How Not To Sell Software in 2012(al3x.net)
al3x.net
How Not To Sell Software in 2012
http://al3x.net/2012/02/29/how-not-to-sell-software-in-2012.html
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Many if not most of the "business-to-business" software companies that try to adopt this mindset will find themselves losing money as a result. The "enterprise" sales process is intensely aggravating, yes, but it affords software vendors opportunities to discriminate on price, get direct feedback from customers, offer advance features, and qualify their customers so they can focus sales resources on budgeted projects.
There are also pretty obvious economic reasons why companies with 5-figure customer LTVs might avoid credit card billing. There are services that work well with metered billing, but many others in which customers will demand flat licensing.
I can also absolutely see why Github would would to keep a pretty tight handle on who's trialing what is in effect a packaged-up version of one of the most important software sites on the Internet. We're a FI customer. Incidentally, on the scale of "enterprisey" sales processes, they were an absolute dream to work with.
There are also pretty obvious economic reasons why companies with 5-figure customer LTVs might avoid credit card billing. There are services that work well with metered billing, but many others in which customers will demand flat licensing.
I can also absolutely see why Github would would to keep a pretty tight handle on who's trialing what is in effect a packaged-up version of one of the most important software sites on the Internet. We're a FI customer. Incidentally, on the scale of "enterprisey" sales processes, they were an absolute dream to work with.
A lot of this depends on the type of product and market that you're in. For software that costs up to a couple hundred bucks a month, all of these points make perfect sense.
Products that are more expensive tend to also be more involved. A lot of times, the sales team needs to understand how the customer is going to use the product and help them get it up and running. HubSpot is probably a good example of this. From my understanding, the way they nailed their retention problem back in the day was to go through extensive training / onboarding with each customer.
Simply leaving customers to their own devices on a complicated product is quite often horrible for conversions, which is a wasted opportunity for the vendor and inconveniences a potentially customer that might have otherwise been perfectly happy with the product after learning how it works.
Products that are more expensive tend to also be more involved. A lot of times, the sales team needs to understand how the customer is going to use the product and help them get it up and running. HubSpot is probably a good example of this. From my understanding, the way they nailed their retention problem back in the day was to go through extensive training / onboarding with each customer.
Simply leaving customers to their own devices on a complicated product is quite often horrible for conversions, which is a wasted opportunity for the vendor and inconveniences a potentially customer that might have otherwise been perfectly happy with the product after learning how it works.
Yep. My business takes the following approach:
1) Open source
2) Get in a consultation with you to see what needs to be changed
3) Submit a proposal.
4) Engage in further discussion to ensure we stay useful. Some degree of included support is good to do that.
I have been told over and over that we charge too much for the SE Asian market, but once they start comparing what they get for the money (focus on delivering value) that goes out the window.
1) Open source
2) Get in a consultation with you to see what needs to be changed
3) Submit a proposal.
4) Engage in further discussion to ensure we stay useful. Some degree of included support is good to do that.
I have been told over and over that we charge too much for the SE Asian market, but once they start comparing what they get for the money (focus on delivering value) that goes out the window.
i'm the ceo of a company that sells b2b software. we never sell a product for less than $2k annually, and our contracts are frequently in the 5 figures annually.
our current sales cycle includes a lot of the negatives that you point out. however, we're up front with our pricing while our competitors aren't.
we actually created a product that did nearly exactly what you said. we didn't get nearly as many customers with that method. people would sign up (sometimes) and when they did, they tended not to pay once their 30 day free trial was up. our conversion rates sucked. we ended up canceling that product and removing it from our site after 8 months.
when we have a webinar with a sales call, our closure rates increase dramatically. customers tend not to pay by credit card even when given the option.
i actually think you're 100% right for many, many products. but i don't think it'd work in my boring b2b industry.
edit: we probably didn't do enough experimentation on the small product as we should have, so i take some of the blame for that.
our current sales cycle includes a lot of the negatives that you point out. however, we're up front with our pricing while our competitors aren't.
we actually created a product that did nearly exactly what you said. we didn't get nearly as many customers with that method. people would sign up (sometimes) and when they did, they tended not to pay once their 30 day free trial was up. our conversion rates sucked. we ended up canceling that product and removing it from our site after 8 months.
when we have a webinar with a sales call, our closure rates increase dramatically. customers tend not to pay by credit card even when given the option.
i actually think you're 100% right for many, many products. but i don't think it'd work in my boring b2b industry.
edit: we probably didn't do enough experimentation on the small product as we should have, so i take some of the blame for that.
Thanks, that is a great comment based on experience. Can you say more about your industry and/or path to success? What was most surprising? Do you have salespeople actively soliciting business or do most prospects find you? What advice would you give to startups planning to break into the b2b world?
gladly.
i think the single biggest contributor to our success has been the fact that we are in close contact with our customers.
if we lose a sale, we have the opportunity to learn why we lost. during a webinar, we hear the reactions of customers. with RFP's we get a list of the features they want.
when we win, we stay close to them during implementation. we learn what works/what doesn't work with our products.
based upon this feedback, we're able to constantly refine our products and messaging to what our customers want.
we started with a product guy who could pump out code (me), and a phenomenal sales guy. the two of us essentially built the initial business.
we never took any funding.
the most surprising thing is how long it takes to build a solid product. how long it takes to get momentum. everything just takes a lot longer than you'd expect. it's also a funny thing. once you've achieved a small amount of success (and mine is small), people start thinking you actually know what you're talking about. in my experience - apart from geniuses like jobs, gates, musk, etc - there's nothing that separates you from me. it just takes time, dedication and hard work.
edit: most people find us. we also have business associates who resell to their customer base and customers sometimes give us nice referrals.
advice: b2b is great because people actually pay for shit. lots of b2b software is just awful, i think you can differentiate by providing an excellent product. it'll stand out and give you a solid niche.
i'd also say that you should not give your software away for free in b2b. but you should give it to a trial set of customers initially who can help you work out the kinks. stay close to the customers, they can help guide you and tell you where they look for software like what you're selling.
online advertising works great. use landing pages, a/b test them. all the things that you probably already know, just put them into practice. they exist because they work.
i think the single biggest contributor to our success has been the fact that we are in close contact with our customers.
if we lose a sale, we have the opportunity to learn why we lost. during a webinar, we hear the reactions of customers. with RFP's we get a list of the features they want.
when we win, we stay close to them during implementation. we learn what works/what doesn't work with our products.
based upon this feedback, we're able to constantly refine our products and messaging to what our customers want.
we started with a product guy who could pump out code (me), and a phenomenal sales guy. the two of us essentially built the initial business.
we never took any funding.
the most surprising thing is how long it takes to build a solid product. how long it takes to get momentum. everything just takes a lot longer than you'd expect. it's also a funny thing. once you've achieved a small amount of success (and mine is small), people start thinking you actually know what you're talking about. in my experience - apart from geniuses like jobs, gates, musk, etc - there's nothing that separates you from me. it just takes time, dedication and hard work.
edit: most people find us. we also have business associates who resell to their customer base and customers sometimes give us nice referrals.
advice: b2b is great because people actually pay for shit. lots of b2b software is just awful, i think you can differentiate by providing an excellent product. it'll stand out and give you a solid niche.
i'd also say that you should not give your software away for free in b2b. but you should give it to a trial set of customers initially who can help you work out the kinks. stay close to the customers, they can help guide you and tell you where they look for software like what you're selling.
online advertising works great. use landing pages, a/b test them. all the things that you probably already know, just put them into practice. they exist because they work.
