Sales and Marketing: May the Force be with You
Another step towards world domination by the cyber race, or a canny tool for resellers? Simon Meredith reports on salesforce automation software
Salesforce automation (SFA) and marketing software was once regarded as a major opportunity for resellers. A way of selling to the salesman. But it proved to be a difficult nut to crack. Too much effort was needed to make the sale and hold a meaningful margin. Software developers found themselves dealing directly with those customers who had, eventually, been persuaded to sign on the dotted line.
Part of the problem with this market, for resellers and for users, was that it always seemed to be asking users to invest large amounts of money to automate tasks which appeared to be functioning perfectly well already. This was partly because of resistance from sales people, and partly quite simply because the products were complex and expensive. The level of risk was high and sales people did not like the idea of sharing their information with the company.
But competitive pressure in business has grown, PCs have become pervasive and familiar, even if only for wordprocessing, email and the odd spreadsheet. This has woken many companies up to the possibility of automating the sales task. And now that we have Windows-based software, systems don?t seem half as complicated.
The use of email as a customer communication method has grown, and some firms have started using groupware as a repository for customer data. Accounting and database information is being made more readily available to customer-facing personnel, and thus we have information being made available to sales teams through the client/server model.
Tania Holmes, MD of one of the country?s leading sales and marketing specialists, Market Solutions, says database vendors have started paying more attention to the market in recent years. Users want the flexibility to tailor solutions to some degree, and just about all vendors now offer a rapid applications development tool as part of their offerings.
Sales people are using the internet as an information gathering tool, and as front-end systems move towards browser-style interfaces, the prospect of using enquiry tools and perhaps contributing new information to the database becomes less daunting for the sales team.
In sales and marketing software this has driven several new trends in development and presentation of the systems. Products are now much simpler and use Windows as much as they can. They tend to be modular and able to interface with existing or standard SQL-based systems. This means they can be seen either as small, focused packages ? on telemarketing for instance ? or part of a larger, integrated system that might cover the entire sales process, from direct mailing through the telesales process, lead tracking and final analysis of results.
Sales departments are being seduced by the IT industry ? sucked in by the allure of the internet ? and communications. Suddenly, it has become necessary to communicate with customers electronically and it is much easier to boot.
This is changing the shape and appearance of the sales and marketing vendor, and dragging others into the fray. Groupware specialists, internet developers and even network computer vendors are starting to take an interest. There is talk of sales and marketing being a golden opportunity once more.
Specialist consulting firm the Hewson Group says the salesforce automation market has grown very little in the past three years and was worth just #53 million in 1996. But it believes it will be worth #140 million in 1999 with 70 per cent of the revenue being generated by service. It sounds like a small figure but Hewson may not be picking up all the potential. It concentrates on the higher-end solutions and excludes some areas, such as direct mail and call centre management, from its calculations.
There is some encouragement for established resellers in Hewson?s findings. Increasingly, more emphasis is being placed on the supplier than the software. Hewson says that no more than 12 companies have 80 per cent of the market and that only six of these have the infrastructure to satisfy the increased user expectations in the higher end of the market.
User organisations expect high-level integration and project management skills as well as greater awareness of marketing and sales methodology issues. While resellers may not have specific expertise in the latter, they can be seen as experts in integration and projects.
It may be time for sales software vendors and resellers to start forming partnerships. This would enable resellers to enter the market more rapidly. It is something they have been thinking about at Market Solutions, says Holmes, but ?resellers would have to be really, really committed?. The diffi culty of SFA projects should not be underestimated, she adds.
Generally they are not, says Tim Dean, MD of Grey Cell Systems. He believes working with dealers is a waste of time. ?It?s too long a sales cycle. We have been concentrating on blue-chip clients. That?s what most of the leading SFA vendors are doing.?
Integrated Sales Solutions (ISS), publisher of Oxygen, sells to large organisations. It usually works with a third party on large projects, but more often than not it?s a consultancy rather than systems house, says the firm?s Philip Richardson. ?It makes sense for us to partner with one of the big six because of the pace of change in the business. It helps to underpin the project and make the changes you need during the implementation process.?
Although the SFA vendor might not see them, somewhere there is someone supplying platforms for these systems. The value of most projects now runs into six-figures for the software and integration alone. Yet a company like ISS might have fewer than 20 clients and annual sales of under #1 million, so using resellers is hardly an option.
