Monday, December 29, 2014

Land and Expand: The Importance of the Delta

No CFO will approve a major expansion of software without a clear understanding of the value equation.  The challenge, often, is that the people who bought the 1 or 2 seats of the original “Land” purchase generally don’t have the experience to uncover and communicate the value.  The vendor may be required to help the buyer with the process since many of these buyers have never orchestrated a large purchase. 

Buyers who go to their CFO’s with incomplete information are likely to be denied their request.  I’ve seen inexperienced managers present to their CFO’s with statements like, “We need a new sales process system; the old Excel system doesn’t really work…”

CFO responds, “Well, you’ve been using the Excel system for the past 5 years…  This doesn’t really seem compelling.”  [Rejected!]

Here’s a simple checklist (for the buyer) to help them with the purchasing process:

Critical Business Issue:  What over-arching objective or challenge are we [the customer organization] seeking to address?
Problems / Reasons:  What is getting in the way?  What systems or workflows are insufficient, and in what way? 
Specific Capabilities:  Here is the list of specific capabilities we are looking for in a vendor’s offering.
Delta:  This is the tangible value we expect to gain as a result of making the change – expressed in specific terms of time, people and/or money.
Critical Date:  The date by when we need to have a solution in place and driving force for that date.

Quick example:  A Director of Sales Operations of a large software company purchased a few licenses of a new sales process tool to try out, liked it, and now wants to deploy it across the full sales organization. Here’s what his summary checklist might look like:

Critical Business Issue:  Achieve 2015 sales revenue objectives; expand pipeline; reduce the number of “No Decision” outcomes.
Problems / Reasons:  Current sales process tool is an Excel application; hard to use, takes forever to roll-up; lots of errors and inaccuracies; actuals vs. forecast numbers rarely match.  Sales people hate it and reports are difficult to generate and distribute; sales managers are unable to accurately assess real opportunities vs. those that will likely end as “No Decision”.
Specific Capabilities:  Simple, fast, web-based entry and tracking of sales opportunities and process steps; clearly defined stages; simple checks on data and process accuracy; reports of weekly, monthly and quarterly forecasts, with highlighting of key projects and issues; rolling 3, 6, 9 and 12 month pipelines on per-rep and per-region basis.
Delta:  Reduce “No Decision” category results by 50%; increase overall revenues by 15% and 6-month pipeline by 25%.  Recover and redeploy 1.5 FTE currently consumed with the Excel system.
Critical Date:  February 13, 2015 for roll-out at 2015 sales kickoff event.

Now the case is much clearer:  The CFO knows why a new system is needed – what goals and objectives are at risk, what specifically what capabilities are needed, and (importantly) what value is expected as a result of implementation, as well as when (and why) implementation needs to take place.  The Delta – the value component – is key.  A CFO is much more likely to say “Yes” to this…!


[For more specific tips on uncovering the Delta, see my blog post on March 20, 2014 “Let’s Talk About Value – Uncovering the Delta”]

Monday, December 22, 2014

The REAL Buyer Stages...

Traditionally, vendors identify a set of Buyer Stages – the steps and thinking that a customer goes through en route to purchasing a product.  I think the traditional list is inaccurate and doesn’t reflect reality.  Here’s one example of the traditional list:

“Classically, there are four main stages:
- Awareness: Identify a business need;
- Consideration: Determine possible solutions;
- Research: Evaluate different solutions;
- Purchase: Select a solution and negotiate purchase.”

I’d suggest the following customer stages are more likely in buying enterprise software:

- Cluelessness:  the customer has no idea that he/she even has a problem…
- Semi-Awareness:  the customer realizes that there is a problem, but doesn’t care…
- Denial:  the customer prefers to ignore the problem and assume that it isn’t really an issue…
- Reluctance:  the customer agrees there is a problem, but wishes it would simply go away…
- Transference:  the customer blames another department/group/person/he/her customers for the problem and hopes they will take care of it…
- Acceptance:  the customer agrees that the problem is his/hers to solve…
- Cycling:  oops – “missed the budget cycle, guess we’ll have to wait until next year” (and maybe the problem with go away in the meantime)…
- Mandate:  senior management makes it a project and gives the customer a goal to solve the problem with an end-of-year deadline…
- Whining:  “I already have too much on my plate…”
- Delay:  “I’ll get to it later this year…”
- Sleep:  customer forgets about the problem for the next 10 months..
- Awareness:  customer realizes, 10 months later, that he/she needs to start working on solving the problem…
- Delegation:  customer forms a team of minions to define the problem and propose solutions…
- Bickering:  each team member proposes a different solution and defends said solutions in a life-or-death corporate struggle of power, intrigue, manipulation and warfare…
- First-Cut:  a set of three candidate vendor solutions are chosen…
- Research:  (by the vendors including, but not limited to, doing Discovery)…
- Vendors’ Presentations:  corporate overviews followed by product line overviews followed by infrastructure overviews followed by overview demos (oh god oh god no no no no no)…
- Deep Dive Vendors’ Presentations:  to an expanded set of players, repeat line above, but in four-part harmony…
- Proposals:  Vendor A:  “Pleeeeeeeeeeze be my customer….!”, Vendor B:  “Pleeeeeeeeeeze be my customer….!”, Vendor C:  “Pleeeeeeeeeeze be my customer….!”…
- Second-Cut:  one vendor removed, customer requests POC’s from the final two…
- POC 1:  three months of inactivity followed by one day trial, followed by “what’d you think?” from the vendor…
- POC 2:  three months of inactivity followed by one day trial, followed by “what’d you think?” from the vendor…
- No Decision:  both vendors are “OK”, but not “great”…
- Readjustment:  customer’s goals are reset for the next calendar year…
[Repeat from Delay as necessary…]
- Selection:  3-5 years later, a winning vendor is chosen…
- Negotiation:  customer agrees to price and terms; purchasing takes a piece, legal takes a piece, the CFO takes a piece; disgruntled players try to torpedo the deal…
- EOQ:  customer delays until December 30, negotiates an additional sizeable discount, plus training and implementation services “thrown in” for free…
- Purchase!  License agreement is back-dated to enable vendor to make his numbers; deal is signed December 35th.