Would love to get your take on what sorts of online advertising has worked and not worked for you in building your company.
obviously google adwords. remarketing pixels are good. adsense blew away a ton of cash with few results.
but check out other directory listings. www.capterra.com is HUGE for us. our conversion rates there are about 12% (!!!!). organic conversion rates are about 2.5%. which is much more reasonable. but we spend a lot of $$$$ with them.
edit: a conversion for us is a lead.
but check out other directory listings. www.capterra.com is HUGE for us. our conversion rates there are about 12% (!!!!). organic conversion rates are about 2.5%. which is much more reasonable. but we spend a lot of $$$$ with them.
edit: a conversion for us is a lead.
Would you mind to provide examples of B2B software that we rarely heard of?
I have interest in B2B more than B2C occasionally but don't really have a lot of domain knowledge. Would you happen to know a few general tricks how or where to get such knowledge?
I have interest in B2B more than B2C occasionally but don't really have a lot of domain knowledge. Would you happen to know a few general tricks how or where to get such knowledge?
sure. first of all, if you're a cs major (like me) it's doubtful that you'll have the right domain knowledge.
in my case, my father and family friend approached me and asked if i could build something. our co-founder said "all the software in this (hr technology) industry sucked". can i build xyz? over a long period of time, i did.
so my general trick would be - find people who are in completely opposite industries as you are right now. doing totally different, non-technical work. often times they're consultants that are reselling other companies products. and they know - since they've been implementing products and speaking to customers on a daily basis - where the customer pain points are.
hope that helps. it only happened for me once, so it's hard to replicate, but i hope you get the chance.
in my case, my father and family friend approached me and asked if i could build something. our co-founder said "all the software in this (hr technology) industry sucked". can i build xyz? over a long period of time, i did.
so my general trick would be - find people who are in completely opposite industries as you are right now. doing totally different, non-technical work. often times they're consultants that are reselling other companies products. and they know - since they've been implementing products and speaking to customers on a daily basis - where the customer pain points are.
hope that helps. it only happened for me once, so it's hard to replicate, but i hope you get the chance.
Just curious, how did you find your sales guy and how did decide on the revenue split?
we're a type s corp, so it's a flow-through entity. at the end of the year we distributed remaining profits based upon equal ownership (things have changed as we've grown). he worked off commission only to begin with and i drew a small salary once we had revenue.
but...i was in college and my salary requirements were low. the sales guy? my dad who had another job at the time (sales at: apple, sun microsystems, hitachi datasystems, etc).
i think that's not a bad bootstrapping model though. if you're both employed, you can both take commission and built it part time until you can jump ship and do it full time.
but the question i hear you saying is - "where am i gonna find a sales guy?" you and i are techies at heart and probably have mostly techie (non sales type) friends.
like everything else, sales isn't a great mystery but it's good to find an experienced person. couple ways to find people, and i had a recruiter recently give me some advice that i'll pass on to you.
linkedin is the new recruitment tool. start looking for some sales guys that already work for companies that have the kind of sales guys you want, and get a hold of them (not sure if you need a premium linkedin for that or not). there's also professional networking events around, but i find that those tend to be about measure whose dick is bigger versus making meaningful relationships.
which city are you in? look up startup networking stuff. i hear all the time about people who want to find a technical co-founder. annoyingly large amounts. and on projects i usually wouldn't invest any time in.
but...i was in college and my salary requirements were low. the sales guy? my dad who had another job at the time (sales at: apple, sun microsystems, hitachi datasystems, etc).
i think that's not a bad bootstrapping model though. if you're both employed, you can both take commission and built it part time until you can jump ship and do it full time.
but the question i hear you saying is - "where am i gonna find a sales guy?" you and i are techies at heart and probably have mostly techie (non sales type) friends.
like everything else, sales isn't a great mystery but it's good to find an experienced person. couple ways to find people, and i had a recruiter recently give me some advice that i'll pass on to you.
linkedin is the new recruitment tool. start looking for some sales guys that already work for companies that have the kind of sales guys you want, and get a hold of them (not sure if you need a premium linkedin for that or not). there's also professional networking events around, but i find that those tend to be about measure whose dick is bigger versus making meaningful relationships.
which city are you in? look up startup networking stuff. i hear all the time about people who want to find a technical co-founder. annoyingly large amounts. and on projects i usually wouldn't invest any time in.
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Sales capitalizes on what works. If an enterprise sales process works for a company, guess what they're going to keep doing?
This blog post should be titled "How Not to Sell Software to Alex Payne".
This blog post should be titled "How Not to Sell Software to Alex Payne".
It’s 2012. Practically everyone who’s paying for software is doing so through an app store: one click or tap and you’ve got what you want.
Practically everyone buying software for mobile or from Apple? In the rest of the world almost no desktop software is selling through app stores, one click or otherwise.
Practically everyone buying software for mobile or from Apple? In the rest of the world almost no desktop software is selling through app stores, one click or otherwise.
There is this space between "personal" and "enterprise" where this model works. Call it "startup" or "small business". I want something, I have a credit card, I buy, I move on. The less hassle the better.
But in real enterprises, I don't have a credit card. I don't even have authority to purchase. (There is a whole department named "procurement" for that.) But I need to see "sales decks", do webinars, talk to salesmen trying to understand my needs and saying yes to every question I ask, download trial versions, spec out requirements, do a business case, write up a recommendation to management, and figure out how complex software with lots of optional modules fits within our existing environment. It could take months to make a purchase decision on some software. In the past year, my current client has paid to fly me 500 miles away (a few times actually) to talk to salespeople face to face to get product demos and talk strategy before the ink is signed on the purchase order. These decisions are not easy nor quick nor cheap.
I understand the frustration in this post. I respect this model doesn't work at smaller scales. The current model is not perfect at larger scales. But $50,000 a year software doesn't get sold by credit card online nor through "app stores". Any company that tried to switch away from the old model and follow the new model at that level would fail, I believe.
But in real enterprises, I don't have a credit card. I don't even have authority to purchase. (There is a whole department named "procurement" for that.) But I need to see "sales decks", do webinars, talk to salesmen trying to understand my needs and saying yes to every question I ask, download trial versions, spec out requirements, do a business case, write up a recommendation to management, and figure out how complex software with lots of optional modules fits within our existing environment. It could take months to make a purchase decision on some software. In the past year, my current client has paid to fly me 500 miles away (a few times actually) to talk to salespeople face to face to get product demos and talk strategy before the ink is signed on the purchase order. These decisions are not easy nor quick nor cheap.
I understand the frustration in this post. I respect this model doesn't work at smaller scales. The current model is not perfect at larger scales. But $50,000 a year software doesn't get sold by credit card online nor through "app stores". Any company that tried to switch away from the old model and follow the new model at that level would fail, I believe.
Spot on.
As an example of just how ridiculous it gets, we recently drafted an RFP for a solution for licensing our custom-made software to our customers and had a vendor come in with their solution. When it came time to discuss pricing, their response was "we charge based on the amount of revenue you'll be getting from the software...so just tell us how much money you're going to make from your software and we'll get a quote over to you." Of course we told them to take a hike, but not before speaking with their other large customers who actually agreed to this model. It's frustrating to be sure, but also completely expected at the enterprise level.
