I get this comment all the time: “We’re looking for a VP-Sales/VP-Business Development/Sales Manager/Sales Rep with a strong Rolodex in the (pick your market segment) market”. Obviously I’m using “Rolodex” as a generic term in these days of CRM software. But how important is a strong Rolodex in the IT business, really? In my opinion, not as important as many people seem to think…..
I realize that this is a very contrarian viewpoint among those of us in the technology business. Some may even view it as “stupid” opinion! However, it’s not in any way a spontaneous comment, but an opinion I’ve developed over a long period of time. I’m sure I’ll get a lot of push back on topic, since it flies in the face of conventional wisdom. Here’s my argument:
What a Rolodex does for you in the technology business
First of all, of course a strong Rolodex in a specific market segment is obviously a good thing. To say otherwise is silly. But what does it really do for you and how important is it in being successful, relative to other factors? It may get a phone call returned or a meeting set up faster that it otherwise would. This is of course helpful, but far from critical in my mind, especially compared to other factors I’ll explore below. I should point out there are some market segments that are so closed that they appear almost tribal in nature. In those cases, including one example which is mentioned later in this article, a strong Rolodex can move to near the top of the list of critical success factors. But in my experience these situations are rare and far from normal.
Many other tech business value chain items must line up first
Let’s talk specifically about sales first, as that is an obvious place where people look for an existing Rolodex, as mentioned earlier. I’ve always maintained that sales reps get too much blame when they fail and too much credit (and often out-sized monetary rewards) when they’re successful. SO many things have to be done well upstream in a company, for a rep to have a chance. The executive managers must first capitalize the company adequately, or usually nothing works very well. Product Marketing/Management must properly define a market opportunity that matches well with the company’s intellectual property and technical capabilities. The R&D folks must build/code a product which makes a real contribution to the marketplace, offering a differential advantage over competitive offerings.
Maybe all of this seems obvious; but none of it is easy. A lot can go wrong, and I believe every one of these activities is more difficult and important than having a pre-existing Rolodex in a market segment. Even it this wasn’t true, it’s really difficult to attract the right sales reps (with or without an strong Rolodex in your segment) without evidence that the above referenced activities are done well.
Most important attributes for a technology sales rep
Smart – This may seem obvious. But all too often people looking for a “quick hit” underrate it’s importance, or don’t adequately investigate intellect in their new sales hires.
Technology acumen – There are many good sales reps in the world. But regardless of whether we’re talking about hardware, semiconductors, traditional software or SaaS, there are far fewer that have the education, training and ability to quickly absorb complex and fast-moving technology that is fundamental to our business.
Work ethic – While intellect and technical competence are important, selling still isn’t brain surgery. But it’s a really difficult job that takes persistence, hard work and the self-confidence to keep going in the face of a lot of rejection. There is no substitute for a strong work ethic in a consistently high performing sales rep.
Ability to read people & build relationships – this is key- and shouldn’t be confused with having a large Rolodex of names and phone numbers. Just because someone knows a lot of people doesn’t mean those prospects necessarily wants to hear from them, or trusts them enough to buy from them. In many cases it’s just the opposite. And it’s VERY hard without extreme due diligence in the hiring process to ascertain just how good those Rolodex relationships really are. Also, the old “bull in a china shop” caricature of a rep who aggressively charges forward, regardless of cues from the prospect, usually doesn’t work very well in the technology business. Contrary to popular belief. the ability to build strong relationships counts at least as much and usually far more than aggressiveness in sales effectiveness. If you have strong relationship-building skills, you can do it over and over again across any market segment. Give me a strong relationship-builder with no existing contacts in ANY particular market segment, over a weaker relationship-builder who knows everyone in that segment–any day of the week.
Market segment experience and Rolodex – these are beneficial qualities, there is on doubt. But I believe they are down this list in importance relative to those attributes listed above.
An example of where your technology Rolodex IS CRITICAL
Now just because I don’t think a strong Rolodex generally leads the list of important attributes in software or hardware sales, that doesn’t mean I feel that way in every aspect of the technology business. The best example of when it’s VERY important is when raising capital from institutional sources, such as venture capitalists. Not only is it important to personally know them (or get an introduction from someone who knows them well) before a fund-raising approach, it’s critical to a bizarre degree. It’s not absolutely universal, but if you approach many (if not most) VCs without leveraging an existing relationship they have, you may in fact have blown any chance with them in the future – no matter how impressive the value proposition of your business. So this is a case where having a strong network and Rolodex in place is paramount–but the details of this is better left for another article.
That’s what I think about the importance of a Rolodex in the technology marketplace. I’ve personally moved among many different market segments in my career and don’t consider it all that difficult. The most difficult part is often convincing someone it isn’t all that difficult! Don’t get me wrong – business is ALWAYS Hard – this just isn’t one of the harder parts if you know what you’re doing. While it can be helpful to have a strong Rolodex, I believe it is placed way too high in many folk’s priorities. If you disagree–post a comment below and tell us why, or just provide us with the wisdom of your own Rolodex-related experiences.
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Marc Friedmann says
Interesting topic, Phil. I wonder if “Rolodex” is sometimes confused with domain or market knowledge. In hiring sales/biz dev people I do believe knowledge of the industry and customers and the way the customer thinks in a particular market is key to successful selling. Having networks and relationships always seems to help accelerate finding and closing deals.