What is the best way to sell enterprise software?
What do you think are the pros and cons of each of these methods:
1) Promoting Features the client will find advantageous
2) Devising Operational Solutions to solve a business problem
3) Advancing Strategic Enablers to change the way the client does business
Are there appropriate situations for using one method over the others? What alternate approaches might be helpful in facilitating software sales?
I intend to incorporate the answers into an article on my Software Sales Enablement column at http://greggnichols.com/s3blog. Thanks for your help.
1) Promoting Features the client will find advantageous
2) Devising Operational Solutions to solve a business problem
3) Advancing Strategic Enablers to change the way the client does business
Are there appropriate situations for using one method over the others? What alternate approaches might be helpful in facilitating software sales?
I intend to incorporate the answers into an article on my Software Sales Enablement column at http://greggnichols.com/s3blog. Thanks for your help.
Clarification added August 4, 2008:
Thanks for these answers. I understand that it's critical for a salesperson to speak to the customer's point of view: to relate "what's in it for them, " to communicate strategically-aligned ROI, and to work from a foundation of trust.
From a sales enablement standpoint, the selling vendor wants to estimate Revenue Potential (how big is the sale, when will it close) and Cost of Sales (how many people are needed, what kind of expertise should we assign, how many meetings will there be, etc.). The vendor wants to balance these objectives on every sales pursuit, which can get complicated without a simplifying strategy.
That strategy is what I’m after: using these three approaches as a "strategy map" (or some other, better ones) I'd like to provide a vendor's sales enablement personnel a way to effectively collaborate around each sales pursuit. Assume that the better they collaborate, the lower the Cost of Sales (from my experience, there's a high correlation). So, to clarify:
• Are there times when a simple approach (like #1) is all that is needed? When further resource commitment is wasted as it increases Cost of Sales without expanding Revenue Potential?
• When is a deeper approach (like #3) the only way to succeed?
• How do you identify which situation you're in? What are the pros/cons of each situation and approach?
As promised, I'll write an article summarizing my views. Thanks again for your answers.
From a sales enablement standpoint, the selling vendor wants to estimate Revenue Potential (how big is the sale, when will it close) and Cost of Sales (how many people are needed, what kind of expertise should we assign, how many meetings will there be, etc.). The vendor wants to balance these objectives on every sales pursuit, which can get complicated without a simplifying strategy.
That strategy is what I’m after: using these three approaches as a "strategy map" (or some other, better ones) I'd like to provide a vendor's sales enablement personnel a way to effectively collaborate around each sales pursuit. Assume that the better they collaborate, the lower the Cost of Sales (from my experience, there's a high correlation). So, to clarify:
• Are there times when a simple approach (like #1) is all that is needed? When further resource commitment is wasted as it increases Cost of Sales without expanding Revenue Potential?
• When is a deeper approach (like #3) the only way to succeed?
• How do you identify which situation you're in? What are the pros/cons of each situation and approach?
As promised, I'll write an article summarizing my views. Thanks again for your answers.
posted July 29, 2008 in Sales Techniques | Closed
Answers (6)
Gregg...
For this type of a product I am not a big fan of your choices and would suggest another alternative.
Enterprise software is typically a significant investment and can definitely be tied to the bottom line of a company. ROI is the strategic objective of both the CEO and CFO.
I believe the best approach is not to sell the product at all, but to present to these two executives a "profit improvement proposal" in line with the strategic objectives of their jobs. The production or profits (ROI).
It would be hard to explain the whole consultative selling process in the short space available here, so I will point you and the readers to the original source.
Mack Hanan first wrote his book "Consultative Selling" in the 70's and it is now in its 8ty or 9th edition. Many in sales have misused this term "consultative selling" but it is essentially the process I described above.
You make a "profit improvement proposal" to the CEO or CFO -- that proposal is completely focused on the ROI you can provide to the company with your project. It is based on benchmarks and results, NOT on products, features, advantages, or benefits of same.
I believe this is the most powerful of the sales methods among the many.
Be forewarned this is not a book for the faint of heart. Unlike the easy reading of its peers, such as Solution or SPIN Selling, this is closer to chemistry being a complex presentation of the ROI expectations and return of the project.
I hope this helps.
For this type of a product I am not a big fan of your choices and would suggest another alternative.
Enterprise software is typically a significant investment and can definitely be tied to the bottom line of a company. ROI is the strategic objective of both the CEO and CFO.
I believe the best approach is not to sell the product at all, but to present to these two executives a "profit improvement proposal" in line with the strategic objectives of their jobs. The production or profits (ROI).
It would be hard to explain the whole consultative selling process in the short space available here, so I will point you and the readers to the original source.
Mack Hanan first wrote his book "Consultative Selling" in the 70's and it is now in its 8ty or 9th edition. Many in sales have misused this term "consultative selling" but it is essentially the process I described above.
You make a "profit improvement proposal" to the CEO or CFO -- that proposal is completely focused on the ROI you can provide to the company with your project. It is based on benchmarks and results, NOT on products, features, advantages, or benefits of same.
I believe this is the most powerful of the sales methods among the many.