As an example of just how ridiculous it gets, we recently drafted an RFP for a solution for licensing our custom-made software to our customers and had a vendor come in with their solution. When it came time to discuss pricing, their response was "we charge based on the amount of revenue you'll be getting from the software...so just tell us how much money you're going to make from your software and we'll get a quote over to you." Of course we told them to take a hike, but not before speaking with their other large customers who actually agreed to this model. It's frustrating to be sure, but also completely expected at the enterprise level.
Of course it's expected! When you have a solution that is going to make a huge amount of money for some other organization, you'd like to capture some of that upside as well.
Did you know that HBO prices it's channel lineup to the CableCo's at 50% of whatever they sell it for -or- $minimum_price_per_subscriber.
Enterprise software is a whole different game and blog posts like these dont fully capture the wide range of customers in the enterprise space OR the WIDELY varying levels of technical acumen that they possess. YOU might be able to take an executable and integrate it into your systems just fine, but the IT-shop at the local car dealership down the road probably doesn't. They'll happily pay for the handholding.
I guess I just find it amusing when a startup gets frustrated by the software business. If you think their sales process is cumbersome or opaque, that's probably a clue that you're not their target customer.
Did you know that HBO prices it's channel lineup to the CableCo's at 50% of whatever they sell it for -or- $minimum_price_per_subscriber.
Enterprise software is a whole different game and blog posts like these dont fully capture the wide range of customers in the enterprise space OR the WIDELY varying levels of technical acumen that they possess. YOU might be able to take an executable and integrate it into your systems just fine, but the IT-shop at the local car dealership down the road probably doesn't. They'll happily pay for the handholding.
I guess I just find it amusing when a startup gets frustrated by the software business. If you think their sales process is cumbersome or opaque, that's probably a clue that you're not their target customer.
Having spent the last year on a procurement project I agree, when it's millions of pounds at stake (much more in potential benefits) the sales process is necessarily protracted. However, I agree about the pricing games. In my experience, companies give a massive list price (but don't answer questions about how many companies actually pay that price - I figure none) and then argue the "discount" percentage.
Stoney silence in pricing discussions my side is the way to get to a price that's worth talking about, months can elapse though, it's tiresome.
Stoney silence in pricing discussions my side is the way to get to a price that's worth talking about, months can elapse though, it's tiresome.
I work in Procurement and run RFP's all the time. you are right that enterprises go through this whole process and that they ask a lot of questions about software capabilities. But honestly, at the end of the day, the process is so long and drawn out mostly because of compliance. Start-ups are fun companies that don't really have to worry about the threat of being regulated or audited by the government. But a publicly traded company that has a lot of risks (banks, car manufacturers, enterprise hardware) is going to be constantly under watch. As soon as the government finds what it deems a mis-use of funds, say sainara to productivity and hello to deep auditing and a halt on productivity thanks to long meetings with auditors.
I really think if it was about price and quality, you could get through a sourcing effort in a week or two. Show me what ya got, tell me how much you are charging.
Full Disclosure: I hate my job.
I really think if it was about price and quality, you could get through a sourcing effort in a week or two. Show me what ya got, tell me how much you are charging.
Full Disclosure: I hate my job.
As long as you hate being a part of that shitty machine, it's ok... I guess.
EDIT: I love my job.. mostly because I got to install an app for my team that increases productivity WITHOUT:
-Requesting a dev server build
-Requesting a test server build
-Getting permission to use an open source tool
-Getting persmission to run said tool on "non-standard language" (PHP)
-Explaining why I'm installing a tool for which one already exists for our usecase (the enterprise solution sucks)
-Getting a prod server build
EDIT: I love my job.. mostly because I got to install an app for my team that increases productivity WITHOUT:
-Requesting a dev server build
-Requesting a test server build
-Getting permission to use an open source tool
-Getting persmission to run said tool on "non-standard language" (PHP)
-Explaining why I'm installing a tool for which one already exists for our usecase (the enterprise solution sucks)
-Getting a prod server build
I can guarantee you SpaceX has a very extensive onboarding stage with their customers, but I love how they have a no-bullshit pricing guide.
http://www.spacex.com/falcon1.php#launch_and_placement
Want placement on that rocket? 10.9 million regardless of who you are. From there, if you're a serious customer they'll begin the onboarding process. I love it.
http://www.spacex.com/falcon1.php#launch_and_placement
Want placement on that rocket? 10.9 million regardless of who you are. From there, if you're a serious customer they'll begin the onboarding process. I love it.
Well that just isn't true. Here's what they actually say:
SpaceX offers open and fixed pricing that is the same for all customers, including a best price guarantee. Modest discounts are available for contractually committed, multi-launch purchases. Falcon 1 is the world’s lowest cost per flight to orbit of a production rocket. Falcon 1 Price: $10.9M Current plans are for payloads that would fly on Falcon 1 to be served by flights on the Falcon 9, utilizing excess capacity. This is a very cost-effective solution for small satellite launch needs.
So.. if you commit to using SpaceX more than once, you can negotiate a discount. If you are prepared to use a different launch vehicle, you get a discount. They offer a best price guarantee, so you can play them off against another company.
It's nice they have a list price, but to me that sounds exactly like the list price for Oracle: only suckers pay what is listed.
SpaceX offers open and fixed pricing that is the same for all customers, including a best price guarantee. Modest discounts are available for contractually committed, multi-launch purchases. Falcon 1 is the world’s lowest cost per flight to orbit of a production rocket. Falcon 1 Price: $10.9M Current plans are for payloads that would fly on Falcon 1 to be served by flights on the Falcon 9, utilizing excess capacity. This is a very cost-effective solution for small satellite launch needs.
So.. if you commit to using SpaceX more than once, you can negotiate a discount. If you are prepared to use a different launch vehicle, you get a discount. They offer a best price guarantee, so you can play them off against another company.
It's nice they have a list price, but to me that sounds exactly like the list price for Oracle: only suckers pay what is listed.
Addendum:
1) Don't ask me why/when/where/how I will use my brand-new software
2) Don't force me to "try" other software just because I bought one
3) Don't force me to give you informations that are not strictly correlated with the purchase
1) Don't ask me why/when/where/how I will use my brand-new software
2) Don't force me to "try" other software just because I bought one
3) Don't force me to give you informations that are not strictly correlated with the purchase
Although in principle I agree, I have to say this is simply naive and ignorant to the way things are done in other circles. If you were to purchase say Oracle licenses this way, there is no way this model would work.
You will not go to the Oracle app store and it will not have a database of all the large corporate IPs in the world with which it can reverse engineer your available funds and likely chain of purchase decision, and it will not then just put up a few million dollar for that year figure that you can click and instantly pay with your credit card.
Strippers must be witnessed, steaks must be consumed, conferences must be attended, rounds of golf must be played, lip service must be paid to ridiculous conceptual bugaboos, the purchasing bureaucracy must be reverse engineered, the chaff must be sorted from the wheat, starched collars must be preened, ignorant men in suits must be consulted as if their opinion had worth. And this is of course only the parodied incomplete summary of the entire horrifying affair.
Oracle and their ilk are feasting on elephants. Some would even fairly say mammoths; they are big, fat and move very slowly. The entire idea that a strategy could be formulated, evaluated, shopped for signatures to the relevant parties, signed off on by the law department, agreed to and generally made in the amount of time it takes to make a purchase with the paradigm offered as an example in this scenario is likely terrifying if not utterly extraterrestrial to them.
