This is a guest post by Steve Martin, author and sales strategist, HeavyHitterWisdom.com
(Editor’s note: This article originally appeared on SandHill.com.)
If you are involved in selling enterprise software and technology, you already know the importance of understanding the inner workings of the various departments within the prospective customer’s company.
Your solution might be purchased by the IT department and used by accounting and human resources. It might be selected by engineering (with the IT department’s help) and used by manufacturing. Or it could be selected by finance and bought by IT. Almost every enterprise software purchase decision requires multiple departments to become involved. Therefore, it’s critical to map out the interrelationships of the departments within an organization.
Over the years, I have performed win-loss sales analysis studies for a wide variety of software and hardware technology companies ranging from startups to those with sales over $1 billion. To complete these studies, I conducted blind surveys of the senior IT executives, mid-level managers, and low-level technical evaluators who had selected or rejected the software from the company for which I was completing the study. While the purpose of these studies was to improve the sales force’s effectiveness, interesting patterns of IT organization behavior became apparent. These patterns supersede the standard hierarchical organization chart that salespeople and marketers have grown accustomed to studying.
Four models can be used to define the IT departmental interrelationships that will influence buying behavior: consolidators, consulters, responders, or bureaucrats. These four IT departmental types have different orientations toward the operation of their departments. Most importantly, they buy software/technology in different ways and for completely different purposes.
It is important to understand that any department can be any type of buyer. For example, the IT department may be a consolidator at one company and a consulter at the next. Sometimes, the type of department may be associated with a specific business goal. For example, the IT department may be a consolidator when driving a project to complete Sarbanes-Oxley compliance and a responder when asked to assemble information for a sales department–driven project.
Consolidators are IT departments that seek to increase their power, authority, or control within an organization. To grow their sphere of influence, consolidators launch grand initiatives; major companywide projects that affect the operations of other departments.
The planning and creation of a grand initiative is at the direction of the department’s executive leadership (CIO, CTO, and VP of IT). This type of project does not percolate up from lower-level personnel through the chain of command; it is driven down from the top and out to the rest of the company.
The figure below illustrates a consolidator’s flow of power. In this example, the vice president of IT has decided to drive an initiative to move all applications and programs off the company’s aging mainframe computers onto new, less expensive computer systems. After making this executive decision, he mandates that his direct managers fulfill his wishes. These direct reports assemble teams to plan the project and evaluate the vendors. IT liaisons (who report back to the IT department) gather information from the various departments, schedule vendor demonstrations with departmental power users, and serve as intermediaries between the various departments during project implementation.
The underlying motivation behind grand initiatives like this one is always power, whether it’s to gain more, consolidate it, or decrease that of other leaders and their departments within the organization. In the example above, the IT department is exercising its power over engineering and finance. Sometimes a grand initiative is an executive-level coup — an internal revolution intended to change the way the company operates. Many times, it is a well-orchestrated conspiracy in the guise of a logical business project. Other times, it is an act of revenge against an intercompany archenemy.
Consolidators are typically a software salesperson’s dream because they have the propensity to make things happen. “Big-bang consolidators” tend to buy all the software and services they need to complete a grand initiative all at once. “Cautious consolidators,” on the other hand, purchase the products and services they need piecemeal, taking one small step at a time in order to prove their project’s success.
Consulters are IT departments that take on the characteristics and attributes of a consultant to their organization. They seek to understand the problems of other departments and offer recommendations on how those problems can be solved using their services.
They proactively share their proprietary knowledge and departmental expertise or offer unsolicited advice to other departments in an attempt to show how they can improve efficiency. Therefore, they are continually polling the other departments, seeking opportunities to promote their services, and pushing out their ideas, philosophies, and opinions.
Consulters are more prevalent in massive multibillion-dollar companies (like the auto and insurance industries) than in smaller organizations. They are less powerful than consolidators and achieve their desired outcomes through finesse rather than brute force.
