By focusing on the end user, innovative companies are turning the traditional enterprise sales and marketing process on its head - and finding great success at it. User driven sales and marketing + Web 2.0 = Enterprise Marketing 2.0?
In my last column, I argued that a few customers - and some software companies - are moving away from a push to a pull - end user driven – sales process. An approach I called Enterprise Sales 2.0. I recently met up with a colleague whose background is in enterprise marketing and the discussion turned quickly to the following topic: what is the role of marketing in the new brave world of Enterprise Sales 2.0?
Traditionally, enterprise software distribution has largely been led by the sales department – The sales folks played golf with the CXOs of target companies – while marketing focused on ancillary (and often intangible) activities such as branding, trade shows and advertising etc…. Enterprise Sales 2.0 turns this paradigm on its head with marketing taking the lead role in Software Distribution and sales playing an important – but supporting – role.
An extreme example of an Enterprise Sales 2.0 company is SugarCRM. The CEO of the company – John Roberts – often proclaimed that “software is bought not sold” and that his company, in its early days, was a salesperson free environment. This has changed and SugarCRM is now hiring salespeople – but their role is significantly reduced: in enterprise sales 2.0, the sales process starts when the customer initiates an interaction with the corporate website and not the salesperson.
This is in fact a very positive development – as I discussed in this article – the cost of Sales and Marketing in traditional enterprise software companies is high and can only be supported by high license revenues – One way to reduce this cost is to establish a find/try/buy process where customers largely buy on their own – No expensive golf games required.
The good news is that marketing in the age of enterprise Sales 2.0 is not the marketing of yesteryear – The old adage that plagued marketing budgets “half of my marketing dollars is wasted, but I can not tell which half” no longer applies. Marketing should continue to focus on various marketing campaigns to create pull for the product, but a company’s website has become the glue that brings together a company’s various marketing activities and with some instrumentation and web analytics, the marketing department can figure out exactly what is and what is not working.
Increasingly Marketing is no longer an art but also a science. Metrics like cost per lead, conversion rates, customer life time value, and churn drive the actions and management of these new marketing organizations. As an example, it is rumored that Amazon has 700 mathematicians analyzing web site data to improve their web site conversion rates – That is a lot of left brains working in what is traditionally a right brain department. Yes I do realize Amazon is not an enterprise sales company – but as I argued before, the consumer and the enterprise markets are merging….
What is the role of the sales department then in this marketing lead process? Broadly their role addresses three areas:
1) Moving those prospects that are stalled in the find/try/buy process along…. E.g. A customer filled in a form for the trial but did not buy.
2) Addressing large opportunities and aggregate users into enterprise level deals …with the sales model turned on its head individuals and departments are first time buyers rather than the enterprise
3) Upgrading existing customers into higher value products and otherwise extending and increasing the vendor/customer partnership.
Most young software companies concede that they have a hard time competing with big boys in the enterprise. The above approaches enable the new companies – If I can use a baseball analogy - to hit the big guys where they are not: small departments in the enterprise and small and medium size businesses. Best of all, they can do at a significant lower cost than the traditional “proven” sales and marketing!
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