Jun 5, 2007
Channel Tips:
Selling Applications or Infrastructure?
How They Are Different and Why You Should Care
By Greg Nutter
According to a recent study by CSO Insights on Sales Performance Optimization, increasing sales effectiveness is one of today’s top executive priorities, second only to increasing overall revenues. Sales effectiveness is all about working smarter rather than just harder which means it’s far more strategic and sustainable than simply asking reps to make more calls. Unfortunately, many high-tech marketing and sales organizations don’t differentiate between an application or infrastructure marketing or selling approach which can have a major impact on sales effectiveness. Interested in selling smarter?
Infrastructure Selling
Infrastructure, which can be hardware, software, or services, is foundational technology that does not directly support a corporate business process. Common examples include storage, servers, backup software, or perhaps remote network monitoring services. These systems are sold primarily to the IT department with the intent of reducing costs, improving performance, reducing downtime and minimizing risk. In evaluating a potential purchase, IT decision makers focus primarily on the quantitative aspects or “specs” of a product – i.e. the elements that you can actually measure. Specs can include reliability (MTBF or Mean Time Between Failure), performance, capacity, warranty period, and of course cost (initial & ongoing). While there are undoubtedly qualitative elements (perceived risk, ease of use, etc.) which play a role in the evaluation process, in most instances the decision will be heavily weighted towards a “specs versus price” comparison.
Application Selling
Applications are primarily software or service offerings (although hardware can play an important role) and are used to automate or improve corporate business processes. Examples can include accounting, manufacturing, (ERP or SCM), customer support (CRM), sales process support (SFA), claims processing (ECM), etc. Application selling differs from infrastructure selling in two key areas:
1) There are many more decision influencers outside of IT, although IT will almost always have some level of involvement
2) The decision criteria are more heavily weighted towards qualitative rather than quantitative elements.
The qualitative elements decision makers look for include factors such as whether the new system will improve productivity, reduce errors, produce higher quality work, lower risk, improve customer satisfaction, or improve overall process management. Also, when comparing various solution offerings, differentiation is less on “What” the system does (“specs”) but “How” it does it (how easy, how intuitive, how quickly, etc.)
The difference between these two selling approaches is more tactical than strategic. As such, one isn’t more “solution” oriented than the other nor does it mean that you shouldn’t use strategic selling concepts in both cases to make sure you get to all the buying influences.
Why You Should Care
The most common situation I come across is organizations trying to sell applications with an infrastructure sales/marketing approach, which causes business or end-user influencers to tune out. Business people don’t care about specs (technical or otherwise), but want to know how the system will impact their day-to-day business activities. If you lose this audience, in most cases, you lose the deal. So to increase your odds of success you must focus on understanding business processes and personal pains in order to present your application in a qualitative manner. Specs might be important, but save them for the right crowd.
Selling infrastructure using an applications approach can lead to problems too. IT, which is the key decision making group for infrastructure, will often interpret a highly qualitative approach to be less credible versus one that is heavily spec oriented. In fact, you can come across as too “salesy” by not discussing key quantitative elements in depth and demonstrating how they provide benefit to the customer. Detail is very important in this kind of selling and differentiation between competitive offerings is primarily done on the basis of specs and the perceived value they provide.
The bottom line is that if your sales or marketing approach is a poor match for your product, you selling organization will have to work much harder to get the same results. How do you know – look at your website, your collaterals, and your sales calls and ask yourself two questions:
1) What audience am I targeting – IT or business users?
2) Is my message product/spec or business process oriented?
Recently I began working with a client who had traditionally sold infrastructure solutions but began marketing a new line of application products which weren’t getting much market traction. Fortunately they recognized the fact that their marketing and sales approach was heavily product/spec oriented and began an initiative to retool their marketing messages and train their sales reps in a more business oriented approach. While they’ll still push for that one extra sales call per day, they know they’ll be getting much more impact using the right approach.
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Greg Nutter is a Principal with Soloquent Inc. (www.soloquent.com) where he helps technology companies develop go-to-market strategies, programs, and tools that increase indirect and direct selling performance. He has over 20 years experience in sales, sales management, and channel development in the HVTO industry.
Got a comment, got a question, got a problem? Send Greg a note at greg@soloquent.com
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