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A Timeless Tale of Two Sales Cycles

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A Timeless Tale of Two Sales Cycles

Written by: Steve Hall

The first time I cold called Andy, in early 1994, he was pleasant but firm.

“Yes, I know all about your software but there’s no way we’re ever going to buy it. We’re happy with what we’ve got and we can’t afford the money or disruption of buying a new ERP.“

As the Managing Director of a large Australian publisher Andy was undoubtedly the decision maker. And as a new (if, at 43 years old, rather old) business development manager selling into the Australian publishing sector I had no option but to call Andy back – because there were only 40 publishers in Australia big enough to afford our software.

Luckily, like me Andy was a Pom from the North of England and (possibly unlike me) a very nice guy. We had a bit of a joke and a chat about the challenges of distribution in publishing and I said I’d stay in touch. And I did.

Every few months I’d call, we’d talk about publishing and distribution and football and we slowly developed a relationship. After a while I dropped in to have a drink with him when I was in Melbourne (I’m based in Sydney) and, after two years, things changed.

Things always change – eventually.

Suddenly the publisher’s distribution arm won new customers, volumes and demand went up and their warehouse system couldn’t cope. This stimulated a search for a new ERP, I was on the spot and the sales cycle proper began.

After 6 months we were chosen as the preferred vendor, subject to agreeing contracts. So in mid-1996, during my prearranged holiday in Europe, my wife and I sat on top of a small mountain outside St. Nectaire in France’s Massif Central trying to get a signal on my massive (or massif) analogue phone to get the news the MD had signed the contract.

Which was just as well because the commission was paying for the holiday.

My reception the first time I visited the Finance Director and IT Manager of a large Sydney based publisher, again in 1994, was somewhat different. They were, at least in theory, a customer as they used one module of our software (Royalties) but their IT manager was in love with their ERP system.

“We have the best ERP system in the entire company worldwide” he told me. “In fact, it’s so good they will be implementing it around the world. So, you have no chance – in fact we’ll be replacing your Royalties system within a year.“

Things change.

The IT Manager left, the “best in the world” system never left Australia and soon became outdated, our Royalties system stayed in place, I kept visiting.

Eventually a search for a new system began. It took a year, encompassed many demonstrations, visits to New Zealand and negotiations and it resulted in my biggest sale in 1998.

So, what’s my point? Or rather, what are my points?

  1. Lifetime value
     

The first deal, in Melbourne, was something in the region of $1 million – quite a lot in those days.

But that pales against the lifetime value of the deal. That publisher still uses the software and in the 20 years since my initial sale they have invested well over $10 million in software, hardware, maintenance, support and services.

It was also the springboard for my company winning a number of other deals in Australia, the UK and South Africa.

Similarly, the Sydney deal has generated well over $15 million in revenue.

The morals – a) look at the big picture, not just the initial sale and b) “No” now doesn’t mean “never”.

Another moral that Joanne Black would love – you can’t beat referrals. These two sales got me a lot of referrals.

  1. Sales Cycle
     

What was the length of the sales cycle in both cases?

Well, it depends on how you define the sales cycle. From “let’s start looking” until signing a contract it was 6 months (Melbourne) and 12 months (Sydney) respectively.

From my first contact it was 30 months and 4 years respectively.

And on an ongoing basis it was much longer because I kept going back and selling both companies more modules and more users throughout my time as account manager (and later sales and marketing manager).

The moral – sometimes sales cycles can be very long, but sometimes it’s worth it.

  1. Customer experience
     

There’s a lot of emphasis on customer experience these days and as account manager after the deals were signed I put a lot of effort into making sure they remained happy customers.

But I’d argue that my involvement with them began the day I first spoke to them and their experience of me and my company BEFORE they signed was just as important.

The moral – the PROSPECT experience is almost as important as customer experience

  1. Adding value
     

I got my first sales job at the age of 43. I knew nothing about sales but a lot about business – and I was very comfortable dealing with senior executives.

I put a lot of effort into learning about publishing and it wasn’t long before I could speak publishing lingo (ISBN, returns, front list and back list, pub dates, etc.) and discuss publishing specific issues in depth.

It helped me win a lot of deals against better sales people and bigger generic ERP customers.

The moral – if you can speak the prospect’s language and provide insights and add value you don’t need all the slick sales tricks.

  1. Long term view
     

I was very lucky. I worked for a private company and I was given time to learn. In my first year I sold next to nothing. I did lots of cold calling and I hated it. I looked for other jobs but I thought “I’ll just make these calls and pretend I’ll still be here in 12 months.“

Twelve months later those calls were generating sales. Two years later I was selling heaps. Four years later I was in charge of worldwide sales & marketing and selling heaps all over the world.

If I’d been a rep in today’s quarter by quarter world with micromanagement and set activity targets I would have lasted 9 months tops.

The moral – or rather a question. Is the current system, where turnover of sales people is well over 25% a year and the average tenure is 24 months, a recipe for long term sales success.

I think you can describe the process I followed as “educating and nurturing”, not that I thought of it as such in those days.

I think it’s one of the most powerful ways to win big ticket, complex B2B deals. But how many software companies know how to do that these days?

Not enough, I suspect.

  1. Things change
     

That’s the moral. Things change. be ready.

Summary

I spent 13 years in a sales role with that company and only left two years after it had been bought by an international ERP developer.

Some years were better than others. Some years I made 300% of quota, followed by lean years. How many companies today will tolerate lean years?

Many companies today take a very short-term view. In my opinion that’s literally short sighted. But they would argue we have no choice, our shareholders demand short term results and we have to manage quarter by quarter.

To which I’d respond “What’s the most successful company in the world that takes a long-term view and ignores short term considerations?

Amazon. I rest my case m’lud.

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