External Sales Force in Tech is Extinct – Pivot to Maintain Relevance

As a tech industry veteran, I have witnessed many a trend but must discern necessary adjustments to stay ahead of the competition. In my current role as CEO of a cloud automation company, my most important task is to act as Chief Revenue Officer. This measurable responsibility is pretty clear; generate revenue and profit for the company to continually increases shareholder value. The pressure to deliver solid results can be distracting especially when immersed with “intangibles” that develop the products, strategies and tactics that enable the company to achieve those revenue and profit objectives. My time in the tech trenches has shown that the most effective enterprises continually question basic assumptions and traditional business models.

The secret in the sauce of an effective CEO is to know when to veer off an accepted path and blaze a new trail. The first step is to assess the landscape and to spot constants and variables. In the tech sector, the constant is that the pace of change and technology evolution accelerates. This produces consumers and professional users that are knowledgeable and sophisticated; they understand how technology works and can easily find the best application for their needs. The variable is how to deliver products and services to best meet those needs.

The constants in our industry:

Cloud platform management is a red-hot market. Consumers, small, mid-size, and large companies have eagerly embraced lower cost cloud services like Amazon Web Services (AWS) to host their applications, content and data. Nobody has to spend a lot of money for physical, onsite computer servers to store their information. This will remain unchanged for the foreseeable future.

Getting applications and content to the cloud and managing these assets once they have migrated, is big business. Embotics automates the management of those cloud hosting services for large enterprises and Managed Services Providers. The most important thing we do for IT professionals and businesses is to make the automaton and management of cloud simple and fast with immediate cost transparency. Having a great product is a given in any sector but tech professionals are especially savvy and discerning. Any changes to products are largely driven by technology evolution rather than business strategy.

The Variables and Game Changers:

However, the delivery of how IT professionals expect to assess the best solutions to their problems has changed. This generation of IT consumers and their organizations are moving away from traditional sales practices and the tired vendor approach of a high cost, empty suit ‘enterprise sales rep’ knocking on the door or pinging them daily with emails. Consumers expect to select solutions when they want them, as they define them, with immediate response to their questions whether they are buying an app for an iPhone or another sophisticated IT product. My epiphany was that Embotics needed to pivot from our traditional sales and marketing approach.

Our new mandate was to allow our product merits to be evaluated without interference that adds no value. Instead of relying on an external sales force, we switched to a buying 2.0 mindset. The elimination of our external sales force a year ago has resulted in:

• Steeper investments in our products
• Funding for more IT architects to guide our customers only when asked and only when they need it.
• The ability to offer free downloads and trials
• A sharper focus on providing authentic solutions to current IT challenges
• A focus on IT community engagement like ongoing free webinars and the sharing of real customer challenges and experiences at industry events

Companies must recognize that with well educated consumers, making the shift to a self-service selection model where the consumer downloads, tries and then buys your product (and only if your value propositions hold true for them), can actually result in higher revenues and a much lower cost of sales.

One year ago, it was a bold risk- would this major pivot completely decimate our business? The result was dramatic but not surprising; Embotics got major addition by subtraction.

Specific metrics that back up the merits of the pivot:

• Sales bookings grew by over 100%
• Customer acquisition costs dropped by nearly 70%.
• 100+ customer wins and a better than 90% retention rate.
• The opening of a Boston office this year to meet growing demand.

Our thesis has been proven and will be expanded. The next step is to continue to make our products self-selecting, further partner with our IT community to solve very complex problems for sophisticated buyers, but always keep it simple to evaluate, buy and implement our solutions. Contrast this approach with the Oracle sales debacle in strong arming customers to buy cloud services that they did not want and certainly the Buying 2.0 mindset seems to best for future proofing sales tactics going forward.

Personally, I believe the traditional sales force will soon become like brick and mortar shopping malls; extinct. Whether you are buying software, clothing, or cars, it’s all being done, or will be done, online. The sooner all companies embrace this new market economy of sophisticated buyers, and adjust to “selling” the way consumers want to buy, the better chance they have of remaining relevant. Just ask Circuit City, or BestBuy.

Michael Torto, CEO of Embotics is a highly experienced technology company CEO with over 25 years of executive leadership. Michael’s experience is global, having led both private and public companies of varying sizes, stages and locations, to eventual liquidity.

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