[There are likely more stages, but this is a sufficient start – your add-ons are welcomed…!]

Of course, that is the set of stages for a seasoned veteran that has been with his/her company for many years.  Here are the stages for a newly hired VP or C-level Leader (yes this is cynical, but I believe we’ve all seen this happen!):

- Press Release:  new VP or C-Level Leader just hired!  
- Early Action!  he/she just came aboard and wants to establish presence through implementing a new sweeping program…
- Purchase:  buys the same system he/she bought at the previous company…
- Implementation:  rolls-out to team, followed swiftly by…
- Confusion:  things don’t work as expected…
- Blame:  fingers are pointed in all directions…
- Professional Services:  the vendor’s professional services team is called in to make things work as visualized by the Leader…
- Discovery:  an analysis of the customer’s people and processes reveals that the system will never work as desired – not now, not never…
- Sacking:  several middle managers and numerous staff are sacked, followed a few months later by…
- Resignation:  Leader resigns, citing “cultural differences”…
- Press Release from a different company:  new VP or C-Level Leader just hired!  
- Early Action!  [Rinse and repeat…]

Monday, December 15, 2014

Cold Calls - Do Vendors Research You Before Calling? (Nope)

I am amazed at how many vendors cold-call me, without doing ANY prior research on me or my company.  A little web searching (very little, frankly) would have revealed that I am NOT a good prospect for these vendors.  In spite of that, they call to talk about their products and services (“Hey, we’ve just had a new release and I want to tell you all about it!  It’s all about us, and nothing about you…”).  Most callers offer a demo of their offering, nearly right away – and very frequently offer a free trial or evaluation. 

I often take them up on their offers to see how their “sales” process operates and to stay up-to-speed with current products and services.  (I use “sales” in quotes because any opportunity that lists me or my company is HIGHLY likely to end as a “No Decision” – so sad!)

Typical triggers to receive this type of cold call, in my experience, include:

-          Signing up for a webinar
-          Downloading a paper or article from a vendor’s website
-          Having ever answered my telephone…

What’s been your experience? 


[I wonder how many of these cold calls are driven by “activity”-based metrics, such as “You need to make 20 calls and do 15 demos per day…”?  Sigh…]

Monday, December 8, 2014

Great Demo! and Stunningly Awful Demos Articles - What Have You Missed?

Hi All,

Here’s the current list of articles on demos in case you’ve missed any, organized by topic.  

They are available on this website the Articles page (www.SecondDerivative.com/Articles.html).  Each article has its own page and a link to a downloadable PDF version.  Feel free to forward them on to others, as well.

If you have ideas or suggestions for new articles, please let me know.  I’ll list a few candidates at the bottom – you can vote for the ones you’d like to see!

The “Stunningly Awful Demos” Series (a perennial favorite!)
Stunningly Awful Sales Tactics – The Future-Sales Prevention Team
Stunningly Awful Demo Communication – Unencrispening the Demo
Stunningly Awful Sales Kickoff Demos:  Selling to Your Sales Force – the Toughest Customer of All!
Stunningly Awful Demo Outcomes – Why Objections Shouldn't Need To Be Overcome
Stunningly Awful vs. Truly Terrific Competitive Differentiation – What, When and How
Stunningly Awful Demos – Two Words to Avoid
Stunningly Awful Web "Overview" Demos – The Gruesome Anatomy of a 1-Hour Web Overview
Stunningly Awful Demos – Insufficient Discovery
Stunningly Awful Demo Evolution – Have You Ever Seen Demos Get Shorter? 
Stunningly Awful Demos – The Great Demo! Top Ten List of What NOT To Do
Stunningly Awful Demos – Debilitating Demo Diseases
Stunningly Awful Demos – Debilitating Demo Diseases Additional Afflictions
Stunningly Awful Sales Prevention Demos
Stunningly Awful SaaS Demos – Lost in the Clouds
Stunningly Awful Remote Demos – The Top Ten List of Inflicting Pain at a Distance
Stunningly Awful Demo Situations – The Horror of Scripted Demos
Stunningly Awful Software Evaluations – A Strategy of Hope?
Stunningly Awful Demos Team Practices – Where 1 + 1 = 0

