THE principles of marketing and selling technology are no different than marketing and selling in any other conventional industry. An IT company is part of an eco system comprising buyers, other suppliers like themselves, influencers of demand, some with the capability to directly impact the buyer-seller relationship, and others who have an indirect effect.

If it is as simple as this in concept, where is the problem? Why are many companies in India struggling to implement an effective sales and marketing strategy? To answer this question, we need to examine certain macro, and many micro factors.

Finger in too many pies?

At the macro level, the industry is global, and comprises numerous players of differing scale. Individual players have little or no impact on the dynamics, unless they are of a reasonable size. At this time, no company in India has that size, not even any of the Tier 1 players. Even among buyers, the ability to influence the industry dynamics individually is not high. If you look at the US, the fact that the total IT spends among the SMBs is higher than that of the Fortune 500 companies exemplifies this point. What all this means is that the industry is highly fragmented both from the demand and supply sides, making sales and marketing a challenging proposition.

All reports and expert opinions advise companies to get more focused. Sure, but what does this entail? It means addressing a specific customer segment or niche within a vertical. And why is this being recommended? So that sales efforts can be targeted, and equally importantly, the company can build relevant competences in a few areas, which is more pragmatic than dipping your finger into too many pies. And secondly, it requires the company to be extremely meticulous in its approach to the market, as it is extremely easy to go all over the place, and achieve little at the end of it all.

Working out the math

Let us think through the latter process for a company that is, say, about $15 million in size. And aspiring to grow to $20 million. They expect about $8 million from existing customers (the percentage is not high; unlike for an Infosys or a Wipro because most of these companies have not been able to create long-term relationships, they continue to operate in the IT projects mode). And so the gap that needs to be bridged is about $12 million. And assuming they have 10 sales people (which is average), each has to bring in about $1 million of new business. Which means they have to enroll anywhere between 5-10 customers each, hopefully fairly evenly spread throughout the year (so that one can expect reasonable billings in that financial year!). This, in turn, means that they would need to submit proposals to about 40 prospects (assuming a 1 in 5 conversion, which is quite close to the industry average for emerging players). And therefore meet about four times as many interested buyers. Doing the math for the company, it adds up to about 400 proposals, and maybe 1,600 meetings, and hence targeting about six times as many companies to get a first meeting. This means that the sales person has to do about 12 meetings in a month, or, three meetings a week. There is no way this can happen if she does not approach her work in a planned manner. For conversion rates to improve adequate research has to precede every meeting - this will help one approach the situation in a consultative manner rather than a "here and now" manner which rarely delivers the desired outcome. Similarly, if the organization has to be geared to send out over 30 proposals in a month, it is more than a proposal a day, and we all know that all proposals are always due yesterday! So, if you want to send out proposals of some quality without investing in a large team, the only answer is planning and preparation.

Marketing as a science

The point being made is that it is possible to approach the seemingly "art-like" and ambiguous function of sales and marketing in a more scientific and disciplined manner. To do this, the first and most important pre requisite is belief at the management level that this approach is what will work in the long run. And then, focus on creating the right processes and systems to support the sales and marketing function. Few organizations we have come across invest adequately in these areas, although they have fantastically honed delivery management processes.

Some of the key processes one needs to define are the pipeline tracking mechanism, including defining the milestones in the process, a process for proposal evaluation and preparation, pricing norms, prospect qualification criteria and empowerment levels at the field. In terms of systems, two mandatory systems are a contact management and pipeline tracking system and a knowledge management system for the field force.

And lastly, a robust system for tracking progress in the function - at the activity level and at the results also. A metrics-driven approach is imperative for two reasons - firstly, the chances of unpleasant discoveries when it is too late to make amends are minimized, and secondly, it gives the management a yardstick to determine if the investments made are bearing fruit, and hence if it is required to plough more money into the function.

In conclusion, IT companies would be well advised to stick to the basics and approach the market in a systematic way. Implicit in the above analysis is the fact that companies should invest in a direct sales team. While smaller companies may choose a combination of direct and indirect selling approaches, it is our firm belief that relying on partnerships, beyond a stage, affects the predictability of business and, in the long run, it's positioning and brand. Complement the field sales team with a well-trained offshore marketing and sales support team that will work hand-in-hand through the sales cycle. This will minimize dollar expenditure and build an effective bridge between the field sales team and the offshore delivery team. We have seen companies that have adopted this approach achieve results, and would therefore strongly recommend this to all companies who are still deciding.