Category: Selling to Zebras
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Software Advice Survey to Gauge the 2013
Inside Sales Market
With the tough economy, many companies are
taking a closer look at the inside sales role because they are relatively
cheaper to employ than their outside sales counterparts. According to 2010
research conducted by InsideSales.com, growth of the insides sales roles was
outpacing growth of the outside sales profession by 15 to 1.
While the economy has played a significant
role in this shift, other factors such as the evolution of technologies that
enable remote selling (e.g. Cloud-based CRM software) are contributing to this
changeover as well. But a lot can change in three years.
To gauge the 2013 inside sales market,
Software Advice–a website that reviews sales-related technologies–is teaming up with
InsideSales.com to distribute a survey to sales professionals. The survey seeks
to discover the size of the inside sales market, average compensation rates and
performance across key sales metrics. To participate in the survey, and enter
into a drawing to win an iPad, start the survey below.
Brent Nauer/Keenan Wojnicz
Customer Relationship Management (CRM) is well into a new phase. The new focus on social and mobile has really transformed CRM offerings into ROI machines. You’d have to take a quick trip down memory lane to understand this didn’t happen on its own volition. CRM was forced to make these changes because of its notorious history of let downs, complexity and broken promises. A 2003 Gartner survey shows enterprises failed to deploy 41.9 percent of the customer relationship management (CRM) licenses they bought (almost $1 billon worth).
CRM of course was here to stay, but the mistakes and skepticism that followed was also an education for refining some much needed improvements in how companies bought and vendors sold. The rise of Software as a Service(SaaS) was popularized most notably by Salesforce.com with their “No Software” campaign. The idea of software delivered over the web has set the stage to unseat the less nimble giants of the CRM industry and the legacy systems in place around the world. This IDC report released on June 14th shows the top three CRM vendors are separated by no more than 1.5% marketshare. Despite what appears to be a very saturated CRM application market, there has been a year over year growth rate of 11.2% for the industry as a whole according to IDC.
The increased competition in the CRM space has actually led to more tailored options for buyers, instead of a one size-fits all approach that has historically proved ineffective. A secondary market of sales force automation has also spun off, fueled by those individual corporate demands.
Three influences on reorganization of CRM efforts
Three categories where companies are focusing their CRM efforts
- Sales automation
- Marketing automation
- Customer service
*In contrast, contact center applications is an area experiencing little to no growth.
Software as a Service
Software as a Service has really opened the market for developers looking to revamp shortcomings in existing CRM implementations. Larger companies have found it difficult and costly to switch CRM providers, yet they have fueled the growth of this secondary market.
Companies are also demonstrating the need for mobile tools after the first generation of the ipad left early adopters with expensive toys.
Mobile sales professionals can see potential in the devices, but are demanding more from them. Custom development is also allowing input from every level of the organization to make sure the tools not only manage, but also increase productivity outside of the office.
“When mobile professionals have access to all the relevant information, they can go much deeper into the sales process in a single visit. They can respond to customer inquiries—such as order status and recent service history—on the spot, increasing the quality of the interaction and improving sales productivity.”
- Ehab Samy (Mobile Marketer)
Mobile CRM has potential for substantial ROI growth. By arming customer facing professionals with more information and a better user experience, they are able to bring synergies to otherwise isolated support and sales groups.
Social CRM is a way to engage and collaborate with customers as opposed to an onslaught of marketing material. The goal of social CRM is to turn customers into brand advocates. You would think disgruntled customers would be more prone to leaving a review. This American Express study proves otherwise:
Eventually you must decide where to invest your resources. According to Gartner, Mobile CRM provides a better ROI than Social. The difference can be contributed to an immediate impact on cost savings and sales conversions.
“While not all companies deploy sales mobility, those that do, outperform those that do not across a myriad of measures, including overall team attainment of quota, lower sales turnover, as well as better year-over-year growth around revenue, customer renewals, deal size and CRM adoption”
-Aberdeen Group Benchmark Report
Social should still be part of a comprehensive initiative, but the soft benefits may be harder to justify in the short term. The social crm top-line benefits take time to develop and include more externalities out of your control. You are giving your customers more leverage in everything going forward and joining this social experiment. In evaluating the ROI of CRM solutions, be sure you can agree with all the terms leading into the calculation. If you don’t agree with the percent adoption of a CRM solution, you can’t accurately predict the ROI. The ROI promised on a lot of CRM solutions assumes everyone in the organization will adopt it. Any reliable company will give you the opportunity to partner and verify value calculations specific to your application. If you follow through this simple step, your CRM software won’t be sitting on the billion dollar shelf. Besides, CRM is more than software, it’s a mindset, and it will fail without the right guidance.
