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How Not To Sell Software in 2012

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Re: How Not To Sell Software in 2012

#31

Post by Hume »

bliss wrote: post #18
unreal37 wrote: 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…

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 sil…

Do you know the price point at which purchase orders predominate over credit cards for payment? I'm launching a product soon and I plan to price it at $6k per year.

I assume that the software will be paid for by PO but if anyone here has a different view, I'd like to hear from you.

Re: How Not To Sell Software in 2012

#33

Post by davyjones »

damoncali wrote: post #28
raganwald wrote: post #17

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...

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.

Re: How Not To Sell Software in 2012

#34

Post by alexro »

ErikRogneby wrote: post #16

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 sal…

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'?

Re: How Not To Sell Software in 2012

#35

Post by suhail »

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.

Re: How Not To Sell Software in 2012

#36

Post by wheels »

> 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".

Re: How Not To Sell Software in 2012

#37

Post by nate »

"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.

Re: How Not To Sell Software in 2012

#38

Post by nl »

pnathan wrote: post #21
raganwald wrote: post #17

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

If you are paying list price for those then you are doing it wrong

Re: How Not To Sell Software in 2012

#39

Post by Game_Ender »

damoncali wrote: post #28
raganwald wrote: post #17

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...

For a single license, you usually by many licenses for a CAD product so you can get above the $75k price.

Re: How Not To Sell Software in 2012

#40

Post by pavel_lishin »

patio11 wrote: post #14

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-t…

> "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?

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