Why productivity is the biggest issue holding tech sales back for Kiwi companies.
At Concentrate we love what we call “Technology tall poppies”, those inspiring entrepreneurs and companies that take the genius that is New Zealand technology to the world.
You couldn’t get much taller a poppy at the moment than Peter Beck of Rocket Lab, who changed the way space is used commercially with the launch of their Electron Rocket in late January from the Mahia Peninsula.
Rocket Lab – Electron flight ‘Still Testing’ launch, 21 January 2018
Rocket Lab may now be a US company, but that’s simply a reflection of how successful Beck and his team have been at attracting incredible commercial support for their technologically breath-taking venture. You don’t have the likes of Khosla Ventures and Lockheed Martin investing otherwise.
Back down on earth, how can the regular Kiwi tech company put their sales into the stratosphere this year?
A good place to start is the NZTE-sponsored Market Measures study, which benchmarks how New Zealand tech companies take their products to international markets.
The first point to note is that sales for Kiwi tech is not simply about throwing up something online and doing some clever promotion – 89% of tech firms are selling business to business, typically software, and have an average lead time of 5-6 months. This means sales people are absolutely key to converting interest into income.
How do we fare at this conversion? Pretty well according to the numbers, given average lead to customer conversion is 38%, significantly higher than average in US datasets from the likes of HubSpot and Capterra.
The flipside of this high conversion though is our low level of sales productivity. 40% of companies in the Market Measures study cited productivity as their biggest challenge in managing sales teams, followed by forecasting accuracy.
A picture emerges of a typical Kiwi tech company with highly capable sales people, but not generating sales efficiently enough. 46% of companies still had the founder as the primary generator of sales or involved in most sales.
Sales simply isn’t as systemised here as it is in the US. For example, the ramp time for new sales staff in New Zealand is on average 5.5 months, compared to 4.5 months for US tech companies. Our firms are also relatively low users of sales enablement technology (e.g. email automation, contact data intelligence), on average using 1.6 tools per team compared to 4 per team in the USA.
What are three ways you can put a rocket up your sales?
1. Lighten the sales person’s load
Generate more leads from indirect lead generation activity (e.g. digital marketing, direct marketing). Too often sales people are expected to do everything – locate, nurture, convert and negotiate. In the US 80% of leads are generated indirectly, in New Zealand it’s 40%, leaving a big load on poor old sales.
2. ‘Proceduralise’ the sales process
Our sales people are too good! Either founders or highly experienced people that can sell on the fly. You need to have a systemised approach that enables a less skilled and experienced person to sell your product. That means buyer personas and the buying process must be clearly understood.
3. Apply technology tools
We are tech companies, right? There are tools to help generate and nurture leads, but also to automate the sales process and make it more visible to everyone in your business.