2019 Predictions: Death of an IT Salesman?

What’s wrong with the VAR model and how top sales people will drive change

In 1897 Mark Twain reportedly said, “the rumours of my death have been greatly exaggerated”. Today, there are certainly many commentators on social media platforms who like to preach a similar fate for salespeople.

It is they who I think are the snake-oil salesmen of today. Usually for their own pecuniary gain, they peddle the latest cure to avoid having to learn the art of professional salesmanship.

Yet, there is something rotten in the state of selling today. CRN’s annual IT VAR report shows average earnings falling for a second consecutive year to just 3.4%. This, for the biggest 100 companies, the 1%, the cream of the crop. If company margins continue to fall, the average tech salesperson is going to see their own take-home pay go into reverse. How can we avoid this happening?

Predicting the future can be an embarrassing exercise. Unlike Bill Gates, who in 2002 said “five years from now, the windows tablet will be the most popular form of PC”, I don’t have the resources or the time to make erudite predictions. I do believe however, that salespeople will continue to flourish for many years but only if they adapt to what’s happening around them.

Why are margins falling?

When I started my career in IT sales, customers learned about products from people like me. Knowing my stuff, coupled with a dose of emotional intelligence, would ensure success if I worked harder and faster than my competition. Simply making more calls would guarantee an increase in my salary.

But today, empowered customers approach suppliers armed with certainty about their own needs, what technology is available, and what they are willing to pay. Faced with this scenario, salespeople have little left to negotiate but price. Perfect knowledge and unlimited choice make odd bedfellows with profit margin.

In addition, companies are experiencing longer sales cycles, lower conversion rates and less reliable forecasts.

What’s the answer?

One of my favourite proverbs is “empty vessels make the most noise”. About 10 years ago, the inbound marketing movement promised to empower downtrodden IT marketing executives. For salespeople, it promised an end to telephone prospecting. Suddenly, the social media feeds and inboxes of IT buyers were drowning in content and yet, it’s made not the slightest difference in reversing the downward margin trend.

More traditional IT sales leaders looked to sales force automation as their silver bullet. Customer Relationship Management (CRM) would solve the problem but it simply became a tool for middle managers to monitor their sales teams. It didn’t fundamentally change the basic sales model of identifying the customer’s needs, sending a proposal and trying to close it before any of your competitors get a sniff. With the empowered customer, that model no longer works no matter how fast or efficiently you drive it.

Artificial Intelligence – friend or foe?

At a big tech conference last year, Marc Benioff of Salesforce was peddling Einstein, an AI infusion into his CRM platform. I’m not convinced. Here’s why?

The only way IT sales can cure its ills is to completely change the model. To earn more margin, you must give the customer greater insights; tell them something they don’t know. I call this “Disruptive Selling”. But how can you disrupt the thinking of the buyer?

I agree with Jeff Bezos who said, “there is no institution in the world that cannot be improved with machine learning”. In 2019, I predict we will see a move by IT salespeople not just to sell AI, but to use it to gain greater knowledge about their customers’ IT environments. Armed with this knowledge and bucketfuls of good judgement and creativity, disrupt the thought processes of customers, for mutual benefit.

That’s our mission at Predatar in 2019; to give our partner salespeople the tools to harvest greater insights and customer knowledge. The smart salespeople will grasp this opportunity with both hands, others will be like Napoleon Bonaparte when told about the new steam-powered ships.

“How, sir, would you make a ship sail against the wind and currents by lighting a bonfire under her deck? I pray you, excuse me, I have not the time to listen to such nonsense.”

The Predatar team would like to take this opportunity to wish every sales person in the IT channel a Happy Christmas and a very prosperous 2019.