Great Demo! Core Concepts
Let's Talk About Value – Uncovering the Delta
Surprisingly Delectable Demos – Delightful Dining Analogies
Why Structure a Demo Like a News Article?
The Great Demo! Top Ten List
Stunningly Awful Demo Evolution – Have You Ever Seen Demos Get Shorter? 
Stunningly Awful Demos – The Great Demo! Top Ten List of What NOT To Do
Stunningly Awful Demos – Debilitating Demo Diseases
Stunningly Awful Demos – Debilitating Demo Diseases Additional Afflictions
Stunningly Awful Sales Prevention Demos
Attention Retention in Demonstrations
Too Complex – A Demo Disaster Story
Stand Away From The Mouse! – Letting Your Champion Drive

Advanced Topics
Stunningly Awful Demos – Insufficient Discovery
The Menu Approach – A Truly Terrific Demo Self-Rescue Technique
Stunningly Awful vs. Truly Terrific Competitive Differentiation – What, When and How
Stunningly Awful Demo Outcomes – Why Objections Shouldn't Need To Be Overcome
Stunningly Awful Sales Tactics – The Future-Sales Prevention Team
Stunningly Awful Demos – Two Words to Avoid 
What Makes a Demo Truly Remarkable? 
Demo Capital – Underutilized, Undervalued and Often Insufficient
Stunningly Awful SaaS Demos – Lost in the Clouds
Storytelling and Demos
Why Don't They Get It – Are They Stupid Or What?
Are You a Demo Expert? Why Experts Should Feel Uncomfortable
We Are Programmed to Forget - And Its Impact on Our Demos
Four Opportunities to Harvest – The Value of Informal Success Stories
Transition Vision - "We Love It – But How Are We Going To Get There?" 
The Database Break-Even Point

Remote Demos
Stunningly Awful Web "Overview" Demos – The Gruesome Anatomy of a 1-Hour Web Overview
Stunningly Awful Remote Demos – The Top Ten List of Inflicting Pain at a Distance
Remote Demos – The Role of the Active Conduit
Remote Demonstrations – What Can We Do Better? 
Demos to Mixed Local and Remote Audiences – Tips to Handle Combination Situations

RFP’s, Scripted Demos, POC’s, Trials and Evaluations
Stunningly Awful Demo Situations – The Horror of Scripted Demos
Stunningly Awful Software Evaluations – A Strategy of Hope? 

Team Topics
Stunningly Awful Sales Tactics – The Future-Sales Prevention Team
Stunningly Awful Demo Communication – Unencrispening the Demo
Death By Corporate Overview
Stunningly Awful Demos Team Practices – Where 1 + 1 = 0

New Product Roll-out 
Stunningly Awful Sales Kickoff Demos:  Selling to Your Sales Force – the Toughest Customer of All!
Why Don't They Get It – Are They Stupid Or What?

Presentation and Delivery Tips
The Meaningless-Filler Gratuitous-Phrases Vocabulary List
The Content-Free Buzzword-Compliant Vocabulary List

Growth and Development
Demo Skills Assessment – Do It Now

Recorded and Website Demos
Auto-Demo Hell
More Auto-Demo Hell – A "Customized" Recorded Demo? 
[On the positive side, check out DemoChimp at www.DemoChimp.com]

Trade-show Tactics
Trade Show Demonstrations – The Menu Approach

Just For Fun
'Twas the Night Before the Big Demo

And In the Future…
Here are a few candidate topics for my next articles:

- Stunningly Awful On-Boarding Demos – The Trouble Begins
- Stunningly Awful Demo Environments – Failing Early and Far Too Often
- Eight Engaging Examples (What Does “Great” Look Like?)
- Workflow Analysis – Uncovering Four Delightful Pieces of Information (That You Need)
- The Delusion of Product-Centric Demos
- Stunningly Awful Demo Detail – Let Me Explain What Happens Behind The Scenes
- The Terrible Tabs Death March

Vote for the ones you’d like to see and/or suggest others…!

Best Regards,
Peter


Copyright © 2014 The Second Derivative – All Rights Reserved.

Thursday, December 4, 2014

Fabulous Recorded Demos – Is This Possible? (Yes!)

Until recently, I have generally cautioned against using recorded demos (e.g., from AutoDemo) in marketing and sales processes, as it is unlikely that one recorded demo will fit the broad range of customers’ interests.  However, a bright young company has created a wonderful offering that enables recorded demos to automatically be tailored to address specific customers’ interests – really well done!  

Check out DemoChimp at www.DemoChimp.com.