You will not go to the Oracle app store and it will not have a database of all the large corporate IPs in the world with which it can reverse engineer your available funds and likely chain of purchase decision, and it will not then just put up a few million dollar for that year figure that you can click and instantly pay with your credit card.
Strippers must be witnessed, steaks must be consumed, conferences must be attended, rounds of golf must be played, lip service must be paid to ridiculous conceptual bugaboos, the purchasing bureaucracy must be reverse engineered, the chaff must be sorted from the wheat, starched collars must be preened, ignorant men in suits must be consulted as if their opinion had worth. And this is of course only the parodied incomplete summary of the entire horrifying affair.
Oracle and their ilk are feasting on elephants. Some would even fairly say mammoths; they are big, fat and move very slowly. The entire idea that a strategy could be formulated, evaluated, shopped for signatures to the relevant parties, signed off on by the law department, agreed to and generally made in the amount of time it takes to make a purchase with the paradigm offered as an example in this scenario is likely terrifying if not utterly extraterrestrial to them.
Don’t automatically sign me up for a newsletter about your company or product when I give you my contact information. Ideally, don’t request my contact information at all until I’m giving you money.
I agree with the first part -- always ask people for permission, probably by kicking them a sweetener (e.g. "1 month email course on X"). I have data that I cannot show you which is in you-could-run-your-company-on-just-this-trick violent disagreement with the second point here. If you don't like email, cool, but email is worth serious money in B2B software sales. (So are salespeople, by the way, even at pricepoints lower than you'd think would warrant a salesman. Think "4 figure LTV." + )
Also, at the risk of stating the obvious, every email-deleting-salesmanship-hating engineer in the world could drop dead of a heart attack tomorrow and neither buyers or sellers of enterprise software would notice until several months later when trying to figure out why the sales engineers stopped submitting expense reports.
+ Addendum: Joel Spolsky's famous Camels and Rubber Duckies article talks about there being basically two price points for sales now, but a combination of a better delivery mechanisms - SaaS - and better sales procedures/technologies opens up a bunch of very interesting options in the middle for something between BCC $30 "Every email from a customer is a wonderful opportunity to fix that from happening ever again" and steak-dinners-and-Powerpoint-decks enterprise sales for $75k+.
I have some amount of knowledge about this these days, since I help my clients implement it. If you're interested in hearing more, say so, I'll try to blog it (some day when I get out from a mountain of work and email).
I agree with the first part -- always ask people for permission, probably by kicking them a sweetener (e.g. "1 month email course on X"). I have data that I cannot show you which is in you-could-run-your-company-on-just-this-trick violent disagreement with the second point here. If you don't like email, cool, but email is worth serious money in B2B software sales. (So are salespeople, by the way, even at pricepoints lower than you'd think would warrant a salesman. Think "4 figure LTV." + )
Also, at the risk of stating the obvious, every email-deleting-salesmanship-hating engineer in the world could drop dead of a heart attack tomorrow and neither buyers or sellers of enterprise software would notice until several months later when trying to figure out why the sales engineers stopped submitting expense reports.
+ Addendum: Joel Spolsky's famous Camels and Rubber Duckies article talks about there being basically two price points for sales now, but a combination of a better delivery mechanisms - SaaS - and better sales procedures/technologies opens up a bunch of very interesting options in the middle for something between BCC $30 "Every email from a customer is a wonderful opportunity to fix that from happening ever again" and steak-dinners-and-Powerpoint-decks enterprise sales for $75k+.
I have some amount of knowledge about this these days, since I help my clients implement it. If you're interested in hearing more, say so, I'll try to blog it (some day when I get out from a mountain of work and email).
> "1 month email course on X"
What's the advantage of being spammed for a month vs. having the entire month's course on an HTML page that I can peruse at my leisure and at my own pace? Or am I misunderstanding what an e-mail course is?
What's the advantage of being spammed for a month vs. having the entire month's course on an HTML page that I can peruse at my leisure and at my own pace? Or am I misunderstanding what an e-mail course is?
Yes, you are misunderstanding what an email course is. An email course is a daily or weekly reminder to you to keep using the product so that you'll be primed for the sales process. Given that your viewing of images will be tracked, it will also qualify your level of interest to the sales person that will be following up in person.
Ah, thank you. I've only had to make purchasing decisions twice or so, and it's always been for a pretty small and cheap product where I just tossed a credit card at them, and software/serial arrived in my inbox.
If you ask me for email, by definition sending you the email you asked for is not spam.
The advantages to the software purchaser:
1) You're a busy guy. If we critically hit you with a wall of text right now, you'll bookmark it and never get back to it. If you're honest with yourself, you know this, because you've got a backlog of things to read four miles long already. What's your RSS reader look like? Instapaper? I rest my case. So maybe giving you the highlights in a digestable format is a value add for you.
2) This is not a decision that is going to be made an instant -- there is an entire decisionmaking cycle, including research and shopping the solution you pick to your colleagues and experimenting and you get the general drift, which is likely going to take you real-life weeks. Your expertise on the problem area is currently "Not all that much" since you're only beginning the data gathering process. We can meet you where you are with the lesson for today, and when you're vastly more informed in two weeks (because learning this topic is, after all, your job) we'll send you more advanced information. Sure, we could drop everything we know on you right now, but you're not ready for it and reading it linearly will not make you ready for it.
3) Given that we're both businessmen here, we can both appreciate that we choose from mutually acceptable options, not all possible options. The software company has a lot of stuff available on the web pages for free, but if you want exactly the benefit this course is promising to you, then as a quid pro quo we would like your email address and permission to contact you. You, being a honest businessman just like us, are perfectly free to decline this offer, but if your counteroffer is "Give me all the goodies and I'll get back to you", our answer is "Not interested, thanks."
The advantages to the software company:
See above. No, really, the advantage is not "Score! We get to spam the heck out of Pavel!" We have copious data to prove that the statistical aggregate purchaser is overwhelmingly more likely to consume six emails in a month than he is to actually read a 20,000 word web page. We have surveyed buyers of enterprise software -- we know that many of them do not know what they want right now. We have had our sales reps talk to people, and we know that many of them expect to get handheld through this entire process. The email course gives the market exactly what it wants: information in a digestable, actionable format which will accomplish the goal of educating them and lead to measurable increases of qualified leads asking us to buy our software (or otherwise take the next step in the dance).
The advantages to the software purchaser:
1) You're a busy guy. If we critically hit you with a wall of text right now, you'll bookmark it and never get back to it. If you're honest with yourself, you know this, because you've got a backlog of things to read four miles long already. What's your RSS reader look like? Instapaper? I rest my case. So maybe giving you the highlights in a digestable format is a value add for you.
2) This is not a decision that is going to be made an instant -- there is an entire decisionmaking cycle, including research and shopping the solution you pick to your colleagues and experimenting and you get the general drift, which is likely going to take you real-life weeks. Your expertise on the problem area is currently "Not all that much" since you're only beginning the data gathering process. We can meet you where you are with the lesson for today, and when you're vastly more informed in two weeks (because learning this topic is, after all, your job) we'll send you more advanced information. Sure, we could drop everything we know on you right now, but you're not ready for it and reading it linearly will not make you ready for it.
