year, the reseller might think it had already booked $6 million in the first six months of the Australian financial calendar.

"Open communication is one of the keys to the success of our business. Being able to communicate openly means you need to be accurate," Loparow says.

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