How to Overcome Sales Challenges for Tech Companies
In the technology sector businesses especially, startups face a lot of challenges in terms of sales and marketing. This can of course be attributed to a lot of reasons, the majority of which point towards the changing industry dynamics and sometimes the complexity of the product itself. The industry environment and trends sometimes change overnight, and for a tech business, the adapting phase is not easy.
By complexity of the product, we mean how the service itself is customized specifically in the tech sector and that of course poses a different challenge for the sales team altogether. Here today we will not only discuss the sales challenges in the technology industry as well as those for technology startups but will also analyze how these challenges impact the overall sales strategy of the business. We all also present how these challenges can be counteracted with practical and efficient solutions.
How Do Challenges Impact the Overall Sales Strategy?
Before we look at how certain sales challenges, especially those faced by tech-based companies, impact the overall sales strategy, let us reflect on the sales strategy process. It is commonly believed that having a documented sales strategy with a foolproof execution plan and a team that listens to you is the ultimate key to sales success. But time and time again it has been proven through industry examples, experience, and even academic research that despite having everything set in stone, sales strategies do not guarantee success.
Sales strategy means a documented plan that describes how you will position and sell your product in your target market in a manner that differentiates you from your competitors. Sales strategies are put in place to help provide a clear sense of direction and objectives to the sales team in alignment with the overall business strategy. So, when we talk about challenges in terms of sales that are faced by technology-based businesses, you can develop a sense of how they play a role in impacting the sales strategy.
The challenges that are being faced by the technology industry in terms of sales are targeting the basic building block of the sales strategy. As we discussed, the changing dynamics and the threat from new or existing competition make it difficult for the value proposition to be communicated, as well as at times to be formulated in the first place. Without a value proposition in alignment with the market, the first step of the sales strategy cannot be taken. Therefore, the impact of any of the sales challenges in today’s times cannot be ignored. These challenges must be met head-on and be tackled in a sustainable way to ensure the protection and sanctity of our sales strategy.
Sales Challenges for Technology Companies
Let us now look at these sales challenges for technology-based companies in today’s times. Not only will we analyze the challenges based on the market dynamics, but we will also present relevant solutions to handle the challenges and succeed in overcoming them.
Large Order Volume
The complexity of the orders for a tech-based business, especially a startup, can be easily managed if the target segment is distinct and consists of a small number of clients. But with growth and sometimes even in the start if this segment that you’re targeting is not only wide but has certain demands then this becomes a challenge that you must overcome. Sometimes with the offering of your service or product, you also must give fringe services and updates, which also becomes an issue for your sales team especially when large orders are involved. Keeping all this in view, in today’s industry dynamics the offering of customized services along with fringe products has become a necessity to survive.
Solution: The solution to this sales challenge is very simple but yes does demand certain financial investment. With a multitude of sales suites and CRM software available along with detailed customization options, we recommend that you invest in sales software that will not only help your sales team in managing large complex orders but will also help them in developing the most optimum quotes for the clients. Not only this, with the advancement in technology, today’s sales suits also help you in developing the most appropriate sales bundle in terms of product and services.
Client Industry Knowledge
Another major challenge that is being faced by tech startups and other companies already operating in the technology industry is the lack of knowledge about the client’s industry in their sales team. The sales team focuses on making sales which are of course their basic objective and KPI, but sometimes what they fail to realize is that they’ll only be able to achieve it if they know the industry their client operates in. After all, if you do not have information about how the client’s industry operates then how can you customize a tech-based product or service for them? Even if not for customization it is always critical to know about your client and their competition so that your value proposition caters to their pain points.
Solution: This is where the role of training and education comes into play. Before your sales team sets out in the field to approach clients and make sales, ensure that they are well educated when it comes to information relevant to your client, their needs, competition, industry regulations, etc. This information can be made part of their training and then be measured and gauged as a KPI of their performance. This of course essentially means that you would want to make this practice a part of your sales strategy and align it with your business’s overall strategic direction.
