29 May 2008View Comments
Selling software is hard work. It is a complex task and the product’s price is usually large. Also, it is hard to find new customers, so you have to make the most of existing ones.
Under such circumstances, you would expect vendors to do their utmost to maximise the value of a sale and to keep their customers happy. But often that doesn’t happen.
I have seen both sides of the problem, as a consultant to software vendors and as a consultant to companies that need to buy software. Here’s an example of a typical recent scenario.
I want to spend money on IT – but the vendor will not co-operate. I would like a reporting package to bolt onto an accounting system.
Ideally, I would like to spend half an hour discussing what I want to do and for the vendor to say: “This is the option you need. Give us 24 hours and we will give you a quote.”
But I actually get a vague suggestion that one of three options might do the job, and that I should go away and think about my requirements. If they had probed at all, the vendor would have found out that I have a £15m revenue stream – so money will not be a major issue.
My client has been battling this problem for months. He wants help, and is willing to pay for it. In fact, he looks much more motivated to buy than the seller is to sell.
With better information I think my client could make an extra million a year on top of his £15m revenue stream. Who cares what it costs? Just give me the technology.
So we design sample reports and explain them to the vendor. Then the vendor sells us a little reporting tool for a modest amount of money.
We have lost out because we could have solved the problem much sooner with a half-hour discussion at the original meeting.
The vendor has lost out because, had it demonstrated a clear understanding of the problem, we would happily have paid a lot more money to get it solved.
So, what should you expect from your supplier? Marketing materials are often liberally sprinkled with words such as service and solution. Make sure suppliers know what such terms mean for your own sales and pricing strategies.
When it comes to the sales process, make sure your supplier takes more responsibility. They need to tell you, with confidence, exactly what must be done to solve their problem.
On pricing, forget list prices and daily rates for consultancy. Suppliers must describe the value of their technology.
And make sure they recognise that they are being handed a golden opportunity to do something that will radically help your business. When you seize that opportunity, price becomes irrelevant and everybody wins.
Alastair Dryburgh is chief executive of Akenhurst Consultants
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