Conference 7.286::digital

    re: .1
    
    I haven't a clue as to what you are talking about.
    
    re: .0
                                                          
    The important thing to notice is not what _is_ happening, but what
    activity "certs per second" displaces.
    
    Actions which create longer-term interest in our products and services
    such as training for our employees and seminars for customers don't
    happen.  Large projects don't get the attention they deserve.  Small
    and low probability opportunities get more attention than they deserve.
    
    Anything that takes time, like targeting Wang's customers, strategic
    third parties, etc. can't be done under time pressure.
    
    The biggest "un-addressed" problem for sales is the length of the sales
    cycle.  The pressure to sell isn't enough.  We're still in 3 month
    selling cycles for $30,000 configuration.  Which is remarkable when one
    considers the selling cycle for $10,000 PS/2 configurations to be about
    one hour.
    
    For those of you who read about marketing issues in the MARKETING
    conference where I reported that Ken Olsen concedes the new products
    won't be reflected in Digital's announced earnings until Q3.  This is
    not a contradiction: the pressure has to be on in Q1 to record orders
    that will become shipments to customers by Q3, and reflected in
    earnings statements that are announced in April 1990.  

    For those of us who are new, please, what are "certs"?

    .2 
    
    I agree with you Pat, that the "short term" view still presist and
    the selling cycle for "low" margin systems is to long.  If DEC where
    to use mass distribution channels for "low" margin systems, this
    may help relieve the "inside" selling force to focus more on
    _strategic_ opportunities and the "long term" relationships
    with customers.  Programs like DECdirect only effect existing DEC
    customers and not the masses of people or businesses that are looking
    to use computers as a competitive tool.
    
    On the other hand .0 has a valid point this Q1.  The call to bring
    in everything in Q4'89 was tremendous.  We  _harvested_ more
    then we _planted_ and the effects have not all been felt.
    
    0.
    
    I think what your are seeing, experienceing, is not all different
    then what has existed in the past, it just that the current climate
    has manifested it to higher levels in the customer.  The DEC president
    of Europe used the analogy of two cars racing at high speeds.  The
    front car being revenue and the latter car being expenses.  When
    the latter car is moving faster then the front car, there is going
    to be a problem.  That is the situation we have today.  If the front
    cars speed (growth) is limited by external conditions (sluggish
    economy) then the rear cars speed needs to be adjusted.  (Salary
    Freeze, hiring freeze, etc...)  It is not, then DEC will be in _BIG_
    trouble.
    
    I believe DEC's upper management understands this very clearly.
    It's getting the lower levels to _wake_up to this fact and that
    if the revenue (certs-per-second) is not growing faster than expenses
    (direct and in-direct) we are all headed for trouble.  ALL OF US!
    
    This basicly boils down to the basic question of "What _IS_ the
    right thing to do?"  In most cases this is translated to "What is
    the RIGHT thing for ME?" on an individual basis.  Lots of people
    have made investments in DEC and vise-versa but there still exist
    an attitude of "What is best for me is GOOD for DEC." rather than
    "What is GOOD for DEC may not be good for me."  I have seen to many
    short sighted decisions that take the former approach rather than
    the latter approach all in the name of CUSTOMER SATISFACTION.
    
    My prediction is, if the majority of DEC's employees don't wake
    up to the fact that the "good old days" have past and take a "What
    is GOOD for DEC" rather then "ME" attitude, the two high speed cars
    are going to "CRASH" and we will all lose.
    
    My .02...
    LLY

    re: .3
    
    Basically, certified or booked business.  The primary financial
    measurement of the sales force.  It becomes a little complicated
    in that individual measurements may be augmented by shadow bookings
    or incentive uplifts in some cases, giving rise to multiple flavors
    of the same metric, namely fiscal and measurement certs.
    
    Al
    

    What else to you expect when you have a company being managed almost
    exclusively for the benefit of a few Wall Street twerps.
    
    We have to acknowledge that the marketplace has rapidly matured,
    and that we and the other major players are going to have to live
    off our installed base, and what we can steal from the other guy.
    
    I heard a VP comment the other day that this company either needs
    80,000 employees or 20 Billion in revenue.  Guess which one will
    happen????
    

    > I agree with you Pat, that the "short term" view still presist and the
    > selling cycle for "low" margin systems is to long.
    
