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How Not To Sell Software in 2012

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Re: How Not To Sell Software in 2012

#21

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…

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

Re: How Not To Sell Software in 2012

#22
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.

Re: How Not To Sell Software in 2012

#23
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.

Re: How Not To Sell Software in 2012

#24
post #21

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…

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

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.

Re: How Not To Sell Software in 2012

#25
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.

Re: How Not To Sell Software in 2012

#26
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.

Re: How Not To Sell Software in 2012

#28

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…

Pretty much the entire CAD market is in that price range...

Re: How Not To Sell Software in 2012

#29
post #13
post #9

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 salesme…

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…

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.

Re: How Not To Sell Software in 2012

#30
post #15
post #5

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 wit…

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.

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