The stupidest question I ever got in a job interview came from a CEO (who is not CEO anymore but that might be for other reasons) asking me: “So, who do you know, who can you call tomorrow and sell my product to?” Yeah, right… all what Sales is about, is knowing people, the rest is easy. Well, everyone in high-tech Sales knows that this not true.
It’s a myth for anyone with no sales experience and especially in start-ups that one of the key challenges in Sales is to know the right people in the targeted customer organization. To understand the meaning of contacts, let’s again have a look at the sales process, for which I introduced an example in one of my previous blog posts.
If you look at the individual process stages, to have good contacts with the customer can be very helpful for the first process stage before C1 in order to start the sales process and to get the chance to introduce your solution and your arguments to the key people. However, even to take that first step often depends on current strategy, resources, and priorities of the customer’s organization, which need to fit as well and which are mostly quite independent from your contact’s influence and good will.
At the later process stages (which are equally difficult to enter) the meaning of initially having contacts is not as relevant anymore. In high-tech Sales, the buying center is normally a group of quite a few people (and not only one person), which will always try to take a rational decision based on arguments and not on personal relationships. Therefore, to move forward towards a positive decision you need to establish good relationships with the buying center, convince them of your offering, and negotiate a deal that is attractive for both sides.
So, we see that having good contacts can sometimes be helpful to speed up the first step in the sales process but is far from being crucial for winning the deal. And that is good news, because there are also scalability issues with relying on sales people with “excellent contacts in the industry”:
Recruiting that kind of sales people is limited to organizations that also serve your target customers. Those are usually only your competitors, your or other sales channels, and suppliers of complementary products. Recruiting from competitors creates major issues, because your sales persons have a credibility problem and – if they were good – they already sold your competitor’s product to the customer (which they now would have to replace with yours). That leaves the fairly small space of sales partners and suppliers of complementary products.
No matter what they claim, no sales person in the world has good contacts with all potential customers in their territory. Selecting sales people with complementary contacts will be very difficult and in general, good contacts are something that is very hard to verify upfront, before employing a sales person.
Also, you certainly do not want to bet your product’s success on your sales people’s personal relationships. That would make them quite irreplaceable and your sales organization very inflexible and dependant.
Therefore, many new contacts need to be acquired pro-actively anyway. Also, markets change and new potential customers appear, for those also new contacts need to be identified and relationships built.
For that reason it is much more important to have sales people that know the targeted customer’s purchase behavior, their typical issues and strategies and how to talk to them to be respected as peers. Even more important is to have sales people that are able to systematically understand a customer’s organization, to identify the right contacts, and to build up good relationships with them.