Companies that are not using mobile technology to manage customer relationships may find that they are losing ground to competitors that are.
I simply can’t help myself when I see names like Instagram, Friendfeed, OMGPOP in the headlines. I blow through those articles like a set of self-help tapes wondering why I can’t devise one of these seemingly simple schemes. Its just those simple ideas that everyone thinks they could have come up with. When you hear these names they are probably being criticized, or adored because of their recent acquisitions. The surprising price tag in relation to their sales is the topic of discussion. Upon further investigation, it appears all part of a guided strategy. Think about it in terms of a “what does God look like?” strategy. If everyone has their own interpretation, who’s to argue with your perspective? If a company has no sales you can draw any kind of conclusion/valuation you would like. Of course social is leading this pump and dump madness. The Facebook (Nasdaq:FB) purchase of Instagram proves too much money has moved into too small of a space. With absolutely no recorded revenue Instagram was acquired by Facebook for around $1 Billion. This translates into $28/user for Instagrams 35 million users. Is the new advertising currency Cost per User? While the cost per user is on par with other large tech acquisitions, Instagram only has 13 employees. Making it one of the most expensive Cost per Employee Transactions.
We’ve been here before. Anybody remember Mark Cuban, the Pittsburg native? I think it was somewhere around 1999 he sold broadcast.com to Yahoo! for $5.9 billion in Yahoo! Stock. This was a company with less than $100 million in annual revenue that had never turned a profit. Today Yahoo only has a market cap of $19.06B and well broadcast.com redirects you to yahoo.com. The cost per user argument to justify a large purchase is only relevant to a point. At some point there has to be a conversion of those users to profitability to justify any long term sustainability.
First to market seemed so relevant back then, but has apple or Starbucks taught us anything? You don’t have to be first, you just have to do it right. The Ipod wasnt the first mp3 player. By right, I mean the company should demonstrate sustainability as its own business. Remember back when we were all dreaming about what the internet was going to be. We know a little bit more now, but are we making the same mistakes? We know how fragile success can be. First to market is still relevant, but it shouldn’t be blown out of proportion.
Acquisitions With A Strong Focus On Sales
There are some acquisitions that involve the other end of the spectrum; companies with a focus and history of growing sales. How do I know? They are all previous/current Selling To Zebras customers. We have witnessed some pretty incredible sales force transformations. This year has been especially interesting for the following companies:
One of those companies is from Mark Cuban’s old neighborhood. Pittsburg based Vivisimo is a leader in big-data analytics and previously a privately held enterprise search software company. On April 25th IBM announced a definitive deal to acquire Vivisimo for an undisclosed amount. Vivisimo allows enterprise users to find information regardless of source, location or type. If you’re unfamiliar with the concepts, it’s a search engine inside of a company. This allows, as one example, customer facing professionals quick and accurate access to documents and data that is usually hard to find. This access brings additional value to existing information. An IDC study says the market for big data technology and services will grow from $3.2 billion in 2010 to $16.9 billion in 2015. IBM is strategically positioned to capitalize on this growth with the acquisition of Vivisimo in relation to its current offerings. This seems smart considering your average daily business activity creates 2.5 quintillion bytes of data according to IBM. This includes data produced by social media among others. Therefore, without having to predict the winner of a social media race, you can safely bet that no matter who wins, data will continue to be produced. In a world where information is king, IBM has made a very strategic move. Along with great technology Vivisimo has built a portfolio of stellar customers including; Airbus, U.S. Air Force, Bupa, Cisco, Eli Lilly, Social Security Administration, Defense Intelligence Agency, U.S. Navy, Procter & Gamble, and LexisNexis. There is also a great new set of qualified prospects for additional IBM solutions.
Taleo is yet another Selling to Zebras customer acquired in 2012. On February 9, 2012 Oracle (Nasdaq:ORCL) announced an agreement to acquire Taleo for $1.9 billion, (or as I like to say two Instagrams). Previously, Larry Ellison of Oracle had asserted his opposition to SaaS(Software as a Service), but the move was a direct response to SAP’s (Nasdaq:SAP) purchase of SuccessFactors for $3.4 billion. Taleo is a leading cloud-based talent management provider. 15% of all US hires flow through Taleo and about half of the top 30 career sites in the world are powered by Taleo. Taleo has 5,000 customers(half of the fortune 100 included) and 1400 employees. Taleo lost $14.5 million last year on revenue of $309 million. I’m not so sure yet why Yahoo! passed on this kind of a deal. Taleo was purchased for a hefty premium of 6 times last year’s revenue, while SAP paid 11 times revenue for SuccessFactors.
