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| Working with Microsoft's Field Sales Teams |
| Apr. 23, 2007 |
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Field sales teams around the world serve as the public face of Microsoft and can be an important help or hindrance to the company's partners and customers using Microsoft solutions. Partners and customers can better leverage the company's substantial marketing, sales, and technical resources if they understand what makes the Microsoft field tick and how it fits into the company's overall organization. The Field Organization Matrix The field sales organization plays a significant role in gathering intelligence, developing partners, working directly with large customers and vertical industries, meeting specific competitive threats, ensuring that customers choose Microsoft products, and engaging partners in the sales efforts. The Redmond, WA, headquarters, in contrast, focuses on sales campaigns, operations, and strategies. Field staff are organized in a complex matrix that reflects several dimensions of the company, including its presence in many geographic regions, the wide breath of customers and industries, and the company's large list of products. The customer-facing organizations of greatest interest to most midmarket and larger customers, and to the partners who serve them, are the following:
In general, EPG personnel are directly engaged with one or more large customers or partners, while the SMS&P organization works through partners and telesales. (For a view of how Microsoft segments its customers, see the chart "Microsoft's Customer Taxonomy".) Field Roles All sales personnel have sales as their ultimate goal, but they can be placed into two general categories: general sales roles and technical roles that provide technical or industry expertise for field personnel, partners, and customers. Sales Roles While their actual titles may vary from country to country, the following roles are common in sales roles in the United States and are duplicated in most regions.
Technical Roles Most Microsoft customers and partners require presales technical support at some point, such as training, designing an overall hardware and software solution, identifying the technical advantages of a Microsoft solution, or determining how much hardware and software a customer will require. Several customer- and partner-facing roles, such as the following, supply such technical skills:
Team Units Microsoft's field sales force is often deployed in team units, which include people in various roles who serve groups of accounts or particular industries, or which provide deeper technical skills that other units can call on. Account Team Units. Account managers generally work in Account Team Units (ATUs), which serve a set of named customers. A "geographic" ATU will serve enterprise customers in a particular area, while an "industry-aligned" ATU focuses on enterprise customers within a particular industry. Pure ATUs are commonly found in areas with a high concentration of customers in a particular industry, such as a manufacturing-oriented ATU near Detroit's auto industry or a financial services ATU in New York. An ATU includes several account managers, plus partner, solution, and technical specialists who assist in qualifying and closing sales. An ATU also includes support services specialists, such as Enterprise Strategy Consultants, Technical Account Managers, and Services Sales Executives. Partner Team Units. Partner Team Units focus on driving sales through partners by identifying and cultivating new partners, helping partners fill their sales pipelines, ensuring that partners get training and other resources, and assisting partners in closing sales. Note that although EPG manages some partners nationally, Partner Team Units spend much of their time with Gold Certified and Certified Partners in their regions. Specialist Team Units. A Microsoft region or district may have a Specialist Team Unit that includes technology specialists who can be called on by any ATU that feels it needs deeper technical expertise than it has on staff. Industry Team Units. The field sales force includes about 110 Industry Solution Sales Professionals assigned to Industry Team Units. These units have both a central role and a field role: centrally, they help Microsoft determine how it will address their industry, while in the field they assist ATUs that sell to customers in their industry. SMS&P teams. The SMS&P organization does not have teams focused on specific accounts, but concentrates more on following up midmarket sales leads generated by marketing programs and events, as well as opportunities identified through telesales and other approaches. Most SMS&P sales efforts involve a Microsoft partner, who will develop a specific sales proposal and close the deal, calling on other Microsoft sales and technical resources as needed. Because of its partner focus, SMS&P team units may have technical specialists with a clear partner orientation, such as a Server Partner Technical Specialist who assists partners with Microsoft server solutions. In terms of direct sales contacts, midmarket customers are generally served by telesales staff, while smaller customers are mostly likely to be contacted by direct mail or a Microsoft partner. CompHot. Another part of the Microsoft sales support organization is the Competitive