The Advantages of the Incumbent Vendor – Part 3: Leveraging the Investment!

 

Once your solution is in production use, the appetite for your customer to repeat their selection and implementation experiences (see Parts 1 and 2) is typically very low. Reinforce and leverage this! During renewal and expansion discussions, remind your customer that all of these steps are already done (and don’t have to be duplicated, as would be the case for a new vendor).

 

You customer doesn’t have to climb that mountain again; they don’t have to face freezing winds and oxygen deprivation (in the form of excruciating presentations, demos, and other vendor activities). They can enjoy the rewards of that journey without reexperiencing the pain!

 

Furthermore, any competitor that tries to displace you hasn’t even defined a plan for their proposed expedition, as far as your customer is concerned. You are in a competitively advantageous position.

 

Important Caveats

 

However, here are very important assumptions for the above to remain true:

 

1.     Your customer achieved their Value Realization Events and is tracking well on the path to full ROI or has already achieved it (see page 110 in the paperback version of Doing Discovery for more on Value Realization Events).

 

2.     You have regular meetings with your customer via your account management and/or customer success teams, so you are aware of any issues your customer is facing with your product or implementation (and have concrete plans to address them).

 

3.     You regularly discuss product roadmaps with your customer to head off competitors’ “new and improved” offerings and capabilities. Your objective is to stay “ahead” of the competition, with respect to functionality, or to minimize any perceived negative functionality gap between your offering and competitors’.

 

Roadmap discussions are also opportunities to bind your customer more closely to you, by giving them more “weight” in the feature/function definition, prioritization, timing, and implementation processes. Interactions with colleague companies at users’ group meetings help reinforce this.

 

In our expedition analogy, this last item is similar to discussing future excursions, encouraging your customer to participate in decisions about desired destinations, routing, daily travel distances, food and beverage choices, and sleeping arrangements. They enjoy a growing amount of ownership in the process and the results.

 

Resources:

 

Parts 1 and 2

https://greatdemo.com/blog/

 

The Incredible Value of Value Realization Events

https://greatdemo.com/the-incredible-value-of-value-realization-events/ 

 

Doing Discovery

https://www.amazon.com/Doing-Discovery-Important-Enablement-Processes/dp/B0B8RJK4C2/

 

The Advantages of the Incumbent Vendor – Part 2: Solution Implementation – More Costs, Time and Energy Investment

 

The previous post explored selection, now let’s look at implementation!

 

Solution Onboarding: It is likely that you and your customer invested significantly in the process of implementation. It’s another, different expedition:

 

-       Assembling the implementation team

-       Implementation kickoff, strategy and planning meetings, and assignment of resources

-       Identification of Value Realization Events

-       Pre-installation or implementation assessment

-       Installation, as necessary

-       Administrator training

-       Customization meetings to determine and agree upon fields, configuration and profile parameters, dashboard layouts, processes, rules, approvals pathways, alert thresholds, etc.

-       Data migration; data loading; QC

-       Implementation of configuration, profiles, processes, rules, alerts, dashboards, etc. 

-       Interoperability testing with the customer’s existing software and communication with those vendors

-       Pre-rollout QC

-       User training

-       Go Live and initial rollout

-       Tuning and changes as needed

-       Broader rollout

-       Internal progress reviews and updates

-       Old system shutdown and removal (and termination of license agreements with the old vendor, as necessary, by Legal, Purchasing, and Accounting)

-       Periodic internal progress meetings

-       Periodic meetings with your Customer Success/Account Management team

 

Again, there was a terrific investment in time, people and money to bring your solution aboard, similar to staging an expedition into the Himalayas. It was an enormous effort, including numerous side-trips, solving problems with supplies and provisions, unanticipated challenges, injuries and other difficulties. 

 

Most customers really don’t want to go through that effort again, particularly in the short term!

 

Resources:

 

Part 1:

https://greatdemo.com/the-advantages-of-the-incumbent-vendor-part-1-vendor-selection-sunk-costs-time-and-energy-investment/

 

The Incredible Value of Value Realization Events

https://greatdemo.com/the-incredible-value-of-value-realization-events/ 

The Advantages of the Incumbent Vendor – Part 1: Vendor Selection – Sunk Costs, Time, and Energy Investment

Leveraging Its Impact on Managing Competition, Renewals and Expansion Sales

 

“Get their data, and their hearts and minds will follow”

 – Michael Cusumano, The Business of Software

 

It is likely that a large amount of energy was expended by your customer in bringing your software aboard and implementing it successfully into production use. Very simply, this is work they really don’t want to do again, without a very compelling reason to change!

 

This can be compared to a trek where you and your customer climb a mountain together. After a great deal of preparation work and an exhausting ascent, you and your customer are now enjoying the view from the summit. Starting again at the bottom with another vendor is not a pleasant thought!

