Cloud Computing is Having a Disruptive Impact on Sales

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The market for IT is going through a generational shift. I can say this with a high degree of confidence because i am old enough to have lived through most of them. The idea of generational shifts was not something that was of high interest to me until I started to do some research into writing this blog. It turns out that the paradigm shift in the market has as much to do with a generational shift as it has to do with economic or technological factors that are playing into the big changes that are taking hold in the IT industry today. So let’s split the drivers for the shift in the IT market into 3 categories; Economic, Technological and yes Generational.

Economic Factors:

The recession has clearly had an impact. By all accounts there are fewer deals going around today. Customers have been cutting projects and there is now a much greater focus on the benefits, the economics of IT than we have ever seen before. Significantly there is a well-documented shift from Cap Ex spending to Op Ex spending. Business Decision Makers have to some degree taken life into their own hands and adopted Cloud based business applications like Salesforce.com. In many cases IT has played little or no role in the decision making, provisioning, training, usage or support of the solution.

Cloud based solutions are clearly economically very appealing, pay as you go, pay for what you need, is a very appealing value proposition to a Sales Manager who simply wants to improve his ability to forecast his business more effectively. No need to get caught up in the big black hole called the IT department.

IT in turn has embraced the shift on the basis that they can refocus themselves away from the drudgery of keeping the lights on, let’s pass this burden onto someone else, to let’s focus on doing exciting projects that lead to innovative new ways of doing new things where the business most needs us to help.

Technology Factors:

From a technology point of view the whole structure of the IT industry is changing rapidly. We are seeing the very essence of Michael Porters market forces model playing out in-front of our very eyes. Cheaper more cost effective substitute products are coming into the market bringing with them a host of new companies aiming to out value the traditional players.

Generational Factors:

From a generational standpoint and this is where things really start to get interesting, we are on the cusp of a shift in terms of technology decision making control and influence. A shift in size and magnitude that we have not seen before is upon us. The Baby Boomer generation has given way to the Generation X’s and as we look forwards on the horizon we can already see the Generation Y’ers waiting to play a significant role in the battle of who gets to decide what technologies we are going to use in our corporation. The Generation Y’ers is already maturing to an age and level of influence where they must not be discounted by vendors and sellers of technology solutions.

Mind the Gap is fast becoming Chasm Crossed!

There really is a perfect storm of change taking hold in the IT industry. The economics of Cloud computing are increasingly so appealing that less the very largest, corporations would be foolish not to seriously consider Cloud as a viable, meaning more economical alternative. Moreover, capability advancements in Cloud based solutions are significantly closing the gap vs. the traditional PC alternatives such that mind the gap is fast becoming chasm crossed. It’s now almost impossible to recognize the differences between a Cloud based application and its PC stable mate.

Generation Y’ers are becoming more and more influential because they assume the internet in the same way that Baby Boomers assumed the telephone and Generation X’s assumed the PC. This is a very important point for businesses selling technology solutions and services into corporations. Knowing the differences in profiles of generations that are in-play in the company you are selling into will enable you to design different sales strategies that will optimize your ability to successfully connect with the different generations through channels that best favor the way that the different generations favor being connected with. Stupid example i know but probably you would not try and connect with a Baby Boomer through a social networking site or conversely you would not try and connect with a Generation Y’er through the office desk telephone.

Generational Profiles:

Let’s try and understand this more deeply. Consider the following. Baby Boomers used 3 distinct channels to communicate; Mail (yes remember those days), Phone (yes remember the telephone ringing on your desk) and face to face. For Generation X add to this list email, the mobile phone and the pager. Now let’s look at Generation Y’ers.

The number and variety of channels for connecting and communicating has simply exploded. Add to the list cell phones for texting, instant messaging, tweeting, wall posting, social networking and rich media such as You Tube. If the only Generations that you sell to are Baby Boomers keep on using the office telephone but here’s a secret that not many corporate telecom professionals want you to know. If you pick up the phone there is no longer a dial tone bleeping at you frankly who needs it?