Another cloud play was the acquisition of StarCITE by Active Network (NYSE:ACTV) on January 5, 2012. StarCITE is a leader in global corporate strategic meetings management and Selling to Zebras customer. StarCITE’s technology platform brings transparency to the costs of event planning, booking and management and will complement Active Network’s Business Solutions division. StarCITE’s products are used to handle functions such as scheduling, procurement, event registration, and hotel
and airline reservations. The company’s offerings are used by corporations, suppliers (including hotels and airlines), and other hospitality providers such as travel bureaus, convention centers, and travel firms. StarCITE also offers services for creating event-specific Web sites and e-mail campaigns. StarCITE’s global customer base and SaaS technology introduces Active Network to the strategic meeting management market. StarCITE was able to develop their market by identifying and quantifying pain in the marketplace. Their ability to offer differentiation through value, helped them grow revenue by more than 600% in less than three years. Read More
Are you playing the Mega Millions tonight for your chance at a cool $640 million? This is apparently a jackpot for the record books. It’s ironic that the same reason why this jackpot has grown so large is because the overwhelming odds are stacked against the players? In the last year of record for lottery ticket sales in the United States (2006), state lotteries posted more than $53 billion in annual ticket sales.
The Jackpot odds are 1 in 176 million for tonight’s drawing; so if you have $176 million dollars you could buy every combination of numbers and walk away with your lump sum of $347 million at a profit. So why wouldn’t you do this? Well then my friends you run the risk of another person winning as well, and there goes all your money. Besides, try buying 176 million of anything; How many gas stations would you need to visit, where would you keep all the tickets secure, and what are the odds you would be able to find that winning ticket in your haystack? Please don’t play the lottery without first admitting that you enjoy paying taxes. This is why the lottery is called an idiot tax. You voluntarily pay a tax that goes to fund state and local governments for an insignificant chance at winning some unfathomable amount of money. I assume everyone knows this and yet people still buy the tickets and this is where the discussion begins.
It got me thinking about our services and what we sell and it should make you do the same. The odds that we can help companies sell more are great, and we market that. Still, not everyone will buy our service despite the overwhelming odds that it will help their organization. It might be a stretch to compare the lottery to a complex B2B transaction, but the lottery shows us something interesting. What are the people who are buying tickets actually thinking when they overlook the odds?
Small Price to Pay
Well the first response I am likely to get is “It’s only $1 to play, why are you calling me an idiot?” The buyer sees little risk in relation to their income at this amount and probably feels closer to winning than they probably should. Sure relatively speaking a dollar is a quarter of a gallon of gas. Most of us wouldn’t know a dollar was gone, yet most of us wouldn’t light a dollar bill on fire either. That’s why the ticket is only a dollar, plenty of research saying that’s the tipping point.
Go big or go home
Greed exists everywhere. If someone didn’t play the lottery when it was a million dollars, it doesn’t make sense that the same person would play now. A million dollars isn’t enough for you? I don’t know if I can call it greed, if it’s simply a tax donation. So let’s call them greedy lottery philanthropists. Everyone wants to be a part of something big; whether they are sitting in front of a TV cheering on a sports team thousands of miles away, or winning the biggest lottery of all time. This is the cinematic effect where you are part of the greatest story ever told.
What would you do if you won?
This might be the most fun part of the buying experience. What is your world going to look like when you win? Everybody has spent that money already, in their mind. What do people want to buy? They want to buy more stories. They will by a five-story house, a storied baseball franchise, a historic work of art, Selling To Zebras…The Untold Story. The more stories the better!
Wow what if you could sell like the lottery ticket? All the promise, hope and fortune for such a small price. Keep in mind when you’re selling that we all want the story. We don’t want your story we want to believe our story is going somewhere better.
No, I’m not playing the lottery; my story is going somewhere else as I write it. The only way to guarantee a win with the lottery is to purchase a house and experience the great lottery tax credit. With this record pot, next year is shaping up to be the biggest lottery credit ever. Looking forward to it!