Yes, the days of Mad Men-style sales meetings are likely over for software sales according to Peter Burrows. Cloud app buyers are no longer subjected to the 1-2 punch of a field sales rep and a demo-happy sales engineer as frequently as they were in the past. Today, anyone can research, compare, procure, and launch an app in a matter of minutes. There are a range of attractive choices for app buyers nowadays. This shift in how cloud software is purchased truly empowers the buyers and has forced vendors to retool their sales strategy and operations. Now, companies are investing heavily in inside sales teams rather than expend costly resources on the traditional road warrior approach.
While companies scramble to adapt to how businesses are buying cloud apps, they would be wise to pay particular attention to how their app will work with the existing apps in the customer’s environment. Think about it: a point-of-sale app needs to integrate with a user’s accounting app to make sure orders come in; CRM apps need to sync with marketing automation apps to get leads to the sales team; and timesheet apps have to closely work with software focused on expense management and HR.
Growing sales for cloud software, therefore, is not necessarily constrained by the size of an inside sales team; rather sales are increasingly determined by whether a vendor’s app will integrate seamlessly with a customer’s existing systems. This requirement to integrate with a large number of third party apps is perhaps the most significant obstacle to sales and the biggest challenge facing app vendors today. The challenges are threefold:
- Faster App Development: There are hundreds of cloud apps for any business function, market, and geography. New apps enter the marketplace everyday and they can be updated with the latest features instantaneously from the cloud. To build your own app and ensure integration with this large and growing number of apps, makes native integration with most of these apps untenable.
- Idiosyncratic Use Cases: Perhaps one of the biggest benefits cloud apps provide end users is customizability. Buyers can procure an app and customize how it looks, works, and works within the business to their individualized needs. These features, however, pose another challenge: fixed integrations with third party apps created by app vendors cannot keep pace with the idiosyncratic use of end users. Many vendors nowadays provide free trials of their products for a set amount of time. If your app doesn’t work with a buyer’s other apps in the way they want it to, they will likely move on to trying the next app.
- Resource Requirements: Cloud app vendors are expert in their domain: accounting, marketing, HR, CRM, and others. They are not experts in integration technology. It takes extraordinary effort to build solid integrations between apps that work for majority of customers, given the seemingly infinite number of integration combinations that would need to be programmed or developed. By doing so, vendors trap themselves into a vicious cycle of investing resources to handle specific integrations taking away focus and precious resources from their core app threatening growth and viability.
To effectively compete, vendors must work with their product teams and outside partners to leverage integration as a go-to-market strategy. First, vendors should make sure they integrate with other apps to support logical cross app workflows like order-to-invoice-to-cash, procure-to-pay, employee on-boarding etc. Expensify, for example, integrates with Xero to make expense management seamless with accounting software. Customers need a set of apps to work together as a solution. rather than a one-off product. Secondly, vendors should strike partnerships with app partners that they have integrations with. This enables mutual leads for each other’s apps. Finally, vendors should leverage app marketplaces to drive leads. Venues like AppExchange and Apps.com give sales teams the ability to drive leads and provide a credential of integrating with other apps.
Adapting to the new cloud sales model requires vendors to evolve. Building new sales operations like an inside sales team is important but making sure an app works great with a customer’s existing apps could make or break deals with customers.