3) Given that we're both businessmen here, we can both appreciate that we choose from mutually acceptable options, not all possible options. The software company has a lot of stuff available on the web pages for free, but if you want exactly the benefit this course is promising to you, then as a quid pro quo we would like your email address and permission to contact you. You, being a honest businessman just like us, are perfectly free to decline this offer, but if your counteroffer is "Give me all the goodies and I'll get back to you", our answer is "Not interested, thanks."
The advantages to the software company:
See above. No, really, the advantage is not "Score! We get to spam the heck out of Pavel!" We have copious data to prove that the statistical aggregate purchaser is overwhelmingly more likely to consume six emails in a month than he is to actually read a 20,000 word web page. We have surveyed buyers of enterprise software -- we know that many of them do not know what they want right now. We have had our sales reps talk to people, and we know that many of them expect to get handheld through this entire process. The email course gives the market exactly what it wants: information in a digestable, actionable format which will accomplish the goal of educating them and lead to measurable increases of qualified leads asking us to buy our software (or otherwise take the next step in the dance).
(I was using spam in a loose term)
Eh, I was going to address your reply point-by-point, but then I realized it was kind of dumb - all of my replies were just my opinions and preferences. To sum it up, though, if I'm really interested in a technology, I'd rather choose when I get to read about it - if I don't have the information in front of me, I'll read the information provided by your competitor, and if I have to choose fast, I'm probably going to go with the devil whose brochures I've read, instead of the one whose I haven't.
Eh, I was going to address your reply point-by-point, but then I realized it was kind of dumb - all of my replies were just my opinions and preferences. To sum it up, though, if I'm really interested in a technology, I'd rather choose when I get to read about it - if I don't have the information in front of me, I'll read the information provided by your competitor, and if I have to choose fast, I'm probably going to go with the devil whose brochures I've read, instead of the one whose I haven't.
You sure seem to know a lot about how busy I am and where my priorities lie.
I have some amount of knowledge about this these days, since I help my clients implement it. If you're interested in hearing more, say so, I'll try to blog it (some day when I get out from a mountain of work and email).
We're thinking of launching our 'enterprise product' in a SaaS format, so yes, I, for one, would very much be interested in free consulting^W^W a blog post about it.
We're thinking of launching our 'enterprise product' in a SaaS format, so yes, I, for one, would very much be interested in free consulting^W^W a blog post about it.
I don't think this is particular to software. It's just that software has the luxury of being transmittable electronically. Say your company needs some vehicles: buying one, two, three? Probably the same as a consumer. Buying 100-300? Need to start thinking about asset tracking, depreciation, maintenance & support contracts, etc. Does it even make sense on the balance sheet to buy or is leasing better? Enterprise sales have more to do with the structures of business than what is actually sold. This is why sales guys are often hired based on who've they sold to, rather than any product experience.
Your comment makes a lot of sense, much more than many comments above you.
I can only add that managers at BigCo want to cover their ass first and only then do the job. And how you gonna cover your ass when you 'try before you buy'?
I can only add that managers at BigCo want to cover their ass first and only then do the job. And how you gonna cover your ass when you 'try before you buy'?
There's no software priced between $1000 and $75,000. I'll tell
you why. The minute you charge more than $1000 you need to get
serious corporate signoffs. You need a line item in their
budget. You need purchasing managers and CEO approval and
competitive bids and paperwork. So you need to send a
salesperson out to the customer to do PowerPoint, with his
airfare, golf course memberships, and $19.95 porn movies at the
Ritz Carlton. And with all this, the cost of making one
successful sale is going to average about $50,000. If you're
sending salespeople out to customers and charging less than
$75,000, you're losing money.
The joke of it is, big companies protect themselves so well
against the risk of buying something expensive that they
actually drive up the cost of the expensive stuff, from $1000
to $75000, which mostly goes towards the cost of jumping all
the hurdles that they set up to insure that no purchase can
possibly go wrong.
The second paragraph is the key. Alex, these people aren’t trying to piss you off, they’re being driven by what BigCo wants from them. BigCo won’t let a manager try some software and declare that it meets their needs. BigCo demands that vendors respond to RFPs and RFQs, and if one vendor puts no-nonsense pricing on their web site, all of their competitors will undercut them by a penny or so and they won’t get any sales.
I could go on, but Joel has made the point: These annoying vendors have evolved to sell to those annoying customers. It isn’t the vendors that need to go extinct, it’s BigCo. BigCo buys cloud services in 2012 the way it bought time sharing in 1972, so the vendors are still using 1972 sales processes in 2012.
Right on! This should be titled "How not to sell software that costs under $1000 in 2012" because the do/don'ts obviously are wrong for non-cheap software.
Actually, I know of a number of products that are in the [1K, 75K] range.
* Visual Studio 2010 Ultimate
* vSphere datacenter edition
* TestComplete from SmartBear
* > 3 perforce licences
* Visual Studio 2010 Ultimate
* vSphere datacenter edition
* TestComplete from SmartBear
* > 3 perforce licences
Adobe and Autodesk too.
While Apple recently modified their bundles and lowered the prices for Final Cut Pro and Logic, they were both within this range and did more or less what Alex described.
While Apple recently modified their bundles and lowered the prices for Final Cut Pro and Logic, they were both within this range and did more or less what Alex described.
Joel's article was written in 2004 so, using gasoline as the benchmark, the 2012 dollars figure is $2180 [1].
[1] http://www.wolframalpha.com/input/?i=%28average+price+of+gas...
[1] http://www.wolframalpha.com/input/?i=%28average+price+of+gas...
Gasoline is a poor choice of benchmark. Energy prices aren't really a proxy for inflation.
http://www.wolframalpha.com/input/?i=core+inflation+from+200...
http://www.wolframalpha.com/input/?i=core+inflation+from+200...
The price of one license doesn't matter. What matters is the dollar amount of a sell, and I promise most of those products are being sold in the <$1k or >$75k range. The exception is Smart Bear, but they are one of the few "doing it right".
Pretty much the entire CAD market is in that price range...
I will add PLM/PDM software to that. What many people do not know is that most core CAD product companies have a PLM product as well that can contribute upto half of all company sales. I used to work for one and know this for a fact.
For a single license, you usually by many licenses for a CAD product so you can get above the $75k price.
"There's no software priced between $1000 and $75,000."
Although there are annual licences sold within this range (nearly all of our contracts are). Companies grok SaaS, whereas they probably wouldn'y have in 2004.
We do all of his wrongs, but we don't sell to small companies.
Although there are annual licences sold within this range (nearly all of our contracts are). Companies grok SaaS, whereas they probably wouldn'y have in 2004.
We do all of his wrongs, but we don't sell to small companies.
Remember this is written from a technical person's point of view. If you are selling to technical customers by all means give them a try now button and get out of their way. But if you are selling to project managers, marketers, or upper management, you should take his Don'ts list with a grain of salt.
- Edit for typos
- Edit for typos
Some sellers may have a bureaucratic sales process, but there are examples the other way around also, with customers having a long and windy buying process which is hardly worth a sale. Last year we sold our on-click download and try-before-buy product to a large US company and we had to fill out X forms and send them by hardcopy to become a "supplier". After 6 months we are still waiting for the payment.
While I agree in principle with this list, experience has taught me that if I have to talk to sales person to find out the price software, it's very likely that it's out of my company's budget (seed funded startup). I move on and save myself and the sales person from wasting any time.