    Yes, the selling cycle for "low" margin systems is definitely too long. 
    But in addition, I see absolutely no commitment to the very long
    selling cycles required to close the really big opportunities -- the
    $100+M sales.  Those cycles are often 3 - 5 years.  The Corporate
    Accounts organizations are out there chasing certs per second just like
    the tactical sales force.  Who's going to develop the really big
    opportunities that not only won't close this quarter, but won't even
    close this year?  
    
    > The DEC president of Europe used the analogy of two cars racing at high
    > speeds.  The front car being revenue and the latter car being expenses. 
    > When the latter car is moving faster then the front car, there is going
    > to be a problem.  That is the situation we have today.  If the front
    > cars speed (growth) is limited by external conditions (sluggish
    > economy) then the rear cars speed needs to be adjusted.  (Salary
    > Freeze, hiring freeze, etc...)  It is not, then DEC will be in _BIG_
    > trouble.
    
    I guess the problem I have is that no one in senior management seems to
    be REALLY committed to slowing down the rear car.  Oh yeah, we're
    seeing a hiring freeze (or are we?), a salary freeze, etc.  I even took
    a customer on an out-of-town trip last week where one of our marketing
    people had to stay at a different hotel from me and the customers. 
    Seems our rooms were about $70.00 a night, and that was more than the
    marketing guy was allowed to spend so he had to stay at a Holiday Inn
    down the street.  How does that look to our customers, huh??  Anyway,
    I'm straying from my point.  Wny isn't anyone looking at all the fat
    that's causing that rear car to speed?  Our overhead has its own
    overhead!  It exists in layer after layer until it's dragging us down
    into a quagmire from which we may not be able to pull out.  It is
    feeding on itself and growing totally out of control.  The solution to
    everything seems to be to create a new management or staff position. 
    The field is *dying* for lack of resources, and we're appointing
    assistants to the assistant to the deputy of sales of programming
    languages that completed their phase review when the moon was full on
    the third Thursday of the month.  And at the same time we're creating
    and maintaining those high-paying jobs, we're worrying about someone
    spending $20.00 a night too much on a hotel room.  Give me a break!!!!! 
    I'd like to see some *real* commitment to slowing down that rear car,
    and maybe we wouldn't have to put so much pressure on the field to
    generate certs per second.
    
    > This basicly boils down to the basic question of "What _IS_ the
    > right thing to do?"  In most cases this is translated to "What is
    > the RIGHT thing for ME?" on an individual basis.  Lots of people
    > have made investments in DEC and vise-versa but there still exist
    > an attitude of "What is best for me is GOOD for DEC." rather than
    > "What is GOOD for DEC may not be good for me."  I have seen to many
    > short sighted decisions that take the former approach rather than
    > the latter approach all in the name of CUSTOMER SATISFACTION.
    
    The point I made in .0 is that when the pressure is on, the Sales
    organization must bring in certs.  They can close a piece of business
    that we'll lose money on and still be heros.  They aren't responsible
    for P&L; they're only held repsonsible for orders.  Now, the huge
    majority of them are ethical, good people, and they care enough about
    Digital to carefully qualify the business they close and
    conscientiously avoid bad or soft business.  But what happens when they
    are forced to choose between closing bad business and failing?  That's
    what happened before, and I fear it's going to happen again.
    
    							Pat
    

    My favorite Volume Sales ploy is, for the sake of a good looking
    Q4, to BEG and BEG the resellers to take early delivery of systems,
    and give larger discounts for them to do so. This is called 'buying the
    business'.  Essentially, you've emptied the pipeline (and paid to
    do it) in order to maximize ships in Q4.
    
    Guess what happens near the end of Q1 ?
    
    karl

    
    
    I saw the effects of the short-term, high-pressure sales
    push in the office I used to work in.
    
    The town I worked in had no DEC sales reps for years.  The
    office responsible for DEC sales was about 150 miles away.
    Most of the time, DEC sales reps never even returned the calls
    of potential customers from this town.
    
    Lo and behold, when DEC placed salesmen there, they were shunned.
    
    It's taken 5 YEARS to begin to ease the suspicion of the largest
    computer-buyers (this is a town that happens to contain the I*M
    office with the largest gross sales in its quadrant of the country. 
    The computer dollars were there for SOMEBODY).
    
    A friend of mine told the story of his company trying to get DEC
    to sell them a VAX, never getting a return phone call, and shrugging
    their shoulders, going with Big Blue, and fighting a System 38
    for years....

    Somethin's gotta give...
    