Complexity of Orders
Operating in the tech industry comes with its own sales challenges, one of which is of course the customization that is asked from you as a vendor from a client. Even if you do not offer customization, sometimes clients demand certain extended options or even bundle pricing that poses a complex situation for the sales team especially now when the industry is highly competitive and every sale matters. These situations not only make product pricing a different challenge altogether but also add in the issue of how well you will be able to match the competition’s pricing for a certain bundle.
Solution: Certain software that operates on the principle of configuring, price, and quote(CPQ) not only helps your sales team in developing the most optimum price and bundle for the client but also keeps in view the industry dynamics and of course your profit margin in the revenue stream. With different options available in relevance to the software, you can also ensure that the quotes being given to the customers are a safe play in what you are already offering to your current clients.
Licensing and Leasing
The dynamics of the tech industry have changed so much that the importance of licensing and leasing for software and even tech and IT equipment has become a norm. Customers and clients are preferring to license and lease products instead of becoming sole owners of the service. This, of course, means a cost-saving step for them but for you, it poses a challenge. Not only in terms of revenue generation but also how well you manage the whole licensing and leasing process as well as grow based on this business model.
Solution: For the whole licensing and leasing process we recommend that you make the legal team a constant and permanent pillar of your sales strategy. Not only that but your sales strategy along with its execution needs to be flexible in respect to your customer’s needs. The sales team needs to work to develop a model through which all three licensing, leasing, and even purchasing are aligned together, concerning the client’s requirements as well as your business direction.
Long Sales Cycles
The tech industry especially The IT side of it that deals in software solutions are known for its long sales cycle. This is of course majorly attributed to the heavy investment that is required from the client’s end as well as how usually it’s a B2B decision with multiple layers of decision-makers involved. The length of these sales cycles does not only impact cash flows but also plays a role in demotivating the sales team. Research has proven that sales Reps in the IT industry are more likely to quit within the first six months of their new appointment than due to non-closure of deals. What a tech business’s sales strategy should incorporate is the impact of the long sales cycle and how it will keep its sales team motivated within that time frame. Because what if a certain sales rep quit at the six-month mark right before he or she was about to close a $1,000,000 deal?
Solution: The ultimate solution to this challenge is to be clear from day one that you are in it for the long run. When developing a sales strategy, set certain KPIs and objectives that revolve around being productive within the long sales cycle and highlight how the length of the sales cycle in respect to the industry norm, shall not be the determining factor behind an employee’s performance. Your sales team will not only feel relieved due to this inclusion in the sales strategy but will also utilize their time in developing relationships with clients and nurturing a strong customer-client relationship. Because in an industry like this with a long sales cycle and heavy investment dynamics, personal relationship building with the client is a much-needed skill that not only helps you in getting sales but also in nurturing a long-term partnership.
Why Do Tech Companies Need Sales Strategy?
In today’s competitive times where the need of the market keeps on evolving, the tech companies must develop a comprehensive sales strategy encompassing all stakeholders and environmental factors alike. The need for a sales strategy especially in relevance to tech startups is justified because you might have an amazing product which is usually the case with startups. Startups come up with genius ideas and one-of-a-kind products. But as the products are cutting edge, you need someone to go out there and not only market it for you but also sell it to your target customer. Therefore, the need for a sales strategy for tech-based companies is a necessity now. Whether you are an old player in the market or just starting, without a strategically planned sales strategy that aligns with your business goals and market’s need, it will not only be difficult to survive but growth would become impossible.
Challenges whether in the form of sale challenges or strategic business challenges are part and parcel of any business venture. Especially in relevance to tech-based businesses and startups, sales challenges have become a strategic hurdle that companies are now facing regularly and hence they look forward to being well equipped to tackle those. With this guide, we hope that you can develop a framework to take on the sales challenges that you might face for your tech-based business and deliver results with sustained growth despite the ever-evolving nature of the industry.