If you're product targets early stage companies and doesn't cost 5+ figures monthly, and you sell software this way, then, yes, you're doing something wrong.
If you're product targets early stage companies and doesn't cost 5+ figures monthly, and you sell software this way, then, yes, you're doing something wrong.
In high priced product market ($5000+) it's a custom to babysit client and give him a lap dance with a brain massage before opening all the cards.
I think shoppers for $47 products hate it more than corporate buyer/purchasing managers.
Latter ones want to relax in a leather chair and listen to bullshit before assigning budget - it's their job and they used to it.
They certainly are not used to $5000 "buy it now" paypal buttons.
To summarize what many others are saying in this thread, unfortunately, software is currently sold not bought. That's why everyone ends up doing all this nonsense that the author describes.
I am personally in 100% agreement that it should be App Store simple but reality proves more complicated than that. It is disappointing but not surprising.
I am personally in 100% agreement that it should be App Store simple but reality proves more complicated than that. It is disappointing but not surprising.
"How Not to Sell [Cheap] Software in 2012."
or
"How Not to Sell Software [to Small Companies] in 2012."
or
"How Not to Sell Software [to Small Companies] in 2012."
New Relic really gets all these right too.
The problem with most companies that do this is simply that they want ultra-qualified leads. Truthfully, it's tough to determine whether a sign up is going to be worth $10 or $10K/mo. The other problem is, depending on the product, the sales cycle can be long. It's not that any B2B company wants to spam you, but it's that they want to remind you of their existence as much as possible so that when you start thinking about your options, they are first on your list.
Here's the logic re: Alex's points:
1. Requiring a sales call helps qualify real leads.
2. Lack of trialing the software is in part due to wanting to have a conversation with you.
3. Hiding your pricing is simply the way to have a conversation and to qualify leads. It makes price discrimination also possible. Think about selling a startup vs. IBM.
4. Whitepapers are just old school. It's useful for when lower-tier decision makers need to present something.
5. Newsletters are simply a way to be in the conversation with your company prior to when you buy--constantly.
6. Larger organizations sub-divide their resources into people who can do X or Y. Where X sometimes primes the customer for Y. It's not done to the customer's benefit, but rather to the organizations.
7. Old school.
8. Well, the truth is, cold calling can work even though it has a fairly low conversion rate. You have to start somewhere.
I am not saying we do any of this at Mixpanel necessarily, but it's the simple logic of enterprise.
Here's the logic re: Alex's points:
1. Requiring a sales call helps qualify real leads.
2. Lack of trialing the software is in part due to wanting to have a conversation with you.
3. Hiding your pricing is simply the way to have a conversation and to qualify leads. It makes price discrimination also possible. Think about selling a startup vs. IBM.
4. Whitepapers are just old school. It's useful for when lower-tier decision makers need to present something.
5. Newsletters are simply a way to be in the conversation with your company prior to when you buy--constantly.
6. Larger organizations sub-divide their resources into people who can do X or Y. Where X sometimes primes the customer for Y. It's not done to the customer's benefit, but rather to the organizations.
7. Old school.
8. Well, the truth is, cold calling can work even though it has a fairly low conversion rate. You have to start somewhere.
I am not saying we do any of this at Mixpanel necessarily, but it's the simple logic of enterprise.
I was searching for a library that does something. I found various options, commercial (approx 7,000 per server)and open-source.
Getting my hands on one commercial library for testing was like pulling teeth.
1. Register for download which requires filling in loads of company information before being given access to a download.
2. Download the trial library (Only allowed to download either windows 32 bit, windows 64 bit, linux 32 bit or linux 64 bit..want more than one? tough)
3. (Wait 2 days) Sales guy sends me licence file (Forwarding the Salesforce "You have a new lead!" email no less which really annoyed me, "I am not a lead, I am a free man!") and I start testing the library
4. Find out the company I downloaded the library from (You can only download from their US based, English site) had partners in my (Non-English speaking) country so I got the sales guy speaking to me in a different language than what I expected (or wanted).
5. Asked to be put in touch with an English speaker because I had some technical questions.
6. (wait 1 days) Get an English speaker, ask some questions, get told they will be passed to technical guys
7. (wait 2 days) Get replies.
8. Ask about how I get the different library versions. Get told I have to re-do the ENTIRE process from step 1 just to get a different version of the library due to "Legal reasons".
So, it took 2 days just to get my hands on the library for testing and being told that I have to jump through more hoops just to get different versions.
Compare with the open source library:
1. go to sourceforge and download the library for any OS and start playing with it in about...oooh, 5 minutes.
2. Want to try a the library on a different OS? another 5 minutes.
3. Questions sent to the developer answered slightly faster due to not having to go through sales guy (although to be honest this was not a huge difference in response time).
The hassle of getting my hands on the commercial library soured me on the whole idea of using that company. If just getting an evaluation license is such an arse I do not see us having a happy relationship with the company had we bought the license.
--
On a side-note. I recently had to bug fusion-io because they had their webinars behind a registration wall. Really? You put your marketing information behind a closed door? I am researching your technology and I don't want to have to sign up to yet another site just to see some information.(Although to be fair they fixed this quite quickly after I had a moan at them on twitter)
Getting my hands on one commercial library for testing was like pulling teeth.
1. Register for download which requires filling in loads of company information before being given access to a download.
2. Download the trial library (Only allowed to download either windows 32 bit, windows 64 bit, linux 32 bit or linux 64 bit..want more than one? tough)
3. (Wait 2 days) Sales guy sends me licence file (Forwarding the Salesforce "You have a new lead!" email no less which really annoyed me, "I am not a lead, I am a free man!") and I start testing the library
4. Find out the company I downloaded the library from (You can only download from their US based, English site) had partners in my (Non-English speaking) country so I got the sales guy speaking to me in a different language than what I expected (or wanted).
5. Asked to be put in touch with an English speaker because I had some technical questions.
6. (wait 1 days) Get an English speaker, ask some questions, get told they will be passed to technical guys
7. (wait 2 days) Get replies.
8. Ask about how I get the different library versions. Get told I have to re-do the ENTIRE process from step 1 just to get a different version of the library due to "Legal reasons".
So, it took 2 days just to get my hands on the library for testing and being told that I have to jump through more hoops just to get different versions.
Compare with the open source library:
1. go to sourceforge and download the library for any OS and start playing with it in about...oooh, 5 minutes.
2. Want to try a the library on a different OS? another 5 minutes.
3. Questions sent to the developer answered slightly faster due to not having to go through sales guy (although to be honest this was not a huge difference in response time).
The hassle of getting my hands on the commercial library soured me on the whole idea of using that company. If just getting an evaluation license is such an arse I do not see us having a happy relationship with the company had we bought the license.
--
On a side-note. I recently had to bug fusion-io because they had their webinars behind a registration wall. Really? You put your marketing information behind a closed door? I am researching your technology and I don't want to have to sign up to yet another site just to see some information.(Although to be fair they fixed this quite quickly after I had a moan at them on twitter)
> Practically everyone who’s paying for software is doing so through an app store
And how well's that working for them?
• All of the revenue for the thousands of vendors in the Apple App Store together for 2011: $3.6 billion
• Oracle's revenue alone for 2011: $36 billion
Notice that decimal point there? There's a reason it's in a different place. I don't like the enterprise sales process – being on either side of it, and I have to be on both at times. But the reason I'll do it is because our customers demand it and folks at that level, when a deal closes, pay enough to make it worth it.
