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!