Be forewarned this is not a book for the faint of heart. Unlike the easy reading of its peers, such as Solution or SPIN Selling, this is closer to chemistry being a complex presentation of the ROI expectations and return of the project.
I hope this helps.
posted July 29, 2008
Assuming a "qualified opportunity", let me start by making the following points:
1) Not all enterprise solutions are the same. Some are commodities and some are strategic. So, highlighting differentiating features can be a critical conversation with the prospect.
2) Each prospect is motivated (or discouraged) by different triggers based on their performance, strategies, organizational priorities and culture... Positioning a solution as addressing a specific pain point or enabling a competitive capability can also be a very important conversation.
3) There are also different stages of the sales cycle. Enterprise customers follow a common decision path (including a vendor short-list, PoC/PoT, ...) in their evaluations... So, you may need to apply all approaches.
So, in summary, I believe any of the approaches can be appropriate depending on a broader set of variables that involve the solution, industry/market, specific customer, and the sales cycle (not to forget the vendor's general go-to-market model...)
As we all know, it is absolutely imperative to research the prospect and their repesctive industry diligently, so that you can articulate the value proposition in a lingo they can understand...
1) Not all enterprise solutions are the same. Some are commodities and some are strategic. So, highlighting differentiating features can be a critical conversation with the prospect.
2) Each prospect is motivated (or discouraged) by different triggers based on their performance, strategies, organizational priorities and culture... Positioning a solution as addressing a specific pain point or enabling a competitive capability can also be a very important conversation.
3) There are also different stages of the sales cycle. Enterprise customers follow a common decision path (including a vendor short-list, PoC/PoT, ...) in their evaluations... So, you may need to apply all approaches.
So, in summary, I believe any of the approaches can be appropriate depending on a broader set of variables that involve the solution, industry/market, specific customer, and the sales cycle (not to forget the vendor's general go-to-market model...)
As we all know, it is absolutely imperative to research the prospect and their repesctive industry diligently, so that you can articulate the value proposition in a lingo they can understand...
posted July 29, 2008
Hi Gregg,
I sell software as well. Not for a long time though. But I sold all kinds of things in the past. The thing I noticed when selling this kind of software is either be at the place at the right time, then you sell pretty quick or (and this is most of the times) you got to invest a lot of time in it. Building up a relationship with your prospects.
The best way is the way my colleague does it. Building up up strong network and getting your costumers to give you new leads. It's because they know their bussiness better then you do. So they can tell you about the opportunities.
Hope it helps.
I sell software as well. Not for a long time though. But I sold all kinds of things in the past. The thing I noticed when selling this kind of software is either be at the place at the right time, then you sell pretty quick or (and this is most of the times) you got to invest a lot of time in it. Building up a relationship with your prospects.
The best way is the way my colleague does it. Building up up strong network and getting your costumers to give you new leads. It's because they know their bussiness better then you do. So they can tell you about the opportunities.
Hope it helps.
posted July 30, 2008
Gregg,
In selling enterprise software, the underlying technique should always be, "what's in it for them?" By definition, a sales person needs to be nimble and adjust the strategy to the particular customer at hand. What's their pain? What's the reason they NEED your software?
Looking for a single strategy isn't going to work. Selling enterprise software is not like selling widgets. Each prospect must be handled in a way that you understand why they need your software, understand the problem you are solving, and then construct a strategy that makes sense for that prospect.
In my experience, when you approach it as a consultative sale, you ultimately get a deeper relationship that lasts years and repeat sales. The prospect doesn't feel "sold" and they honestly think that what you are bringing to them is something that is of value - and you aren't trying to force on them features and products they don't need.
The reason the customer may buy is often because of ROI, as Flyn suggests - but simply looking at the dollars may not bring in the entire picture. You need to understand the pain that the customer has that you solve. This may be a simplification of processes that bring efficiency to the company but don't drive bottom line results immediately.
When you do this, you often get a customer for life. When you focus on doing the right thing for the customer and not solely on your quota, you will be amazed how much money will follow it. I have consistently crushed my quota with this method and my teams have consistently crushed quota with this method.
In selling enterprise software, the underlying technique should always be, "what's in it for them?" By definition, a sales person needs to be nimble and adjust the strategy to the particular customer at hand. What's their pain? What's the reason they NEED your software?
Looking for a single strategy isn't going to work. Selling enterprise software is not like selling widgets. Each prospect must be handled in a way that you understand why they need your software, understand the problem you are solving, and then construct a strategy that makes sense for that prospect.
In my experience, when you approach it as a consultative sale, you ultimately get a deeper relationship that lasts years and repeat sales. The prospect doesn't feel "sold" and they honestly think that what you are bringing to them is something that is of value - and you aren't trying to force on them features and products they don't need.
The reason the customer may buy is often because of ROI, as Flyn suggests - but simply looking at the dollars may not bring in the entire picture. You need to understand the pain that the customer has that you solve. This may be a simplification of processes that bring efficiency to the company but don't drive bottom line results immediately.
When you do this, you often get a customer for life. When you focus on doing the right thing for the customer and not solely on your quota, you will be amazed how much money will follow it. I have consistently crushed my quota with this method and my teams have consistently crushed quota with this method.