It's the same on payment methods, actually. We got dragged, grudgingly, by our enterprise customers to allow paying by purchase order / ACH because that's how their purchasing departments expect to do things. It's not like we were going to tell them, "no".
And how well's that working for them?
• All of the revenue for the thousands of vendors in the Apple App Store together for 2011: $3.6 billion
• Oracle's revenue alone for 2011: $36 billion
Notice that decimal point there? There's a reason it's in a different place. I don't like the enterprise sales process – being on either side of it, and I have to be on both at times. But the reason I'll do it is because our customers demand it and folks at that level, when a deal closes, pay enough to make it worth it.
It's the same on payment methods, actually. We got dragged, grudgingly, by our enterprise customers to allow paying by purchase order / ACH because that's how their purchasing departments expect to do things. It's not like we were going to tell them, "no".
• All of the revenue for the thousands of vendors in the Apple App Store together for 2011: $3.6 billion • Oracle's revenue alone for 2011: $36 billion
Notice that decimal point there? There's a reason it's in a different place.
Yeah. How about because Oracle is a 30 year old business, whereas the Apple App Store is a one year old new market that came out of thin air? What's the non Apple App Store Mac software sales revenue for the same time the Apple App Store is in operation? That'a fairer comparison.
Also, how would the Apple App Store revenue be if they followed the Oracle sales process --call us to give you a price, etc? That would also be an interesting number.
But the reason I'll do it is because our customers demand it and folks at that level, when a deal closes, pay enough to make it worth it.
ie: la la la la, it's how it always been done, we don't need to look at the process, la la la la la, talk to the hand.
Yeah. How about because Oracle is a 30 year old business, whereas the Apple App Store is a one year old new market that came out of thin air? What's the non Apple App Store Mac software sales revenue for the same time the Apple App Store is in operation? That'a fairer comparison.
Also, how would the Apple App Store revenue be if they followed the Oracle sales process --call us to give you a price, etc? That would also be an interesting number.
But the reason I'll do it is because our customers demand it and folks at that level, when a deal closes, pay enough to make it worth it.
ie: la la la la, it's how it always been done, we don't need to look at the process, la la la la la, talk to the hand.
The app store is 3.5 years old, not one, and has been so successful that the original poster mentioned that "practically everyone buying software does it that way."
Nobody is suggesting that the app store should sell software the way that Oracle does. In fact, the point was exactly the opposite: that there's a reason that software is sold differently in different price ranges. And the reason for that is that customers expect it that way.
Some vendors may be bold enough to tell their customers to get bent and that if they want to buy their software they have to do it the way the vendor tells them to. Most of them will go out of business as a result. Ignoring your customers is rarely a good way to sell to them.
What usually happens is that we see segmentation that's pretty close to what's described in the original post: non-enterprise software is sold via a transparent process and aims for scale by selling to small and medium sized customers. The transparency is a business requirement: you can't invest $10000 of a salesperson's salary into selling something for $99/month. Enterprise sales run with enterprise processes because enterprise customers demand that it work that way. The point here is that these processes aren't ordained by vendors, but by customers, and the economics around the deal size.
For vendors that are focused on the enterprise, usually, they're not super concerned about losing the folks on the low end (just like SMB product sales aren't worried about losing enterprise customers). Usually the folks that are frustrated are because they're in one category and trying to buy from the other.
Nobody is suggesting that the app store should sell software the way that Oracle does. In fact, the point was exactly the opposite: that there's a reason that software is sold differently in different price ranges. And the reason for that is that customers expect it that way.
Some vendors may be bold enough to tell their customers to get bent and that if they want to buy their software they have to do it the way the vendor tells them to. Most of them will go out of business as a result. Ignoring your customers is rarely a good way to sell to them.
What usually happens is that we see segmentation that's pretty close to what's described in the original post: non-enterprise software is sold via a transparent process and aims for scale by selling to small and medium sized customers. The transparency is a business requirement: you can't invest $10000 of a salesperson's salary into selling something for $99/month. Enterprise sales run with enterprise processes because enterprise customers demand that it work that way. The point here is that these processes aren't ordained by vendors, but by customers, and the economics around the deal size.
For vendors that are focused on the enterprise, usually, they're not super concerned about losing the folks on the low end (just like SMB product sales aren't worried about losing enterprise customers). Usually the folks that are frustrated are because they're in one category and trying to buy from the other.
>> Practically everyone who’s paying for software is doing so through an app store
I think that software developers that eat, sleep, drink, breathe the Apple / mobile world need to be careful not to let this define their worldview of the software market. As big as the Apple / mobile market is, it's still just a small piece of the overall pie.
> And how well's that working for them?
Although I think the premise is wrong, but Al3x has a lot of valid points. There's a huge gulf between app store apps and enterprise products like Oracle. There are still a lot of companies in the B2B market that don't put pricing on their sites - even when their products aren't that expensive. Worse yet, some don't show any viable means of buying their product on the web site - not just "plans and pricing" but no clear "how to buy", etc. The visitor is expected to divine that they need to call the company. When I see a site like that I assume that it's a "if you don't want to contact us, you can't afford us" filter.
I think that software developers that eat, sleep, drink, breathe the Apple / mobile world need to be careful not to let this define their worldview of the software market. As big as the Apple / mobile market is, it's still just a small piece of the overall pie.
> And how well's that working for them?
Although I think the premise is wrong, but Al3x has a lot of valid points. There's a huge gulf between app store apps and enterprise products like Oracle. There are still a lot of companies in the B2B market that don't put pricing on their sites - even when their products aren't that expensive. Worse yet, some don't show any viable means of buying their product on the web site - not just "plans and pricing" but no clear "how to buy", etc. The visitor is expected to divine that they need to call the company. When I see a site like that I assume that it's a "if you don't want to contact us, you can't afford us" filter.
I just bought a new pm tool for work on iPad first and then the desktop. I chose it because it was developed iPad first, and the Mac version is a follow on. I'm not suggesting I'm typical, just one data point.
"Shut up and take my money!" applies at both ends of the spectrum. If a hundred thousand people want to give you $10 through an app store, it might make sense to figure out how to make that possible. If one person wants to give you a million dollars using an ACH transfer or through gold doubloons, you should probably figure out how to make that possible too.
"the opposite is also true" - Derek Sivers
Test.
It'd probably be best to serve a company to be able to test whether or not it serves you best to force customers into a hand held sales process or let everything remain DIY.
I've created a ton of self serve from the get go.
For example: In one thing, we have so many tire kickers startup their site and do their thing, but then we find out, that they completely screw up how to even get started. It might be we just haven't figured out how to design it better. But we've been designing it and iterating on it for years. It's simply something that's a bit hard to understand until someone explains it in words. And since people tend to hate reading and skip the manual, without knowing what's going on, they screw up, and think the product doesn't work. So the solution to that might just be "lets force them into a process so we can make sure they have the best startup experience possible, and we'll be more successful with more sales". That could very well be an outcome. But you never know unless you split test that sales/conversion process.
Test.
It'd probably be best to serve a company to be able to test whether or not it serves you best to force customers into a hand held sales process or let everything remain DIY.
I've created a ton of self serve from the get go.
