HR Tech Economies of Scale…or Fail: Sales

HR Tech Economies of Scale…or Fail: Sales

The 2015 exploration of HR Tech world domination travels on, and today we’re looking at domination via sales. As a company grows, one would assume that it’s doing an exponentially better job of attracting new business. Let’s specifically look at how that breaks down in the HR Technology software market. In my last post, I introduced the concept of how an HR Tech software vendor can either achieve economies of scale, or fail, depending on how they respond to growth. We honed in on the product itself, and talked about, as a couple of examples, how the product can be enhanced through R&D if prioritized properly, or how it can become a Frankenstein if it grows by acquisition. Today, as a proper lead up to the HR Technology Conference starting in Vegas this weekend, let’s talk about how a size of a software vendor impacts the sales process. After all, anyone passing through the expo hall (oh, if you do, stop by and say hi at booth #819), will see little booths and big booth, teams of 5 sales representatives (including company executives) and teams of 25.

Again, I’m going to make this visual. Some of the concepts below were covered in the second article in the TechTarget series I co-authored on the 7 Keys to Buying HR Software (link takes you to the 7th article on Support, from which you can backtrack to the second on Sales).

Scale Versus Fail - Sales

Again, this can be looked at vendor by vendor. We could get very specific; some would come out smelling like roses, and others just plain smelling. Feel free to comment below, swing by our booth (again, 819) at the HR Technology Conference in Vegas, or attend my talk about world domination via recruiting technology at the HR Tech Congress in Paris later this month.

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ABOUT JEREMY AND HIVE TECH HR

Jeremy Ames Hive Tech HR CEOJeremy enjoys finding driving forward the future of the HCM space. He is CEO of Hive Tech HR, which helps its clients find and implement HR technology.

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1 Comment


  • 1. Comment on tenure of Sales reps:
    On Sales organizations, from what I have seen, expertise and tenure of the sales rep is less based on size of the vendor than the market segment covered. Take ADP for example. In their Small Business Services (SBS) business, it’s a starting point for a sales career. They take in people out of college, newer in their career, and either they perform and move up or move out. More tenure, experienced sales people move into mid-market and large enterprise sales.

    Another difference is the operating efficiency of the vendor. ADP is a body shop and has deep pockets. It results in less qualification of deals ,participating in ever deal possible even if your solution many not be a great fit and lower win rates overall for their Sales organization.

    On the other extreme, you have a company like Ultimate Software that runs lean and mean. It highly qualifies deals it participates in, disqualifying many deals and only have their sales reps spend time on deals they think they can win, and have much higher win rates than ADP. A smaller sales organization means you need to run more efficiently. A good metric to measure vendor efficiency is their total revenue per number of sales reps, or revenue per capita. (You see a similar comparison in investment banking when looking for example at a large organization like Morgan Stanley versus the leaner and meaner Goldman Sachs.)

    2. Comment on Customer references versus satisfied customers I told agree with how the importance of both is important. First, more and more buyers are doing self-referencing, meaning they rely less on vendor-provided references and are researching themselves with SHRM and LinkedIn groups, colleagues and review site. This is where they run into existing or past customers.

    At HR Tech, you could see many mid-market vendors who have been around for years with older technology, but thrived due to the strong customer relationships and satisfaction they have developed.

    3. Comment on other Sale\Fail attributes:
    * Leaving FUD. A Sales rep leaving FUD of negative comments about other vendors = FAIL. This is often looked down upon and as unprofessional by buyers.
    * Responsiveness. Sales representatives being responsive to buyer questions is critical = SALE. Getting the correct answers and getting back to buyer’s in a timely way. A sales process is the company putting their best foot forward. If a vendor cannot be responsive during a sales process, imagine how they will be when you’re a client needing support.
    * Transparency. Sales reps need to say what they provide and more importantly admit to what they cannot. Truthful answers to what you can and cannot provide to the buyer goes a long way in developing trust. Buyers = SALE. Buyers will often overlook capabilities they cannot get and still purchase, compared to a buyer who doesn’t believe a vendor can deliver on what it is proposing.
    * Tailoring to buyer’s need. In a sales reps RFP or proposal, presentation and demo, customizing to the buyer’s business issues and functional needs is key = SALE. Canned anything does not work. Differentiation comes from a vendor understanding the buyer’s needs and best matching what they offer to address those needs.

    Hope this additional insight is helpful.

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