But not all vendors have taken this stance. Unitrac Software has been one of the most successful SFA vendors in the past three years. It has largely built up its business by using a network of resellers. Some of the 14 or so Unitrac dealers in the UK are specialist SFA resellers, but not all of them.
London-based ICOS got involved when it looked for a solution for its own salesforce. It had used three different SFA solutions over a period of about five years and found that none of them could move and develop with the firm. Finally, it tried Unitrac and found that it met the firm?s needs very well.
ICOS? experience inspired a further thought, says the company?s sales and marketing specialist Steve Sydee. ?We realised that if we were having problems, lots of other people must have similar difficulties.?
ICOS became a Unitrac reseller, but it was not expecting too much, says Sydee. In the event, the company has been surprised at the level of interest from users. Sydee told PC Dealer that the firm had Unitrac implementations lined up that would keep its team working for the next six months.
Geoff Tucker, MD of Unitrac Software UK, says that while many of its resellers have a sales and marketing background or focus, the company also needs dealers with integration skills. This combination of abilities is becoming more important because projects are getting bigger. ?Two or three years ago, people were looking for something simple and cheap. Now people are often looking at investments of between #100,000 and #200,000,? says Sydee. ?The systems have got larger because the products have arrived now.?
He also believes that business attitudes have changed and that it has become easier to sell the sales and marketing concept. ?If business is losing leads, it could be costing a lot of money and it?s really very easy to cost-justify,? he says.
Tucker thinks more reseller involvement is the way forward. ?We have enough to do developing the software. We need the resellers to supply and integrate systems and to support the customers,? he says.
Even so, it is still a major commitment and it takes time to see a return on the investment, says Tucker. ?The reseller has got to commit to the products with sales people and support. It is an easy product to use, but it also has a lot of functionality and you have got to learn about it in detail.?
This statement could be applied to most of the leading sales and marketing systems. They look and feel easy enough, but when you get into the detail, into the fine-tuning, the rapid-applications development and the integration, solutions become functionally and technically complex.
Only those resellers with the right mix of skills will be successful, says Tucker. Sydee agrees, but also believes there is much more room for more dealers in the SFA market. ?Skilled IT professionals need to be involved now because projects are larger and more complex. The market is growing and it?s going to need a lot more professional skills. I think people with the IT skills and knowledge of sales and marketing will do well.?
The internet could be an important factor in getting more resellers involved, he says. There has always been a need for sales people to communicate with the office and to be able to communicate with customers and contacts while on the move. Mobile phones have helped, but people are busy and the connections are not always 100 per cent reliable. Internet mail is going to provide a way to stay in touch.
This is an area few SFA vendors have addressed. At last November?s Softworld in Sales and Marketing ? the premier event in the SFA calendar ? only a handful of software companies were ready with internet functionality, but there were four internet-specific exhibitors. There was more of a focus on the use of the internet as a marketing tool than as an enabling technology for SFA systems.
Even so, the internet has the potential to alert businesses to the possible benefits of using SFA. It could provide a foot in the door for the dealer, according to James Minotto of NC developer Nchannel, which exhibited at Softworld.
?With network computers, you can now offer very low-cost communications solutions that reach from the coroner shop right up to the corporation. You need to be aware of what?s happening out there ? even if it?s only with your own employees,? he says.
So resellers with internet experience could be developing their own connections and opportunities, providing functionality SFA can?t.
Richardson thinks resellers that do get involved in SFA need to take the system beyond the sales arena. ?There is very little opportunity for an ordinary reseller, but there?s a lot of scope for a systems integrator that will use the technology as the basis of a larger system it can put together,? he says.
And size is important, says Sydee. Smaller resellers won?t be able to operate in the SFA market. ?If you are a million pound business you are going to find it hard to sell half-million pound projects.?
Yet many software vendors, let alone resellers, are relatively small businesses with annual sales of perhaps only #5 million or less. They may have all the requisite skills in their own software, but if the system is to be part of a larger, integrated project, there needs to be a third party.
The question in this market is not how much potential it has, but how people refer to it. Much of the opportunity may be hidden as part of enterprise-wide systems development, groupware or workflow projects. This begs the question: can SFA survive as anything but a very specialised niche market with a limited number of suppliers who do everything ? develop, implement and support?
Already this appears to be the shape the market is taking. If it stays that way, resellers and systems integrators can only try to get on well with the SFA vendors they meet and address customer requirements when they arise.
If, however, products like Unitrac can keep customers? focus on the sales and marketing solution, perhaps it?s an area resellers with the right experience and the integration skills should look at once again.