“We can’t
afford to spend time educating our customers.” This was the mantra heard in
many enterprise software sales reviews during the deal-happy nineties, as VP
Sales were urging their people to close more sales as quickly possible. Guess what?
Those days are over. If you’re
in enterprise software today, you
have to spend the time
educating your customers.
Most
enterprise software is heavily dependent on the process in which it is being
used. There is no point in implementing
new software if the process is not adapted to take advantage of new
capabilities. Just like you don’t need a
spreadsheet if you continue to use a calculator to add up the numbers. Process issues are the most common reason
for software implementation failure and a major hurdle to sales.
Why is it
such a big issue?
We are
all creatures of habit. Recently, I have been involved in
a pilot implementation of marketing library software. The software works great and does almost anything you could ask
for. Still, when salespeople look for a
piece of collateral, they start out by sending the all familiar “do we have
something about…” e-mail. When directed
to the marketing library, they can easily find what they’re looking for; yet,
they need to be constantly reminded to go there.
Changing
an existing process is a pain. On a personal level, many people
are simply afraid of change. Getting a
group of people, often from multiple departments, to agree on a new process
requires leadership and a common vision.
It also takes time.
For a
large organization, training people to implement a new process is time
consuming and costly. If your customer
has to spend just one day of training for each user of the new software they
purchased from you, the cost of training can easily reach anywhere from twenty
to two hundred percent of the software license cost.
People
do not know what the new process should look like. It
is much easier to complain about the existing process than to come up with a
better one. Anybody can see that
running out of stock for a product that is currently advertised front and
center is bad business. If your
software can support a process which will eliminate or minimize such instances,
you can save your customer a lot of money and aggravation. Unfortunately, no matter how great your
software is, designing a process that will ensure coordination of promotions
with product availability is not that easy.
The
difficulty of implementing a process change has direct implications on your
sales. I often ask software executives
about the reasons they lose deals. The
common answer is that most sales are not lost to the competition but to the
infamous “doing nothing.” As a matter
of fact, opportunities are rarely recorded as a loss; rather, they are just
delayed and eventually evaporate.
Process paralysis is a major reason for this phenomenon.
So what
does it mean for you? While you could
wait for your customers to figure things out on their own, you would be much
better positioned to be their solution of choice if you took the initiative to
help them get the process right.
What can
you do to help your prospects and customers?
Marketing:
offer your customers opportunities to learn about the process
Create a
knowledge sharing community for your customers. Case studies, webinars, user group meetings – these are all great
opportunities for your customers to learn from each other, from industry
experts, and from your own company’s experts.
It is also a great opportunity for your employees to learn more and
become process experts in their field.
If
possible, give your customers the opportunity to learn by trying. In many cases, the software and the process
are so tightly coupled, that it is difficult for the people involved to envision
the new process without hands-on experience with the software.
Sales:
it’s really consulting
Consultative
selling has been around for years. It
is time to take it up a notch. Your
sales teams have to become agents of change, helping your customers create and
articulate the vision for a new way of doing business. I am saying teams because it usually takes
more than one person to cover the range of knowledge that is required to affect
any process change.
Your
early adopter customers have a vision for change; they look for you to be a
partner in implementing their vision.
Later-stage customers are more reluctant to change existing
processes. They look for proven
processes and blueprints for success.
Either way, you have to develop and deliver process expertise.
To do so,
you need to hire the right people to begin with. Then you have to give them the time to learn and establish
credibility with customers before you can expect them to close sales. You should expect and measure incremental
evidence of progress; but given enterprise software sales cycles, it could be a
full year before you see closed deals.
To foster expertise, you would be better off splitting your territories
by process and/or industry than by geography.
Professional
Services: become your own system integrator
In a
recent speech at
Software 2004, Romesh
Wadhwani, chairman of the Symphony Technology Group, proposed that enterprise software
companies would increasingly replace system integrators as the primary
implementers of their software. I am
not sure it is necessarily an “either or” situation – I believe both system
integrators and software vendors can play a role in implementation – but I
agree that a software vendor must be directly involved in customer deployment
to maintain first hand experience in the processes involved.
Account
Management: be consumed with customer success
Your
ability to land new deals is highly dependent on the success of your existing customers. You want your customers to be more than just
references; you want to turn them into advocates of a process change and
evangelists of your solution. You want
them to demonstrate tangible benefits that will make your prospects envy on one
hand, confident in your ability to deliver on the other hand.
Yet, in
most software organizations, nobody is compensated based on customer success
(this is not necessarily unique to software companies). Success in implementing change does not
usually come overnight. Allocating
resources to work with your customers to ensure demonstrable success is a
fundamental change that software companies need to make. You can read more about it in our article “
Is Your Customer's Success an Afterthought?”
The
Bottom Line
Instituting
process expertise and investing in customer education is not cheap. The cost of
not making the
investment is probably higher: expect more sales to evaporate as a result of
process paralysis, implementations cycles to go longer, and references to be
lukewarm about your product.
I’m
interested in your thoughts –
how does your
company manage the need for customer education?
