The curse of the BDM

I’ve seen the curse at work in the past...

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To: [email protected]

From: [email protected]

Dear all

I would like to welcome John Smith to the IT Corp team in his role as Business Development Manager for Widget Solutions.

As we all know, Widget Solutions are a key part of IT-Corp’s strategy. They form the cornerstone of our long term plan to move away from only selling Boxes upon which customers build the widgets that bring them tangible business value.

Whilst we at IT Corp have excelled at selling Boxes for many years, we see a major opportunity by branching into the widget business - we secure the entire solutions stack, become more relevant to our customers, have the opportunity to sell services and lock out our competition.

John has several years’ experience in the region selling Widgets, starting out with Widget Corp as a pre-sales engineer before moving into sales. Several of our larger customers use IT Corp Boxes to deploy Widget based solutions that John was directly involved in selling, so he has actually indirectly been developing our business already. He brings a wealth of experience as well as customer contacts at far more senior levels with our key customers than our current sales team have.

Here’s how I see John’s next twelve months panning out.

First of all, I’m going to label John as being ‘overlay sales’, to give the impression that he is an extra burden on our field sales office, directly contributing to the higher sales targets we face and somehow holding us back from reaching them. That way, the reps at the coal face are bound to welcome him with open arms.

As we are all aware, Widget sales typically take nine to twelve months, involve several of our product lines and, to make things more difficult, the sales reps for these product lines aren't incentivised to work together. Because of this situation, I haven’t based his commission for his first three quarters on pipeline growth and partner development, but on revenue. Equally, we will continue to goal our sales teams in a way that doesn’t actually fit with what we are trying to achieve with our Widget strategy. Naturally, after three months, I will be expressing disappointment with John for not having delivered any revenue.

I’ve asked the more co-operative account managers to hand John the accounts they don’t really have time to work on, so that they treat him as a junior sales rep expected to handle the entire sale for them, as opposed to the widget expert they can use to grow their own influence and revenues in the accounts where they currently do well.

Less co-operative account managers will be expected to fob John off for several weeks, cancelling meeting requests at the last minute, messing him around and generally keeping him out of ’their' accounts They will see him, for some unknown reason, as a threat to their importance, rather than as a valued team member who can help them hit their number. 

John will have no pre-sales technical help as he is supposed to know absolutely everything, from how to pitch Widgets to a CIO, down to installing and configuring obscure features for PoCs.

After six to nine months, despite the odds, John will have built up some pipeline and actually brought some deals to the point of closure. At this point, rather than expecting the account managers to deal with procurement and the other nuts and bolts of getting the PO placed, I will be questioning John as to why he isn’t doing this. In parallel, whilst he does focus on closing these smaller deals in time for the end of the quarter, I’ll be wondering why more strategic pipeline development isn’t taking place.

As none of our partners are currently particularly strong when it comes to Widget solutions and as Widget solutions are a key part of our strategy, our partner conference in a few months’ time will be the perfect opportunity for John to showcase his expertise and provide some critical guidance for the channel. For this reason his slot will be at the end of the day, just after a session on back-up software (which will overrun) and right before the free bar opens. 

After three quarters of conflicting pressure, zero commission and lots of frustration, I’ll be expecting John to be wondering why on earth he joined us.

At the end of four quarters with us, I’ll express surprise when John hands in his resignation, but once he’s left, we’ll start to see some Widget orders close from the pipeline he’s built up, leaving us all to conclude that if deals close when he’s not there, there was probably not much point in having him in the first place. We will, however, hire a replacement BDM from within the team who will have a much easier time of things thanks to the results appearing from John’s apparently fruitless twelve months with us.

John is newly married to a wife he won’t see much in the near future due to work commitments and who, in nine months’ time, will give him the ultimatum that it’s either her or IT Corp. This will be the final straw that leads him to dust off that CV and move on to pastures new.

Please join me in welcoming John to the team.

Regards

Regional Sales Manager

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Rings any bells?

Avoiding the ‘curse of the BDM’ is a tough one to avoid. The example above refers to all of the worst things that can happen, but sadly isn’t that much of an exaggeration based on what I’ve seen in the past.

In terms of fitting in quickly and hitting the ground running, the most successful BDMs I’ve seen were typically already part of the same sales organisation, often making their first moves from a pre-sales/systems engineer role into more of a sales role. This meant they were known and trusted by the existing sales reps, posed no apparent challenge to the Charlie Big Potatoes[1] of the team and were on top of their subject from the start.

Get the commission structure right or see everything fall apart. BDMs will usually be developing some kind of solution that involves multiple products across the organisation. Unless people are paid to collaborate, it all falls apart.

If you don’t have ‘double bubble’[2] commissions on a deal, you’ll likely get nowhere. I experienced the collapse of my business in a previous jobs when a compensation change was made. In the past, the account managers had been paid on my product (thin client devices) as well as the servers and storage that sat behind them, whilst I was goaled only on the devices themselves. We had all been doing well - typically the customers buying this solution were buying our datacenter hardware for the first time to power these devices. New customers, selling to new teams within existing customers, delivering a real solution, becoming more strategic, etc, etc. All the boxes were ticked and life was good. I look back on this period as being one of the most enjoyable of my working life so far.

Then the account managers stopped getting recognition for thin clients and were only paid on the servers and storage. The average deal size was half or three quarters what it was before and most of the guys just couldn’t afford to invest the time - the deals were still ticking all the strategic boxes, but for the individual reps at least, the returns weren’t worth the effort. This effectively turned me from being a BDM/product sales manager into an account manager myself as I had to drive the individual deals almost entirely on my own. This wasn’t logistically possible when being the only person covering the Middle East and Africa - the simple commission change was what ultimately killed the product line couple of years later, in my opinion. Years of real success and growth went out of the window.

Another personal experience at another vendor was being in the wrong division. Selling a desktop device that drove server and storage sales was fine, but those sales reps and their managers had little time or interest in what I was supposed to be doing. Being part of the division that made its money selling laptops and PCs meant it was impossible to do anything either. Expecting an account rep to suggest to their customers that they buy a $200 thin client instead of a $1,200 laptop was unrealistic form the outset. Sure, if the customers asked for a thin client, the reps were ready to oblige, but for obvious reasons this wasn’t a product they particularly cared about, regardless of its bigger implications for the company and customers as a whole.

I’ve also seen people struggle when joining a vendor from the customer side to be a BDM for a vertical - in telco or financial services for example. You may have someone who knows their industry inside out, but unless sales management pay a lot of attention at the beginning to get the BDM and the account reps together to work out who will do what, the new BDM is likely to flounder in their new world of IT sales. Perhaps heads will need to be bashed together or perhaps people will need to be mentored through proper account planning and role definition, but having a customer join the Dark Side of IT sales and expecting them to deliver miracles will typically be unrealistic.

If I were hiring I’d pick the characteristics of the people I’m lucky enough to be working with now (I don’t have to write that - but it is true). Excellent knowledge of that they are supposed to be BDMing in the first place, more than willing to travel to interesting places and strong minded enough to be able to push back or take ownership when needed, with management supporting the situation in terms of how people are incentivised financially. The Curse of the BDM does not stalk our corridors...

Any stories people would like to share? Success stories would obviously be heart-warming, but the horror stories are often more fun to hear!

[1] Charlie Big Potatoes - a hotshot salesman, or, more typically, someone who thinks he is a hotshot salesman.

[2] Double Bubble - when two people are paid commission on a deal. In this example, the account manager and the BDM supporting him. It’s a horrible phrase that annoys me for some reason, almost as much as ‘pension pot’. My irrational linguistic dislikes are a topic for a whole series of blog posts...