The economy has perhaps never been in such a state of turmoil - in individual countries and across the globe. For IT vendors, this is wiping out a significant percentage off their expected sales and profit margins and leading to a number of layoffs across vendors of all shapes and sizes. However, like any structural change in the economy, there are winners and there are losers. The key skill is to find the winners and place strategic bets with limited sales resources such that the sun can still keep shining through the Covid-19 storm and the business comes through the chaos of 2020.
We notice that our clients are still closing business - but that business is in specific sectors where the downturn hasn't hit yet, or where it has seemingly weathered the storm. For example, industries such as travel and tourism and bricks and mortar retailers are in dire straits but pharmaceutical and Government spending on IT has continued to grow. Despite this restructuring of potential opportunity, a number of IT vendors have not changed their go-to-market strategy and have sales teams still investing time in the same places as they were in 2019. This is clearly a miscalculation as no matter how strong your sales leaders are in patches with declining or collapsing customer spend, they will not be able to deliver the numbers that would have been expected in 2019 and previous years.
Viewpoint Analysis is recommending that IT vendors look to quickly review all sales patches globally and to take action to reflect the new reality so as to place important resources in areas that are still likely to spend and where they can gain better traction. We expect this change will potentially create significant value and ensure that where industries are spending, they can capture that precious revenue whilst balancing investment decisions in other areas. This change does not necessarily necessitate a reduction in sales headcount, rather we believe that headcount should be maintained and more focused with fewer accounts where revenue is most likely to flow.
Post Covid-19 (2020 and beyond) is not business as usual. Sales will not be business as usual and we believe that sales structures and go-to-market options (online, marketing, demand generation, field sales et al) will need to be carefully considered to gain an unfair advantage in this new challenge.