One of the biggest barriers to innovation in the traditional technology
providers' sales model is lack of flexibility to reinvent themselves
without placing quarterly revenues at risk, according to Gartner, Inc.
"As technology has continued its unprecedented advance in recent years,
the sales models used by providers to bring technology products to
market have failed to keep up," said Tiffani Bova, vice president and
distinguished analyst at Gartner. "The greatest innovation challenge for
providers today may be in finding the means to reinvent the sales
organization and go-to-market model to meet new market demands, while at
the same time continuing to protect and defend existing customers and
deliver net new revenue."
One of the most consistent patterns in business is the failure of
leading companies to stay on top of their industries when technologies
or markets change. However, technology advancements are challenging the
status quo in many ways. Because of this, the market will split into
three types of provider that approach the market in very different ways
— some clinging on to old models of selling to protect their installed
bases, some evolving their products to compete better and some taking a
revolutionary approach with radical new products and business models.
While there are numerous technology-related forces at work on sales
models, the customer is also having a major impact on how providers take
their products to market. Newly empowered and informed buyers are taking
control of the sales cycle, which should be cause for concern for
many sales leaders. Providers have long been accustomed to
defining not only what customers will buy (the product), but also how
they will buy it (the sales model). Where once their focus was pushing
product to a large, loosely defined customer segment, now it needs to be
redirected to connecting customers to their desired offering through
their desired purchase experience.
"The existing ways of selling, based on specific segments, high-touch,
often face-to-face sales, with a select few channels and heavy
investments in lead generation marketing, are beginning to be less
effective as people's buying behavior changes, and the expectations of
IT shift," said Ms. Bova. "The key to moving forward is to take a
customer-centered approach and adopt sales models that support
customers' new buying processes, rather than fight against them."
As the market changes, to compete successfully, providers will have to
base their growth initiatives around three key areas:
-
The products and services they offer (and what need they fulfill)
-
Their target customers (beyond standard segmentations)
-
The sales models they deploy to sell to customers (a combination of
direct and indirect activities)
Focusing too much on any one of these without considering the other two
in the equation will reduce the overall impact of their go-to-market
approach and sales performance.
It is relatively rare that providers consider all three elements when
attempting to differentiate and compete in the market. By connecting
them into a deliberate strategy, every crucial decision can be shaped by
all three working together, and scenarios can be built to anticipate
market changes and their subsequent impact.
"A connected sales model can't be created overnight, nor will it be a
one-off task," said Ms. Bova. "Making such, sometimes significant
changes takes time and will continue to evolve with each new product
introduction and new market considered. But, increasingly, providers
that fail to make changes now could find themselves in a worse situation
in two to three years, when technology and its buyers have advanced even
further."
Additional information is available in the Gartner Special Report "The
Future of IT Sales" This special report provides tools and best
practices for making go-to-market choices a source of differentiation
and competitive advantage, instead of an afterthought. The special
report can be viewed at http://www.gartner.com/futureofitsales
and includes links to reports and video commentary that examine the
future of IT sales and factors driving this evolution.
Ms. Bova will provide additional analysis during the Gartner webinar
"The Future of IT Sales" on August 13 at 11 a.m. EDT. To register for
this complimentary webinar, please visit http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&ref=webinar-rss&resId=2546721&srcId=1-2994690285.
About Gartner
Gartner, Inc. (NYSE: IT) is the world’s leading information technology
research and advisory company. Gartner delivers the technology-related
insight necessary for its clients to make the right decisions, every
day. From CIOs and senior IT leaders in corporations and government
agencies, to business leaders in high-tech and telecom enterprises and
professional services firms, to technology investors, Gartner is a
valuable partner in more than 13,000 distinct organizations. Through the
resources of Gartner Research, Gartner Executive Programs, Gartner
Consulting and Gartner Events, Gartner works with every client to
research, analyze and interpret the business of IT within the context of
their individual role. Founded in 1979, Gartner is headquartered in
Stamford, Connecticut, USA, and has 5,500 associates, including 1,402
research analysts and consultants, and clients in 85 countries. For more
information, visit www.gartner.com.
Copyright Business Wire 2013