For example: In one thing, we have so many tire kickers startup their site and do their thing, but then we find out, that they completely screw up how to even get started. It might be we just haven't figured out how to design it better. But we've been designing it and iterating on it for years. It's simply something that's a bit hard to understand until someone explains it in words. And since people tend to hate reading and skip the manual, without knowing what's going on, they screw up, and think the product doesn't work. So the solution to that might just be "lets force them into a process so we can make sure they have the best startup experience possible, and we'll be more successful with more sales". That could very well be an outcome. But you never know unless you split test that sales/conversion process.
Don't make pretentious statements like, "Get ready to leave your bank" before telling me how you solve any of my problems. It's almost insulting.
> Practically everyone who’s paying for software is doing so through an app store
I wrote about 'The Other App Store' (organic search) on similar lines - http://blog.roveb.com/post/12003627967/the-other-app-store
I wrote about 'The Other App Store' (organic search) on similar lines - http://blog.roveb.com/post/12003627967/the-other-app-store
The truth is, most customers or end users for Big Software aren't capable of handling the process of researching, trying, deciding, convincing higher ups, negotiating, designing, implementing (or finding an integrator), and supporting it themselves.
If they think they are, there is an astronomically high chance something will be wrong. And you know who takes the blame for that? The company with the logo on the software that doesn't work right. That and the guy who did it wrong. The argument scales as the software and customer does, but it's still a truth. Unless your software is dead simple, if you give people enough rope they will cause problems. That prevents the company from more opportunities, makes the customer's life difficult, etc.
The solution to this is to be hands on as much as possible before things are implemented. Properly done, it's mutually beneficial spent time. It would be logical to compare the complexity of the product solution (see steps above) to the amount of pre-sales steps required.
Disclosure: Pre-sales engineer for big software/hardware
If they think they are, there is an astronomically high chance something will be wrong. And you know who takes the blame for that? The company with the logo on the software that doesn't work right. That and the guy who did it wrong. The argument scales as the software and customer does, but it's still a truth. Unless your software is dead simple, if you give people enough rope they will cause problems. That prevents the company from more opportunities, makes the customer's life difficult, etc.
The solution to this is to be hands on as much as possible before things are implemented. Properly done, it's mutually beneficial spent time. It would be logical to compare the complexity of the product solution (see steps above) to the amount of pre-sales steps required.
Disclosure: Pre-sales engineer for big software/hardware
Eloqua does every single one of the the things on the list of 'wrongs' here. It was one of the worst purchasing experiences of my life, they practically talked me OUT of the service.
> I can find and talk to your other customers basically instantly in order to determine what they paid for your product and if they’re getting the value they expected from it. I will do this.
The joke is, quite a few enterprise vendors will ask you to sign some sort of NDA before they'll even show you a demo. And of course you'll pay before ever having tried the software. "Trials" – are you mad?
The joke is, quite a few enterprise vendors will ask you to sign some sort of NDA before they'll even show you a demo. And of course you'll pay before ever having tried the software. "Trials" – are you mad?
> we occasionally try commercial software. Mostly, we don’t end up buying it
Given that, I'm not sure why I should pay too much attention to the rest of the post. I'd rather take advice from people who successfully sell a lot of software or otherwise have experience in buying it.
> Practically everyone who’s paying for software is doing so through an app store
This is a very myopic view, though unsurprising given the previous disclaimer.
Besides the enterprise "shrink-wrapped" software market (see wheels commment), there's also a huge market for custom software.
Given that, I'm not sure why I should pay too much attention to the rest of the post. I'd rather take advice from people who successfully sell a lot of software or otherwise have experience in buying it.
> Practically everyone who’s paying for software is doing so through an app store
This is a very myopic view, though unsurprising given the previous disclaimer.
Besides the enterprise "shrink-wrapped" software market (see wheels commment), there's also a huge market for custom software.
I know it's a minor thing but:
> Heck, even free/open software people have an app > store these days
Little off the cuff remarks can expose ignorance quickly. Not something you want to do when trying to convince your readers of a more complex point.
It also makes the reader wonder what else you just threw in there because it sounded kinda right and you maybe heard it somewhere.
If you couldn't get that little thing right, I have so much less trust when I get to a part of the post that I don't know as much about.
> Heck, even free/open software people have an app > store these days
Little off the cuff remarks can expose ignorance quickly. Not something you want to do when trying to convince your readers of a more complex point.
It also makes the reader wonder what else you just threw in there because it sounded kinda right and you maybe heard it somewhere.
If you couldn't get that little thing right, I have so much less trust when I get to a part of the post that I don't know as much about.
Ok, just read this and absolutely have to comment, since I used to work for a telcom services agent. I learned there that where consumer services (low monthly recurring cost) could be sold online sight unseen, customers requiring business-level services (high monthly recurring cost) wanted more handholding, more discussion, and assumed there would be more paperwork. We actually tried to provide them with instant pricing on T1s, and sales dropped considerably. This is the story in almost anything, and its the reason cars and houses are still sold primarily by people, not websites. Websites may provide the in, but people close the larger deals better in the current day and age.
Enterprise software purchasing is pretty broken from both sides, but the vendors make tons of money because of it and the managers who do the purchasing often don't care.
Part of the problem Alex is seeing (and I've seen) is that the startup/small business segment just isn't that big, and vendors are usually fine with ignoring it and losing out on revenue. I do a lot of stuff on the side and have tried to buy licenses for some enterprise products, and even mid-sized vendors aren't really interested in talking to me. Large vendors like Oracle and IBM are heavily optimized toward selling to big businesses who need a purchasing process to take months and aren't as sensitive to price. The App Store model is 99%+ consumer-oriented.
Unfortunately, a lot of startups and small Enterprise vendors end up recruiting sales and marketing people who have been successful at larger vendors, so the same practices get implemented.
I blame this mostly on purchasing practices that are largely centered around managers mitigating risk. The risk they are most interested in mitigating is the risk that they'll get fired for making (or approving) a bad purchasing decision. Vendors are happy to play along, since it usually means they can make more money out of the deal.
Part of the problem Alex is seeing (and I've seen) is that the startup/small business segment just isn't that big, and vendors are usually fine with ignoring it and losing out on revenue. I do a lot of stuff on the side and have tried to buy licenses for some enterprise products, and even mid-sized vendors aren't really interested in talking to me. Large vendors like Oracle and IBM are heavily optimized toward selling to big businesses who need a purchasing process to take months and aren't as sensitive to price. The App Store model is 99%+ consumer-oriented.
Unfortunately, a lot of startups and small Enterprise vendors end up recruiting sales and marketing people who have been successful at larger vendors, so the same practices get implemented.
I blame this mostly on purchasing practices that are largely centered around managers mitigating risk. The risk they are most interested in mitigating is the risk that they'll get fired for making (or approving) a bad purchasing decision. Vendors are happy to play along, since it usually means they can make more money out of the deal.
> Heck, even free/open software people have an app store these days.
Wasn't open source the first mover here? apt has been around for.. 13 years?
Wasn't open source the first mover here? apt has been around for.. 13 years?
But, then again, I'm thinking more in terms of "companies who are willing to host their own software, want 'best of breed' solutions, have extensive integration requirements," etc. Sure Google Docs is fine for plenty of firms, but there are firms who want an DMS that integrates with Active Directory, ties into their workflow / approval systems, etc.
I guess the point is that "enterprise software" covers a pretty broad swathe of scenarios and situations...