    Steve H
    
    

In my previous life I was installing Ethernet in our building.  I made
up a list of everything I needed, called my DEC salesman and asked him
for a quote, and sent him a list.   He said he'd get back to me with a
quote. I waited...and waited...and waited...and waited...After a month I
called up a local OEM and bought 3D Party boards, cables, and terminal
servers. It cost me $30,000 while buying the equivalent stuff from DEC
would have costed $50,000 AND I had the stuff in the office within a
week. About four months later the DEC saleman called me and said he was
working on the quote...I never did get it. 

John

    My own belief is that the Q1 "push" on certs is the result of several
    factors, not all of them bad but maybe just misguided.  Most of the
    list has been mentioned, but I'll recap:
    
    1.  Most or all of the forecasted Q1 business was pulled into
        Q4, usually by offering major incentives to the customers,
        which of course lowered the profit margin even more.
    
    2.  Fear of the Wall Street stock analysts and what they will do to
        us if we turn in a really bad quarter.
    
    3.  Expenses that continue to grow (what does it cost to run programs
        like DEC University?) added to the expense we must be incurring to
        tool up to build our new processors.
    
    4.  Customers who (without a major sales effort) will sit on the fence
        and wait for those new products to come out, while our warehouses
        are still full of "old" 6200's and 8xxx's and RA82's.  We have to
        get out there and clear out our existing inventory while we still
        have time before the new products can be shipped.
    
    5.  Middle and upper Sales and Marketing managers who believe that jobs
        are on the line (whether they are or not, I don't know) and who are
        willing to gamble the short-term gains against the long-term effects.
    
    6.  The possibility that the wage freeze will extend to 6 or 12 months or
        longer if the margin performance graphs don't start to turn around
        by the end of this quarter.  You may rest assured that management
        does not want a major turnover because we can't pay our people.
    
    So I can see both "good" and "bad" motives for the frenzy to get business
    into Q1, but I still feel the effects are not worth any of the possible
    benefits.  I hate the salary freeze as much as anybody, but I hate the
    thought of again destroying long-term customer relationships the way we
    did in 1982 and 1983.  I also think that the sales force is getting
    pushed closer to the snapping point, and that a major turnover at this
    time would cost us tens of millions of dollars in wasted training and
    experience, and in missed sales opportunities.  Given the (needless)
    complexity of our administrative systems, it probably takes anywhere
    between six months to a year for a sales rep to become a productive
    resource for the company, and even longer to rebuild the customer's
    confidence in that rep.
    
    I think that the sales reps should not be forced to bear the brunt
    of this "push" (and the inevitable Q2 "push") without at least some
    comprehensive support from top management, hopefully in the form of
    POSITIVE re-inforcement rather than by threatening jobs.  And we all
    need to keep a VERY close watch on our customer satisfaction quotient.
    We absolutely can't afford to damage it any further.
    
    Geoff Unland

    The title of the base note is "long term effects".  There's been
    a great deal of discussion "why" we do this, but, basically, what
    *are* the long term effects?
    
    I'll attempt a simple answer for this - deadly!
    
    The only really positive (and I use the word loosely) effect of
    the short term certs/minute mentality is that it does bring in the
    money to keep us on the SCP (salary continuation plan) - the genuine
    negative effect is that it simply cannot continue, the "pipeline"
    will dry up, customers are *not* happy - not one single element
    of the certs/minute mentality has positive long term effects.
    
    Having spent 97% of my DEClife in sales, and having a genuine affection
    for the occupation, this CPM mentality is devastating.  I believe,
    sincerely, that DEC has, as a general rule, some of the best damned
    sales people in the industry.  They really want to "do what is right",
    they want to satisfy customers ... but ... CPM simply doesn't allow.
                                               --- ------ ------- ------    
    The most damning long term effect is that the "window of opportunity"
    has been open for DEC for about two years, and, in about 2 years
    (or less) it's going to shut - and - tight!!  We could, so very
    easily, have a field day with the competition... and ... it just
    isn't happening.
    
    Products simply won't cut it any more - that game is over - we must
    and I emphasize *must* learn what STRATEGIC selling is and *practice*
    it, or, folks, we gonna' be in deep trouble very shortly.  This
    tactical CPM stuff is going to be deadly ... 
    
    Ever heard the phrase "win the battles and loose the war"?  That's
    exactly where we're heading - I remember distinctly a little conflict
    over in 'Nam where we won all (most) of the battles, and, most
    assuredly lost the war for the simple reason that "tactics" (and
    bad ones to boot) were the order of the day, and, rarely did "strategy"
    come to mind..... this is exactly what I see the CPM mentality taking
    us.
    
    Pardon the "emotions" here, but, this is my hot button.
    
    Jerry Beeler