The figure below shows the information flow of a consulter IT department. In this example, the IT department is constantly polling the business units for their needs and pushing out information they believe is beneficial.
For example, an IT liaison (department intermediary) may seek out and meet with the vice president of sales, who expresses his dissatisfaction with the timeliness of the sales forecasting system. The liaison takes this information back to his department, and it traverses up the chain of command to where a decision is made to investigate new sales forecasting solutions. Conversely, a liaison may hear about an exciting new technology that aids manufacturing from the chief technology officer. The liaison schedules a meeting with the technology vendor to learn more information. He then sets meetings with “power users” in the manufacturing department to explain how the new technology may improve their operations.
Like a consultant hired on an hourly basis, consulters seek to continually validate their benefits and justify their existence to their customers. Selling to consulters differs from selling to consolidators because consulters enjoy the company of other consultants.
Responders are weak IT departments that operate under the direction of other departments. Whereas consolidators seek power and consulters seek to proliferate their services, responders are just trying to survive. Many times, IT responders are literally under attack from other departments that are unable to meet their objectives because of the IT department’s ineffectiveness. In some cases, the other departments have been disappointed by the past IT blunders. As a result, IT responders tend to be treated disrespectfully and suffer from a lack of departmental esteem.
The figure below illustrates the power flow of a responder. In this example, the IT department is the whipping boy of finance and engineering, constantly enduring those departments’ criticisms. Important power users within the finance organization complain to management that their needs aren’t being met. In turn, senior executives dictate their needs to midlevel managers, who relay the message to IT liaisons. In this instance, the IT liaisons’ main goal is to run interference on behalf of the IT department, sorting out the most important requests while trying to maintain a semblance of departmental decorum. For issues of extreme importance and urgency, senior executives of a business unit will call their counterparts in IT directly and tell them to get something done. The power is clearly on the business unit side.
When selling to a responder, you must sell to the business unit as well as IT, whereas with consulters and consolidators, your main sales effort should be directed inside the IT departments. For example, let’s assume a powerful accounting department at a company is complaining about escalating phone costs and your company provides phone bill audit software. You need to make both the business unit (accounting department) and the responder (IT department) aware of your services.
The final category of IT departmental buyer is bureaucrats, faceless departments whose most important priority is to maintain the status quo through rules, regulations, and delaying tactics. The features of a bureaucrat department are secretiveness, a response system that reflexively rebuffs demands made upon the department, and administrative centralization around the departmental leader, the arch-bureaucrat.
The structured environment, similar to a military command-and-control environment, stamps out innovative thinking within lower levels of the department and hinders the free flow of information from other departments. Instead, the bureaucratic monarchy considers other departments outsiders and issues edicts that must be complied with for fear of consequences.
The figure below illustrates the shield that bureaucratic buyers erect around their IT departments. In this example, the IT department dictates to the manufacturing department what products it will use (because of pre-exising standards). Meanwhile, the engineering department’s recommendation is rejected, even though it is in the best interest of the company.
Because IT executive leaders of consolidators, consulters, responders, and bureaucrats have different motivations, they have different perceptions of a product’s true value. The perceived value of a product depends on the psychological, political, operational, and strategic value it provides the executive decision makers. Every enterprise IT sale involves consolidators, consulters, responders, and bureaucrats. You must determine a project’s wellspring in order to know to whom and how to sell your solution. The essence of successful enterprise technology sales is understanding not only who to sell to, but how to craft a message that appeals to consolidators, consulters, responders, and bureaucrats.
This article originally appeared on SandHill.com.
Steve Martin is recognized as the foremost expert on “Sales Linguistics,” the study of how customers use language during the complex decision-making process. His latest book is titled Heavy Hitter Sales Psychology: How to Penetrate the C-Level Executive Suite and Convince Company Leaders to Buy. Steve is a regular contributor to the Harvard Business Review and teaches sales strategy at University of Southern California Marshall Business School MBA Program.