Salesforce key for IT start-ups
One needs to revise the strategy based on the prevailing market and economic conditions.
For every 100 IT start-up companies, only a few succeed. Out of this, only a miniscule make it big. Though factors such as aspirations, investment, client, innovation and the like are key drivers for companies to become big, the fact remains that sales and marketing are the backbone of the business.
In a small IT start-up, the founder wears many hats. The hat he cannot avoid is the customer interaction. Invariably, the CEO is likely to be a technocrat, who is also wearing the sales hat. As the organisation grows, there needs to be a structure in place along with strategy to move forward. Often, sales initiatives remain with the CEO, though he may be a technocrat. His success depends on the effective sales strategies that he draws up.
“Effective sales strategy means getting the planned sales in time with the right margins and with minimum efforts which lead to subsequent repeat sales,” says B. Hari, Managing Director, OnTrack Systems Limited, an IT and IT-enabled Services (ITeS) company. “To achieve a successful sales strategy in an (small and medium enterprise) SME, an investor should understand that sales take a good part of the investment in any company and should not be relegated to the background.
On the contrary, a sale is a very critical part of the company. Hence, a good investment and a great sales person are a must,” says Manjunath M. Gowda, Chief Executive Officer and Managing Director, S7 Software, the Bangalore-based end-to-end software migration products and services company and a niche player focussing on legacy software migrations and modernisations, services and products.
Important aspects
“Though an investor understands that effective sales strategies are the most important aspects for growth, the biggest road block here is trying to understand that sales are an important part of the organisation rather than just the engineering. Not investing enough in sales or not putting your best person in sales has been the biggest hindrance,” says Mr. Gowda. He says that most SMEs have the best people in engineering and not so good people in sales. In reality, however, it should be the reverse. Often, one finds that no clear sales strategy has been devised before acquiring clients.
“One has to spend considerable amount of time to figure out what exactly is his service, what is his value proposition and, most importantly, which real point of the client he is planning to solve. Once these are done, he needs to come out with the clear description of his typical client, draw up a list of such companies and then go to market to get them,” feels Mr. Gowda.
But SMEs typically do not adopt a consistent selling strategy, which makes them more people-dependent rather than process-dependent. Also, SMEs have their own challenges because of which they cannot afford to make mistakes in their sales and marketing investment, says Mr. Hari. The question, therefore, is: are the sales strategies pursued by SMEs effective or not? Mr. Hari is of the view that the SMEs should have a strategy to leverage the sales numbers with minimum efforts and investment to take the total sales to a newer level.
Fundamental issues
SMEs or not. One needs to revise the strategy based on the prevailing market and economic conditions. It should at least cover fundamental issues such as market segment, client profile, value proposition, execution of sales, first client and the solutions, according to Mr. Gowda.
How focussed are these SMEs, when it comes to sales strategies? Are they more focussed on clients rather than expanding their businesses? Though most of them want to expand their businesses, some are constrained by finance or delivery or reach. Mr. Gowda says that it all depends on the aspirations and desires of founders. But in a healthy ecosystem of companies, there is a need for a mix of everything — income-substitute companies, serious entrepreneurs and the like.
These aspiration levels also enable these companies to grow bigger into conglomerates. Necessary investment in an effective sales and marketing team will enable the company to approach the market in a focussed way. But what stops them from growing into a bigger outfit is the ‘investment attitude’.
SHANTHI KANNAN
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