Links:
posted July 30, 2008
There are many strategies to selling enterprise software and all of the ones you have listed are effective. In my mind its less about "the how you engage" and more about the "Why should I do business with you". At the end of the day in selling to the enterprise like selling in general, successful sales people lead their customers. In my mind this is simply taking customers to a mental state where (s)he can do something in both parties common interest, that is difficult, in spite of reservations or objections. Simply put leaders get things done through force of will, or through charisma. In my mind this sounds a lot like what a salesperson does in the sales process. A salesperson is required to get customers to commit significant dollars on difficult projects where the outcomes are uncertain and they often have internal reservations or objections that need to be overcome. Customers require leadership from their sales people. Without it they would not be able to make the decisions they need to inorder to move their organizations forward.
What differentiates leadership from a swindle though is that central part of the definition "in both parties interest". Its not leadership if you as the salesperson are not thinking equally about the benefit to your customer as well as your organization. Quickly what are somethings you can do, in order to become sell more enterprise software:
1. Gaze into the crystal ball for your customers. Show them a future that they can dream about that you can deliver on!
2. Subscribe to a set of standards and values upon which you will not compromise. And communicate them to your customers. Most importantly walk the talk.
3. Be honest. Without honesty there is no trust. Without trust there is no relationship. Without a relationship there is no sale.
4.Expect a lot from your customers. Hold your customers to a high standard. They will gladly rise to the challenge.
5. Listen! Leadership is about understanding. You cant understand your client without hearing their needs.
6. Be committed. Pursue your causes with verve. Believe in what you are doing, gain strength in the power of your conviction, be desciplined beyond understanding (in sales processes etc.), and ultimately subscribe to the motto "the buck stops here".
At the end of the day its less about the tactics of selling (pick a formula and apply it religiously) and more about the mission (IMHO).
What differentiates leadership from a swindle though is that central part of the definition "in both parties interest". Its not leadership if you as the salesperson are not thinking equally about the benefit to your customer as well as your organization. Quickly what are somethings you can do, in order to become sell more enterprise software:
1. Gaze into the crystal ball for your customers. Show them a future that they can dream about that you can deliver on!
2. Subscribe to a set of standards and values upon which you will not compromise. And communicate them to your customers. Most importantly walk the talk.
3. Be honest. Without honesty there is no trust. Without trust there is no relationship. Without a relationship there is no sale.
4.Expect a lot from your customers. Hold your customers to a high standard. They will gladly rise to the challenge.
5. Listen! Leadership is about understanding. You cant understand your client without hearing their needs.
6. Be committed. Pursue your causes with verve. Believe in what you are doing, gain strength in the power of your conviction, be desciplined beyond understanding (in sales processes etc.), and ultimately subscribe to the motto "the buck stops here".
At the end of the day its less about the tactics of selling (pick a formula and apply it religiously) and more about the mission (IMHO).
posted July 31, 2008
Gregg,
You already have some excellent answers. As stated prior, there are many flavors of enterprise software - purchasing a transactional system could be treated as a commodity and there will be a fairly regimented approach to its acquisition by a company (ala a 5000 line RFP and intense demonstrations etc).
There is also a class of enterprise software that absolutely requires missionary, consultative selling. There wont typically be a budget for it or any awareness of such software being available inside the mind of a prospect. This is where a sales guy needs to go in and find the latent pain and the executive or executives that feel this pain as it is espoused in their MBOs tied to the Company P+L. This is where consultative value based selling is perhaps the only way to go, and I am not talking about a spreadsheet that cranks out an ROI (though this plays a critical part) - this approach requires cultivating a relationship with the prospect at the right level in order to understand and reveal the latent pain in a logical way and running a process that ultimately leads to the prospect coming to the realization that this pain can be addressed via your solution and is directly tied to dollars at the bottom line.
I find that this approach, though lengthy, is the most successful and rewarding (both for the company and for the sales rep) and will enable true realization of the market potential for your software
best,
Srikant
You already have some excellent answers. As stated prior, there are many flavors of enterprise software - purchasing a transactional system could be treated as a commodity and there will be a fairly regimented approach to its acquisition by a company (ala a 5000 line RFP and intense demonstrations etc).
There is also a class of enterprise software that absolutely requires missionary, consultative selling. There wont typically be a budget for it or any awareness of such software being available inside the mind of a prospect. This is where a sales guy needs to go in and find the latent pain and the executive or executives that feel this pain as it is espoused in their MBOs tied to the Company P+L. This is where consultative value based selling is perhaps the only way to go, and I am not talking about a spreadsheet that cranks out an ROI (though this plays a critical part) - this approach requires cultivating a relationship with the prospect at the right level in order to understand and reveal the latent pain in a logical way and running a process that ultimately leads to the prospect coming to the realization that this pain can be addressed via your solution and is directly tied to dollars at the bottom line.
I find that this approach, though lengthy, is the most successful and rewarding (both for the company and for the sales rep) and will enable true realization of the market potential for your software
best,
Srikant
posted July 31, 2008
No comments:
Post a Comment