Thursday, March 19, 2009

Firing prospects

I met today separately with two successful CEO's who, unprompted told me they were deemphasizing their marketing/sales efforts to Enterprise accounts; one company is in the application arena, and the other is in the infrastructure space.

Each told a similar story:

They don't have the 'patience or resources to go through the hoops' required in committee sales. Translation, is that they don't want to fund the direct salesforce/field engineers for the traditional 6 month sales cycle, where they have to commit the equivalent of hundreds of thousands of dollars upfront before a decision is made. Moreover, if the decision is positive, it's normal to wait a few more quarters for implementation to move forward.

Each stressed the opportunity cost is simply too high when many alternative channels are present that are open to a 'fast test/fast purchase' decision cycle. Today, their biggest issue is prioritizing their time/resources in an environment where they receive near-instant market feedback from traffic, trial and conversion statistics. Direct Enterprise sales (as opposed to Business Development) is being extracted from their company DNA.

Unfortunately, I suspect that the industries that could use innovation the most (e.g. Utilities, Media, Automotive) have been the historic worst resource offenders. It seems that with every breath they take, they fall further behind. It's a shame.

7 comments:

  1. Charlie --

    Interesting post. I've been seeing a similar trend across the board. There is also a hybrid model in which many parts of the sales cycle are offloaded to online means (demos, trials, etc.), but there is still a direct sales force involved. Salesforce.com and many of the open source companies (JBoss, MySQL) have been quite effective with this model.

    Geva

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