Home | About | Recent Issue | Archives | Events | Jobs | Subscribe | ContactBookmark The Sterling Report


Will the enterprise market spend significant IT budget on Windows Vista in 2007?



Creating Competitive Advantage and Sustained Growth For Your Software Company

By Jim Allen, President, Value Based, Inc.

How will you create sustained growth for your company in the coming years? A recent Gallop Poll found that over 97% of senior executives expect business to get tougher over the next 10 years.

I know, as a software company executive you’re probably saying . . . “The next 10 years? How about the last 3 years? What was that?”

Either way, the question remains . . .
“What can we do to create competitive advantage and sustained growth for our companies?”

In the past we’ve tried adopting new tools and technologies. We’ve tried re-engineering our processes. We’ve eliminated all but necessary costs and we’ve reduced headcount as a way of meeting the challenge. These have helped, but are they enough?

We’ve all heard the Microsoft and IBM stories. Here are two companies not known for having the best technology solution. In spite of this, they continue to hold a dominant position in their respective markets by investing in world-class sales and marketing organizations. I know we’ve all heard this before, but has the truth of it become real to us? Real enough for us to make a change? Are we ready to invest in sales and marketing?

What do you think of when you consider investing in the sales and marketing functions of your company? After years of working with software sales and marketing departments we have boiled it down to what we call the 3-Ps . . . . . prospects, people and processes. If we focus our time and resources in these three areas we will realize the highest return. Let’s take a look at them.

Prospects –

Getting above the noise level, and gaining access to decision-makers are the biggest challenges we hear from software and services companies today. Most of us have used direct mail, print ads, seminars, P/R campaigns, and cold calling to touch our target markets. Many software companies have experimented with some of the new e-marketing technologies such as video and audio streaming, webinars, HTML email campaigns, and interactive dialogues to create increased brand awareness, build opt-in databases, and to get more qualified leads.

Since our goal is to get qualified prospects, let’s look at how some software companies have successfully mixed, matched and blended current Internet technologies to increase the quality, and flow of leads to their sales people, and as a result built a competitive advantage.

Merant delivers software and services that enables organizations to control and manage business-critical information assets, software applications, web content, product and customer data. More than 1,000 visitors come to their site each day. Their problem was that less than ½ of 1% of these visitors were being captured. A partner of ours, i-OP, helped them design and build a primary conversation path that containing a relevant and valuable offering that increased their capture rate to over 5%. Once captured, the lead data is quickly integrated into the Merant CRM system to enable a fast response by their sales team. These leads represented a 10x increase in the lead capture rate, creating over $1 million in new revenue opportunities in just four months.

Another success story comes from Tektronix, the oscilloscope hardware and software company. Their Multi-format Video Generator division was generating leads; however, without sufficient qualification information their sales force would not follow-up on them. Again, our partner identified an application note that would be valuable to their prospects and used it as a way to draw them into an interactive dialogue. The dialogue took the prospect through a series of branching questions that explored the nature of the prospect’s need and their purchase urgency. The customer information, with lead qualification details, was scored, formatted and automatically uploaded to the company’s marketing database. The results have been impressive. . . 31% of the participants and registrants that received the email requested the application note. And of those, 67% who completed the lead qualification dialogue, qualified themselves as a sales lead. The resulting leads represented an overall capture rate of 21%. As all marketing materials were delivered electronically, Tektronix was also able to eliminate the literature fulfillment costs for these types of campaigns. There are many more success stories from those companies who are taking advantage of increasing bandwidths and the latest Internet technologies to touch their target markets.

Another benefit to this technology is the ability to quickly determine the number of successful target market touches, measure the relevance and effectiveness of a marketing message, and then gain qualification information immediately. Having this information means both the sales and marketing departments can quickly track their effectiveness and determine the ROI on a specific campaign or sales thrust. Not only does this provide management the kind of accountability they want, it also allows us to adjust our message and medium to improve our campaign results.

People –

The last 3 years have been tough on our industry. It’s especially been tough on VPs of Sales. Warren Culpepper, a software industry expert, found that in the early 90’s the average tenure for a software sales VP was 2.5 years. Although we haven’t compiled any hard data, my estimate is that the average tenure is now down to less than 2 years. More than 50% of our clients either lost, or fired, their VP or Director of Sales in the last 3 years.

What are we doing to retain and develop the right sales leader and their sales force? Have we developed a “care-less” attitude when it comes to our sales force? Do we see them as expendable, mercenaries that might produce for 2 or 3 years and then be gone?


  Home | About | Recent Issue | Archives | Events | Jobs | Subscribe | Contact | Terms of Agreement
© 2006 The Sterling Report. All rights reserved.