 

The climb probably included the following energy investment:  

 

·      Problem Recognition: At the beginning of your customer’s process, their first stage was realizing that they have a problem, followed by effort to define it accurately. Additionally, the owner of the problem may have struggled to convince others that it was important to solve, and to allocate budget and other resources to make it a real project. That took significant work and political capital as well.

 

·      Solution Evaluation: The bigger the problem (and the more expensive the solution), the more thorough the evaluation process. Your customer may have had numerous discovery calls, demos, and other discussions with several vendors, including you. There may have been an RFP process, competitive bakeoffs or POCs executed with multiple people involved from the customer’s side. This could have consumed several people’s time over a period of months.

 

Here’s a partial list of the activities your customer may have completed:

 

o   Formation of a buying committee

o   Problem and timeline definition

o   Researching solutions

o   Internal “build vs. buy” discussions

o   Managing “Group Dysfunction”

o   Identification of possible vendors

o   Initial discussions with SDRs or BDRs

o   Initial demos

o   Discovery conversations

o   More demos

o   Vendor elimination to a “short list”

o   Data privacy and security reviews (often extensive)

o   IT architecture reviews

o   Reference checks and other social proof

o   Vendor bakeoffs or POCs

o   Building and presenting the business case

o   Vendor selection (and communication with the losing vendors)

o   License agreement terms negotiation

o   Purchasing SOW and terms negotiation

o   Price negotiation

o   Raising the purchase order(s)

o   Signing the license agreement

o   Implementation discussions

 

·      Each of these steps involved members of the buying committee, often plus other impacted departments, including Data Privacy, Security, Governance, IT, Purchasing, Legal, plus senior management, as well as users and users’ managers.

 

That was a big investment! And all of the above are now sunk costs that organizations don’t want to reincur.

 

That’s a lot of climbing with a large team, in our analogy. Perhaps it’s more like an expedition seeking to summit a major peak like Everest or Mount Khuiten. And while the expedition did reach the summit, consider how many people contributed substantial time and energy in planning and logistics, preparing gear, load-carrying, and camp setup and maintenance, not to mention repairs and rebuilding after a serious storm. This may be very similar to the internal processes and challenges involved in selecting a vendor!

Do’s and Don’ts: Fabulous Framing for Founders!

 

Demos, Discovery, and Business Growth: 

 

“Peter E. Cohan shares how storytelling, sales strategy, and business thinking drive real growth. Learn how to communicate value, build strong business cases, and position yourself as an expert.”

 

I joined Craig Sheets and “Behind Closed Books” for this engaging and pragmatic discussion of founding and growing your business, including: 

 

00:00   Introduction

03:30   Have you ever seen a bad software demo?

04:00   Do the Last Thing First: The founding story…!

06:30   CRO’s desired deliverables

07:30   Flip your demos upside down!

09:00   A demo horror story…

10:30   Buying a car: an analogy!

12:00   CRM systems as examples of the challenge

14:00   An illuminating conversation with a founder

15:00   Presenting information using Inverted pyramid

19:00   How demos change based on job titles

22:30   Pain… and a tale of two doctors

27:30   “But you already know their workflow…”

30:00   Uniqueness, culture, and discovery

32:30   How much proof is needed?

36:00   What is the least expensive form of proof?

41:00   Introducing… Buyer Enablement!

41:30   The horrors of lead churn

43:30   Experienced vs inexperienced buyers

47:00   Anticipating your buyer’s needs

50:00   My favorite discovery question!

51:30   Automated demos – avoiding harbor tours

53:30   Automated demos and Vision Generation

54:30   Wrap up!

 

You can find the full recording here – enjoy!

Dimensions of Discovery - Just One More!

If I can get you to explore just one additional discovery dimension that results in information that leads to a win – you just made my day (and I think I just made yours!)!

Here are a few to explore:

- Discovery Documents

- The Discovery Space

- Perspective

- Wants and Needs

- Probes

- Expansion Questions

- Why? Questions

- Biased Questions

- Diagnostic versus Biased Questions

- Empathy and Quid Pro Quo

- Outflanking Competition

- Vision Reengineering

- The Reverse Demo

- Trust and Credibility

- Avoiding “No Decision”

Discovery and Demos Across the Technology Adoption Curve – Part 8: Laggards and Final Thoughts

 

If you’ve been keeping track (and I’m sure you have!), the remaining 16% of the population are Laggards. Don’t even bother trying to sell to this category: Every fiber of their being resists change!

 

Geoffrey Moore used the phrase, “No compelling reason to change” but it’s stronger than that. Laggards resent every software update, no matter the size or importance. They hate new technologies that threaten to replace their existing tools and habits. One of their favorite phrases in defense of their choices to remain motionless is, “It works just fine.”