But if you’re smart and are starting to get the point about the need to connect to different generations in different ways you are already turning your headlights onto taking advantage of the Generation Y communication channels; Twitter, wall posting, rich on-line media and most importantly B2B social networking…the big one!

LinkedIn – Fast becoming the B2B Social Networking Platform – the platform for sales:

Consider LinkedIn. LinkedIn now has 100 million professional subscribers, 44 million in the US, 56 million outside. It’s exploding with subscribers with 450% growth in Brazil and other countries getting on-board faster than we can imagine. LinkedIn is fast moving from a job/CV posting site to the pre-dominant B2B social networking site. For example there are now 17.8m groups set-up on LinkedIn with thousands of users facilitating, participating in forums and discussions in real time each and every day and night. When Generation Y’ers leave the office they simply pick-up the thread of the discussion on their cell phones and keep on with the discussion in the restaurant, the gymnasium or at the convenience store.

Why is this so important, really why? Because the 17.8m groups set-up on LinkedIn and other B2B sites are increasingly being taken over and run by Generation Y’ers. Its the place where these people go to get educated, get inspired by accessing rich content or through recommendations made by others participating in the groups. B2B social networking sites like LinkedIn and others will fast become the platform of choice for buyers offering free access to knowledge, advice, insight and recommendations from people like them who have overcome similar challenges, just like theirs. Who needs the vendor sales person when you have the social network?

The baby Boomer days of calling-up your account manager and asking for a meeting, followed by a presentation, followed by a proof of concept, followed by the solution proposal and maybe even the dreaded RFP, followed by protracted multi-year licensing agreement negotiations between vendor, purchasing and IT are being taken over by a dawn of a new way to buy that can be characterized as follows; Click to web, click, click to social, click, click, get educated, learn, click to trial, be inspired, click to buy and if satisfied grow and click, click back to social to share with others.

The Tipping Point

What’s most interesting is that we can chart this perfect storm change. See the chart below. I refer to this as the Tipping Point chart. On the Y axis we see the sales or technology shift, where the increasingly appealing economics and capabilities of Cloud solutions are driving growth in sales to the detriment of traditional on-premise solutions. On the X axis we see how the shift in generations is taking hold. Baby Boomers are getting older and relinquishing control to Generation X’s. In fact Generation X has been in-control for years in many corporations. But Generation Y’ers are growing-up and maturing fast. Increasingly they are standing-up and voting with their voices, influencing the decisions and direction of technology in the corporations they are working for.

I believe it is in no way a co-incidence that the tipping point for the market where sales of Cloud solutions will be greater than sales of traditional solutions is at the exact same time that Generation Y’ers are starting to exert their influence to a level that will shift the pendulum towards solutions that are most attractive to them and away from solutions that are much less attractive and unnatural to them.

This should serve as a wake-up call to all sellers, because you had better start to make sure that you have effective engagement strategies that are attractive to multiple generation profiles otherwise you may find yourself becoming less and less relevant.

By 2014 the average age of Baby Boomers will be 60, retirement on the horizon. For Generation X’s the average age is 43. Clearly Generation X’s are in control. But by 2014 the average age of Generation Y’ers will be 30 – ready to have a big impact!

When you start to drill into the profile characteristics of the Gen Y’ers you find some interesting facts. For example, they communicate through multiple channels, they multi-task, they do not live life to a map, they resist structure and process, and face to face meetings are considered un-productive use of time vs. just in time interactive meetings. But don’t get me wrong they believe in participation more so than any other generation, but they want to do it in a different way. Because of these profile traits Gen Y’es are fast movers up the corporate ladder. They are very efficient and through their natural inclination to connect with others their sphere of influence is growing rapidly. Also, their behaviors are impacting the Generation X’s who do not want to be left behind and so the profile of Generation X’s is moving closer to the Gen Y’ers and away from the workaholic, highly structured, process driven Baby Boomers.