Hotline (CompHot for short), which is called in when Microsoft faces competition for an important customer account. CompHot staff specialize in particular Microsoft competitors, such as Google or Oracle, and can bring intimate knowledge of the competitor's strengths and weaknesses, as well as Microsoft's competitive strengths, to sway a customer's decision in Microsoft's favor. (Microsoft Gold Certified Partners can access CompHot resources through presales support from Microsoft.) Sales Incentives Understanding how Microsoft's field sales staff members are compensated can help customers and partners identify field staff who are most likely to have something at stake in the customer or partner's success. As in most companies, Microsoft's field sales staff must meet sales quotas in order to receive bonuses and other incentives. However, the actual quotas vary by role and product. Sales quotas tend to make up a fairly small portion of total compensation for technical staff (about 10% to 15%) while they account for up to 40% of total compensation for sales generalists. Sales quotas are affected not only by the total revenue that sales staff generate but also by the products that they sell. Microsoft divides its products into the following three Product Groups (PGs):
For 2007, revenue from PG1 generally counts for about 25% of an account manager's quota, while PG2 accounts for 50%, and PG3 for 25%. However, technical and solution specialist quotas are more closely tied to a specific product group. For example, a business intelligence solutions specialist may get credit only for sales of PG3 products, such as SQL Server and BizTalk, while 100% of a collaboration or SharePoint specialist's quota comes from PG2. Working with the Field Customers and partners who understand the incentives and expertise of the field can make more effective use of Microsoft's resources to solve problems. Customer Strategies How much time Microsoft will spend on a customer depends on a variety of factors, including the customer's size, industry, and strategic importance. Customers will likely get the most help from Microsoft if they can reach the person who has the most to gain from the sale. For example, a customer investigating an Exchange upgrade may get more help from an Exchange technical specialist, whose compensation depends heavily on increasing Exchange revenues, than from a generalist for whom Exchange sales are less important. Customers who help Microsoft promote new or competitive products may also get extra financial and technical assistance, in exchange for testimonials and case studies that position the customer as a technology-savvy business and Microsoft as their preferred technology provider. For example, Technology Adoption Programs are typically offered to only a few dozen customers, and give Microsoft early insight into a particular product's progress in early betas. Participating customers may get steeply discounted licenses for the final product, and their IT staff benefit from privileged access to Microsoft consulting and product teams. Such engagements have risks: a company could find some of its best IT staff struggling with an experimental project that drags out as new problems crop up. On the other hand, the customer could also leapfrog the competition with a significant operational or cost advantage because it is the first to employ a significant new technology. Partner Strategies Like end customers, the amount of direct attention that partners get depends on their size and their strategic importance. Global and multinational partners are generally managed by dedicated EPG teams; as the partner's size decreases or their geographic focus narrows, they are more likely to be managed by a regional PAM or even by a telephone-based PAM who has many partners to look after. Microsoft Registered Partners, who reside at the bottom of the company's partner pyramid, are serviced primarily by e-mail newsletters and direct mail. Smaller partners can improve their visibility to Microsoft by becoming members of the Microsoft Partner Program and by meeting the requirements of the Certified or Gold Certified levels of the program. The higher the level they reach, the more resources and attention they're likely to get from Microsoft. Higher-level partners are also more likely to be invited to participate in customer campaigns and go-to-market campaigns, in which Microsoft positions partners as industry leaders and as points of contact for prospective customers. At minimum, reaching the Certified or Gold Certified Partner levels of the partner program makes a partner a "managed" partner, entitled to at least a part-time PAM who can help the partner navigate Microsoft's hierarchy, open doors to technical and marketing resources, participate in joint sales calls, and send partners sales leads. Partners should make sure that their PAMs are familiar with the sales of Microsoft products that the partner drives: a partner manager will work harder to ensure the success of a partner who makes a positive contribution to Microsoft's business—and the PAM's quotas. In some cases, partners can work with multiple partner managers, including partner managers for specific accounts, for specific vertical industries, and for specific Microsoft products or solutions, to increase their exposure to Microsoft. Managed partners should make sure to create a Partner Business Plan (PBP) and one or more Partner Solutions Plans (PSP) with Microsoft. The PBP is a general business plan that partners create with Microsoft each year. Among other elements, it includes "Conditions of Satisfaction" determined by the partner. A PSP describes a specific partner solution offering that Microsoft and the partner will offer, and it includes marketing and sales commitments from both the parties. Limitations of Microsoft's Field Organization Customers and partners also need to understand the limitations of Microsoft's field organization in order to set reasonable expectations. Several issues commonly confront organizations that want to work with Microsoft, including variations among teams and regions, individuals who may be less helpful than the organization would like, and gaps in Microsoft's data about what partners and customers do. Regional Variations As with many organizations run by human beings, Microsoft's field presence can vary significantly from office to office, or region to region. Some teams interpret rules, such as licensing rules, differently than others; some are eager to work with an ISV's products, while others may rarely or never promote them. The problem becomes more acute for larger organizations that have their own local offices—differences in treatment can complicate the rollout of a new partner product if, for example, a marketing program that includes Microsoft in one locale doesn't get its backing in another. One axiom of experienced partners is that "once you've learned how to work with one Microsoft district, you've learned how to work with one Microsoft district": in other words, developing a broad relationship with Microsoft may require employing a variety of strategies adapted to the different incentives or situations that motivate Microsoft's staff in different geographic regions or parts of the country. Personal Variations Similarly, an organization that commonly deals with Microsoft staff in a particular role may find that a change in personnel results in a significant change in the relationship. Some partners find their PAMs to be endlessly helpful, others less so. One tactic that can help is to use a PAM to gain access to technical specialists whose expertise lines up with the partner's business. Technical specialists sometimes have longer tenure in a region than PAMs (whose job is relatively low on the corporate totem pole and often regarded as a stepping stone to greater responsibility) and a technical specialist often has better access to technical decision-makers in customer accounts. A technical specialist who is "on side" for a partner can be as useful as a sales generalist in promoting the partner's solutions or services to customers. In addition, partners need to ensure that Microsoft knows what they do. While the company keeps profiles on most of its partners, those profiles may not be accurate or may be too general. Telling Microsoft that "we can do anything" is not a good idea: the company recommends that partners focus on one or two key specialties so that partner managers and other Microsoft field personnel are more likely to associate the partner with specific customer opportunities that arise. That's what PBPs and PSPs are for, but many partners are lax in completing them. Gaps in Data While Microsoft bases its relationship with partners partly on the basis of the revenue that they generate for the company, the company's own records often fail to record partner involvement in sales. The company is just beginning to record partner involvement in some of its largest volume licensing programs, for example, and even enterprise partners responsible for multimillion-dollar sales have found that Microsoft's records don't always credit their involvement. As a result, partners need to use their partner managers or other local sales executives to inform Microsoft of major engagements that they complete, how much Microsoft revenue they generate, and which products were sold. Enterprise vs. Midmarket Like many large IT vendors, Microsoft has defined the markets for its products as a hierarchy of large, midsize, and small customers, which allows it to deploy its resources efficiently. However, that segmentation may not reflect the way customers or partners see themselves, and partners may see a mismatch between their priorities and Microsoft's. Some larger partners have less strict boundaries between large customers and small ones. A small partner might have a product or provide services that appeal primarily to enterprise customers. These partners sometimes complain about being left out of sales opportunities in enterprise accounts because they don't fit Microsoft's profile of an enterprise partner. In those circumstances, close ties with a PAM and technical sales specialists may help a partner break through barriers that Microsoft's segmentation imposes on them. Resources Field offices for various regions and districts can be found at www.microsoft.com/worldwide. The enterprise sales organization and account teams are described in "Enterprise Group Tightens Customer Relationships" on page 31 of the Nov. 2005 Update. The Microsoft Partner Program is described in detail in the Aug. 2006 Research Report, "2006 Guide to Microsoft Programs for Partners." Partner recognition for volume license sales is described in "Partner Influence on Sales Gets Recognized" on page 31 of the Apr. 2007 Update. |