 

Here’s a real-life story of an oxymoronic combination of Innovator and Laggard:

 

Buck’s of Woodside restaurant is renowned as a place where many Silicon Valley startups were founded. Stories of “cocktail-napkin” drawings sketched at Buck’s that resulted in new and disruptive products and new market categories abound. When you were greeted at the reception station, the employee would not ask, “How many are in your party?” but rather, “Who are you meeting?” Truly a fabulous place! (Check out their website…!)

 

Imagine my surprise when I happened to glance behind the counter at Buck’s cash register machine (today we’d call this a Point-of-Sale device) and noted that it was running DOS (yes, DOS).

 

Amazed, on my way out I asked the proprietor, “Tell me, why are you still using a DOS-based payment system?” He said, “It works. No compelling reason to change…”

 

Crossing the Chasm

 

Lengthy languishing in the Chasm can kill a new product and cripple a company. An inability to identify and effectively engage the Majority categories can precipitate a rocky downhill run into the Chasm. Failing to recognize that you are in the Chasm will place your organization in the ever-growing graveyard of technology organizations and products.

 

Discovery, demos, and the degree of proof required all need to change as you move from Innovator to Early Adopter, to engaging the Early Majority and working through the Late Majority. And if you see someone still happily running Windows 95, run!

 

Resources:

 

Buck’s of Woodside 

https://my.matterport.com/show/?m=k6RtWhrenma

 

Doing Discovery

https://www.amazon.com/Doing-Discovery-Important-Enablement-Processes/dp/B0B8RJK4C2/

 

The entire article in one place!

https://greatdemo.com/discovery-and-demos-across-technology-adoption-curve/ 

Discovery and Demos Across the Technology Adoption Curve – Part 7: Moving into the Majority

 

Innovators and Early Adopters comprise about 16% of the overall population – that’s about one in every six companies. They typically purchase just enough of your new offering (and rapidly enough) to encourage your forecast to inflate! 

 

“Wow, those first few sales are just the tip of the iceberg!” is what often goes through your sales teams’ minds. “We’ll be rolling in commissions shortly!” Sadly, this optimism won’t be justified if you don’t change your discovery and demo practices as you engage the Majority players.

 

The Early Majority are approximately 34% of the population. Making the necessary changes in your discovery conversations and demonstrations enables you to successfully engage this group. And this category is, very simply, the most important group to secure! The first few sales into the Early Majority open the gateway to the balance of the category.

 

These first Early Majority sales need to be carefully nurtured and supported by your customer success teams to ensure that their implementations achieve these customers’ Value Realization Events. Why? That’s how they become reference customers, and, as noted previously, compelling references are one of the key requirements of the Early Majority (and even more so for the Late Majority).

 

That may sound like cyclical reasoning, and it is, to a degree. How can you secure your first Early Majority customers, who require strong references, if you don’t already have an existing Early Majority customer? 

 

And yes, I’m repeating this point because it really is one of the main paths out of the Chasm. There are two solutions to consider. 

 

First, as was suggested earlier in this series, one or more of your Early Adopter customers may provide sufficient references for some of your less risk-averse Early Majority prospects. Accordingly, you may want to focus on small initial orders with your first wave of Early Majority prospects, since small orders are correspondingly less risky, and focus on ensuring that these rollouts accomplish their Value Realization Events. These customers can then become your first Majority reference accounts. As this takes place, you can explore expansion opportunities within these customers, as well.

 

Second, and this should help in determining which Early Majority prospects to pursue, the attributes of the Technology Adoption Curve categories are not fixed in concrete, but manifest as a spectrum. Some Early Majority prospects will have some of the attributes of the Early Adopters: They require less proof than their peers (e.g., excellent discovery followed by a well-constructed Technical Proof Demo); they are a bit less risk-averse and are willing to support a small initial implementation. Not surprisingly, discovery questions that explore prospect culture, tech stack buying habits, rollout practices, and related topics are the keys to identifying these Earlier Majority players.

 

The Late Majority makes up another 34% of the population and, combined with the Early Majority, represents the bulk of your market. Secure enough Early Majority accounts as references, gain experience with typical POC (and POV) success criteria, and this will enable you to begin to address the Late Majority effectively. (Or at least as effectively as possible – the Late Majority will still demand a long, tortured, multi-threaded buying journey – more of an arduous trek, frankly, than a journey!)

 

Bear in mind that, while order sizes will potentially increase as you move further into the Majority, sales and buyer resource investment will increase. Leverage what you learn!

 

 

 

Resources:

 

The Advantages of the Incumbent Vendor

https://greatdemo.com/the-advantages-of-the-incumbent-vendor/ 

 

Doing Discovery:

https://www.amazon.com/Doing-Discovery-Important-Enablement-Processes/dp/B0B8RJK4C2/

 

Parts 1, 2, 3, 4, 5, and 6:

https://greatdemo.com/blog/