What Enterprise Technology And Software Companies Can Do About Slowing Sales

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As technology vendors' stock prices take a hit today, it's worth exploring what is causing the lowered revenue estimates and what can be done about it. Enterprise software companies likeMongoDB,C3 AI,Okta, and many others are challenged by a new buying decision-making process.

The macro-factors get much of the attention, but they only exacerbate a problem that's been around for over a decade. As enterprise software budgets come back to reality, companies must start competing for business more aggressively than in the past. Understanding the decision-making process is critical to winning more market share and beating estimates.

The need for these products is felt most by front-line workers. Everyone from IT Techs to Software Engineers to Data Scientists feels the pain and sees the value proposition. While they are closest to the need, they are the furthest away from the checkbook. If front-line technical workers had signing authority, enterprise technology companies would not see a slowdown.

Selling enterprise software, especially targeting technical needs, has always been a multi-tiered sales process. I faced this as soon as I started my business in 2012. The team who understood the value proposition was the first layer I had to sell to, but if I stopped there, it would take several months to hear back.

The front-line technical workers needed to convince their leaders to move the purchase forward. Layer 1 is the front line, and Layer 2 is their middle leadership team. In most sales, Layer 2 must escalate the request to a higher level of leadership with signing authority. The 3 layer decision process represents a challenge to legacy sales processes.

The decision process is critical to understanding why sales are slowing. The problem I had to solve early on to keep my business's doors open was how to handle a multi-layered sales process. I attacked it like a data scientist, from a behavioral standpoint.

When I made the initial pitch to front-line technical workers, they got it right away and were enthusiastic about moving forward. So why didn't I hear back until several months later? I was not preparing the team to make their pitch to the next level.

I talked to teams once I was eventually brought in about the process. They made a pitch to their middle leadership. Weeks passed, and they followed up. More weeks passed. Eventually, the business had an urgent need, or the team suffered a setback connected to bringing me in. From there, the approval sailed through.

The problem was evident when I looked at front-line technical workers' presentations. They didn't know how to translate their needs into terms their leaders understood. I saw a few Level 2 presentations, and they did not understand how to translate their organization's needs into business terms.

Only after the need became obvious to all 3 levels was the purchase approved. Technical organizations are tactically focused. Their approach to selling the need isn't practical with the strategic thinking executive leaders who must authorize the purchase.

A new layer has been added to most sales processes at the CFO level. Technical organizations and CFOs speak two different languages. Until the need becomes apparent, the purchase will not go through.

Companies understand they need to fund transformation purchases. The emphasis on being responsible stewards for shareholdersbrings increased scrutiny to each purchase. Each layer asks tougher questions, and the people closest to the need don't have the right approach to answering them.

There are 3 steps businesses can take to increase demand for their products.

The Developer Relations role is an increasingly critical success factor for the sales process. Building a community and a content library goes a long way toward attracting and engaging Level 1. Communities are the best evangelists, and they preserve pricing power. That will be critical in the months ahead.

Businesses will be pressured to lower prices to push sales through and match competitors who start the race to the bottom. The community built by Developer Relations teaches the value proposition and provides credibility for it. The community of external evangelists uses social proof to support the products. As a result, technical workers at Layer 1 have a higher perception of value for the products.

Harpreet Sahota is writing a complete series on Developer Relations strategy. He is worth following to learn how to implement the role. Developer Relations is critical because it frees the sales team to focus their limited time on layers closer to the buying decision.

What about Layer 2, 3, and the increasingly common 4? Layer 1 represents the trusted domain experts that the business turns to for technical advice on buying decisions. Layer 2, middle layer technical leaders, are decision influencers.

The need and perception are already sold at Layer 1. Leads generated by the Developer Relations role come to the initial sales meeting with the value proposition well understood. Layer 2 has consulted with their trusted domain experts, so the process can start with teaching the need from a business value perspective.

Layer 2 requires a technical strategy approach. Middle technical leaders need someone to do the translation for them as part of the sales process. That approach has made a massive difference for me in selling to clients. They already understand the technical value proposition, so my presentation teaches them the connection between technical and business value.

I am building their presentation for them and setting them up for success. However, the job isn't done, and I quickly learned how inefficient targeting multiple layers separately is.

Hitting all 3 layers with a single marketing message is why I built up my online social presence. My audience has all 3 layers well represented, and establishing thought leadership has been effective for my business. Social media is my sales funnel and most of my marketing. Customers come to me with an established understanding of my value proposition, which simplifies the sales process.

Getting in the door at the c-level taught me a more straightforward sales process that enterprise software companies can leverage too.

Many technical products and services have value across the enterprise. The value proposition from a single organization is good but not enough to maximize the opportunity. In 2015, I changed my sales process to target c-level leaders. I was selling strategy and alignment because it was the only way to justify more significant purchases.

The sales process is much simpler when c-level leaders understand the value proposition from a strategic level. I teach prospective customers about the costs of a disjointed transformation strategy. Cloud migration, digital transformation, data, analytics, and AI strategies are disconnected. The value proposition of any purchase wasn't evaluated across their complete technical strategy.

I build a technology model for clients, and it has been my number 1 sales tool. The technology model aligns all those siloed strategies. It also aligns transformation progress across the enterprise. It gives c-level leaders a framework for managing their technologies' value creation. They can make decisions about technology purchases without being dragged into the technical details.

It also helps the downstream layers explain how their needs support the unified technical strategy. Alignment is a critical success factor in tapping into the demand for solutions.

Demand for enterprise software and technical services is healthy. Sales are there for the taking, but only if customers understand the holistic value proposition. The multi-layered sales process changes how enterprise software makers approach prospective customers.

Layer 1, front-line technical workers who are closest to the need, are most effectively sold to by Developer Relations. They create social proof through community building and give the business pricing power.

Layer 2, middle layer technical leadership, is most effectively sold using a technical strategy approach to teach them how to translate their needs for an executive leadership audience. This improves sales cycle time but does not teach the enterprise-wide value proposition.

Layer 3, c-level leaders are most effectively sold using a holistic strategic approach that leverages the technology model to teach the complete value proposition across the enterprise. This entry point has the highest close rate and the lowest sales cycle time.