The buying landscape is changing

Driven by these economic, technological and generational shifts the buying landscape is changing significantly. Sellers must respond to these changes or risk becoming much less relevant to buyers in the future. Importantly the profile of what it means to be a World Class Seller must adapt. World Class Sellers will continue to need to be experts with regard to the products they sell. Likewise they will continue to need to understand the industry context within which they are selling. They will continue to need to be expert in the techniques of solution selling; understanding and aligning the products and services they are selling with the needs of the buyer.

What’s changing is that sellers must be able to demonstrate a deep understanding of the value proposition of Cloud based products. They must be able to help buyers compare the value of traditional products vs. the new Cloud based products and most importantly they will need to be able to facilitate the buyers as they move through a traditional buying process as well as a new Cloud enabled process. Thus the definition of what it means to be a World Class Seller has grown significantly.

Given that Buyers are much more knowledgeable, looking for more ways, not less, to self-service themselves; buyers will enter the sellers sales cycle at points much more advanced than in the past. For this reason sellers must find ways to track the digital footprints of buyers so that they can stay in touch and be as aligned as possible with the buyer.

Sellers must become experts in connecting and building relationships with buyers through B2B social networking sites such as LinkedIn. This will require the development of new social networking skills and a new toolkit that enables sellers to deliver rich content into the groups and forums that they must start to actively participate in. It will only be through the delivery of very high value adding content that sellers will be able to distinguish themselves within the congestion of social networking groups and forums.

In this regard sellers will need to become inventors and creators of value adding content. Successful Sellers of the future will be more like artists than scientists, thus changing the balance for success towards the art as against the science of selling.

What are sellers saying about the potential changes?

In a recent survey completed by over 1,000 worldwide sales Professionals by OgilvyOne they were asked if buyers are more informed about products and services than ever before. Not unsurprisingly nearly 90% agreed that buyers were much more informed than ever before. They were also asked if the buying process was changing faster than sales organizations were able to respond. Nearly 70% said that they were struggling to keep up with the rate of change.

Sales must respond. What actions should sellers take?

Action 1: Re-write the profile of a World Class Seller

Sellers will need to re-write the profile of what it means to be a World Class Seller. The pendulum is switching. World Class Selling will become much more about the art of selling vs. the science of selling. Almost a complete 180 degree shift from where we have come from.

Action 2: Re- Skill Sellers

Managers of Sellers must assess the skills of their existing sellers. Many will need to be re-skilled. New social selling skills will need to be adopted in order to meet the shift in the buying landscape.

Action 3: Hire a new generation of Social Sellers

Importantly, new sales people will undoubtedly need to be hired for whom connecting and sharing, educating, inspiring others in an interactive way with rich content is a natural part of their DNA. It may not be possible to change the DNA of the traditional sales person. It may also not be cost effective to try and move or even combine sellers of traditional products and services with sellers of Cloud based products and services.

Action 4: Re-write the Sales process

The sales process will need to be re-written. The solution selling process that we know today was mostly written to align to Baby Boomer and Generation X buyers. These processes were not designed for Generation Y’ers buying Cloud based solutions. The social selling process will have as much that is new as they have which is common with the traditional solution selling processes.

The traditional sales process assumes buyers start at the same zero point is disrupted in the Cloud. Buyers will often take many steps without the seller, going backwards and forwards at will. Sellers must be prepared to engage with buyers on buyer’s terms and at any point in the sales cycle.

Action 5: Build new Social Selling toolkits

New social selling toolkits will need to be produced by and on behalf of social sellers. Toolkits will need to include content that can be shared across social networks that transfers knowledge to buyers, educates and inspires them. Most importantly, the content should trigger the buyers to take action towards the seller’s products. These toolkits will need to be in a constant state of change with new content designed to support new and exciting ways to attract buyers connecting socially. The sellers themselves will need to take on much more responsibility for the creation of inspiring content. They will need to act more like creators, inventors of great content that can be shared socially.

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