Tech Firms Investing More in Selling Services and Solutions, According to New ITSMA Sales Performance Study

Newest ITSMA study shows that technology and IT services firms are putting greater emphasis on sales tools, training, and compensation plans to increase revenue in services and solutions.

LEXINGTON, Mass.—February 19, 2004—Technology firms have become much smarter about selling services and solutions during the past year, according to a study released today by ITSMA, the leading organization for services marketing professionals in the technology industry. ITSMA's report, Turning the Corner: Selling Technology Services in a Recovering Market, demonstrates that firms across the industry are investing in more sophisticated tools, improved account management, increased services sales training, and more effective compensation and incentive schemes to support selling services and solutions.

“Selling technology services and solutions in today's market requires very particular skills, tools, and incentives," said Julie Schwartz, senior vice president and chief research officer at ITSMA and author of the report. “Technology firms have traditionally under-invested in services-specific sales support but our new report suggests that marketing and sales leaders have realized more investments are needed to sustain growth in services and solutions.”

The ITSMA report highlights numerous examples of increased investments in selling services, including:

• More companies are using and developing tools to help sales teams design custom solutions, generate solutions proposals, provide cost-benefit analyses, and analyze return on investment.

• More companies are providing incentives for team selling, selling integrated solutions that cut across organizational boundaries, and selling solutions with partners.

• Almost three-quarters of the companies in the study report having globally consistent processes for account management—a substantial increase from several years ago.

• Companies are reinvesting in sales training while also searching for the most effective training mix to support evolving needs for skills and knowledge. Sales training expenditures for 2003 were almost back to pre-crash levels.

About the Study
Turning the Corner: Selling Technology Services in a Recovering Market provides in-depth data and analysis of how companies across the technology, software, networking, and professional services industries are managing and measuring services sales for 2004 and beyond. Based on qualitative and quantitative data from 34 companies, the report helps companies benchmark their services sales performance in eight major areas:

• Sales coverage models: sales channels, revenue by channel, and sales force size and turnover
• Sales force productivity: sales yield, management ratios, and time utilization
• Sales performance: contract penetration rates, attach rates, customer retention, win rates, recurring revenue, repeat versus new business, and sales lead conversion rates
• Sales costs and compensation: total costs, sales cost allocations, and compensation
• Sales training: training investment, sales skills, and adequacy of training
• Sales support: processes, tools, and automation
• Account management: processes and metrics
• Discount practices: authority to discount, discount levels, and gross margins.

The report provides data, analysis, and best practices in each area.

Study Participants
Companies participating in the study included Agilent, AMS, Avaya, Cisco Systems; BearingPoint, Brooks Automation, CH2M Hill, CSC, Diebold, Eastman Kodak, Ericsson, First Consulting Group, Fujitsu Consulting, GE Fanuc, Hewlett-Packard, Hitachi Consulting, IBM Global Services, Juniper Networks, Lucent, NCR, NEC Business Network Solutions, Network Appliance, NextiraOne, Nokia Internet Communications, PeopleSoft, Progress Software, Rainmaker Systems, Reynolds & Reynolds, Rockwell Automation, Software AG, Spherion, Sybase, Vanguard Managed Solutions, and Vertex.

For more information on this study, please visit http://www.itsma.com/research/abstracts/s004.htm.

About ITSMA
ITSMA specializes in helping companies market and sell services and solutions more effectively. As a membership organization, we work with the world's leading technology, communications, and professional services providers to generate increased demand, strengthen customer relationships, and improve brand differentiation. ITSMA members include business leaders such as Accenture, BT, Cisco, Hewlett-Packard, IBM, Microsoft, SAP, and Tata Consultancy Services, among others. Our comprehensive research, consulting, and training on topics including ITSMA Account-Based Marketing ^SM, Brand Positioning, and Solutions Development provide the insight and experience companies need to improve business results. ITSMA is based near Boston, and has offices in London and Tokyo. Learn more at www.itsma.com.