Technology Buying Cycle Challenges Sales Momentum

 
 
By Nathan Eddy  |  Posted 2014-04-22 Email Print this article Print
 
 
 
 
 
 
 

After a merger or acquisition, there is a desire to get sales organizations integrated as quickly as possible, especially for publicly-traded companies.

Sales and marketing leaders from both companies in mergers and acquisitions (M&As) must proactively engage a broad constituency to capitalize on opportunities and prevent competitive disruption, but many struggle to do this in light of the new technology buying cycle, according to a report from IT research firm Gartner.

While the head of sales and the chief marketing officer (CMO) are critical to the due diligence process, they are, by design, further removed from the prospects and customers and cannot offer the perspective that comes from either the salespeople with direct relationships with customers and prospects or the product marketers that support those salespeople.

"The job of selling technology is already more complicated for a number of reasons. Provider salespeople, especially those selling more complex and/or higher-value solutions, already deal with the realities of the new technology buying cycle," Todd Berkowitz, research director at Gartner, said in a statement. "Adding the complication of an M&A event to this already disruptive buying cycle shift can make a difficult job even harder, especially if acquisitions are larger or are likely to force salespeople to go out of their comfort zones to be successful."

The report noted that after a merger or acquisition, there is a natural desire to get sales organizations integrated as quickly as possible, especially for publicly-traded companies.

While in theory, the faster the sales forces can sell each other's solutions, the more quickly revenue goals can be achieved, in reality, faster does not always mean better, and in some cases, the risks significantly outweigh the benefits.

To still keep the number of participants to a manageable level, providers need to expand beyond senior management. As due diligence processes and the transaction get closer to being announced, these top sales performers can assist with the initial rollout and communications strategy.

Gartner said it is important to identify the top performers from sales and marketing from both parties involved in the transaction, especially the ones who have been with their respective companies for a long period of time and those who have been through similar M&As, and give them at a seat at the table.

While the top sales performers are generally more capable of dealing with the change and uncertainty brought on by the changing buying cycle as well as the M&A event, they are the ones more likely to leave the company in the short term, the report noted.

"The changing buying cycle and necessary adjustments in selling successfully in this cycle is another reason to take this process slowly. Time is needed to ensure synchronization between the buying and selling cycles, and extra time is needed to do this properly when newly acquired solutions are added to the mix," Berkowitz continued. "Providers on the acquisition side of the transaction should spend time looking at the sales model of the company they acquired and determine if there are some elements worth adopting into their own sales process. A rushed sales integration makes it much more difficult to take advantage of this opportunity."

 
 
 
 
 
 
 
 
 
 
 
 
 

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