Executive Summary

• Small vendors cannot follow the same strategy as large vendors.
• This article covers the differences.

Introduction

This article explains the distinctions between large and small vendor sales and marketing approaches.

Our References for This Article

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How Large Vendors Function

Large vendors follow along and high touch sales process. They normally participate in consulting companies that have established partnerships with the vendor and rig RFQs for the vendor to direct the prospect to implement the highest TCO software, which is profit-maximizing for the consulting company. What the consulting company recommends has nothing to do with what is good for the prospect. Large vendors and consulting companies can afford such lengthy and expensive sales processes because they make so much money from the account when they make a sale.

Using Account Control Tactics and Forcing In Poor Fitting Software

All the mega-vendors and the lesser-known but still very large vendors (like SAGE and Infor) use a broad product suite to control the IT spend of any company where they sell even a single product. This normally means increasingly marginal products are forced into the account based on some fallacious logic, such as the integration to the new marginal product will be eased.

Small vendors cannot play this game. First, the small vendor cannot obtain a recommendation from the major IT consulting firms because they are already spoken for. This is addressed in the Chapter: The Pitfalls of Partnering With Consulting Firms.

The Necessity of Lower Cost of Sales for Smaller Vendors

Small software vendors need a shorter sales cycle because they do not make enormous sums from a software sale. Small software vendors cannot afford to have a large number of highly paid salespeople (as the mega-vendors do) spend large amounts of “quality time” on each prospect. This is why a large vendor strategy (a surprising number of small vendors try to follow) will not work for a small vendor. For a smaller vendor, all they often see is impediments dropped into place by large vendors and consulting firms that block them from opportunities for which they would be an excellent fit. And it is true, and the game is rigged against small vendors.