Software CEOs are missing massive revenue opportunity
In interview after interview, buyers of B2B software are all telling me the same thing about how they bought, where they are now, and what they wish software vendors would do for them.
This was their buying process: After careful analysis, weighing all the tradeoffs and putting several vendors through their paces, they decided who "won." They got that big expenditure approved. They contacted the vendor, purchased the software, and got it installed, usually with help from tech support. They are now using it.
But now, they need more help. A different kind of help. Help that the vendor could - and should provide. Help that they are willing to pay for.
They already know the program well enough to perform basic tasks, but they have also realized that they could be using it more effectively. They want to get full use of the program's functions. They want to meet important business goals, and take it to the next level.
What they need is for someone to sit down with them, talk about what they want to accomplish - from a business perspective - and then help them do it. A consulting gig.
They have gone back to the software vendor, asking for help. They have literally begged, in some cases. But they haven't gotten anywhere.
Revenue Coach Tip #1: If someone is trying to give you money, don't blow them off.
Invite them in. Thank them. Take the money. Then make darn sure they will be happy they gave it to you. Find a way to build something that will work for them, and work for you.
Right now you're selling and supporting a product; that's how your business is structured, that's how you think about your business, and the types of people you have hired are the kinds of people who can support those activities.
This new, project- and service-oriented source of revenue will require that you set up a separate "division" that is structured differently, operates differently, and uses a different type of person to provide services to the client.
Revenue Coach Tip #2: If you want to sell something that people would be happy to pay for, start by asking them what they want.
If you want to take advantage of this burning need among your own customer base, start by interviewing customers who have bought your software, on the phone. Ask them open-ended questions. Have a conversation. Listen.
Ask questions such as: "One of our customers has asked us to provide 'optimization' services - helping them get the most out of the software. Would you also be interested in this? What form would you like the service to take? How many people would be involved, on your side? What would you consider a fair price for this? What would you like to be doing better? If you were us, how would you structure this business? Are there any examples you know of, where someone is doing this kind of thing well?"
You'd get fantastic answers to these questions, answers that would tell you exactly what to do: How to structure it, how to price it, what types of customers would be most interested, what they want to take to a new level, and so on. If I were conducting these kinds of interviews for a client, I'd only have to interview five to ten customers. Actionable, bankable patterns will be obvious by the seventh interview. If you conduct the interviews yourself, you may have to interview a few more to get the whole story, since they will withhold some comments from you out of consideration for your feelings.
Once you know what to do, you can start to build the business, serving one eager customer at a time until you had the process working smoothly. Then you could ramp it up.
Whoever ended up doing these consulting gigs for you would have to know the product inside and out, know how others are optimizing it, and be able to help customers meet their business objectives using the program. This will only work if you hire intelligent, helpful people, make sure they are trained well, and make sure that they truly do accomplish what the customer needs them to accomplish.
You'll end up with a happier customer, one who will tell others how successful he has been. If there were opportunities to sell more seats to other divisions of the same company, your customer would be happy to usher you into those new opportunities. You will end up selling more seats.
Revenue Coach Tip #3: Enjoy your success as your competitors continue to ignore the revenue opportunities you are optimizing.
CEOs and marketing execs at software companies are not even noticing that they have a problem - and an incredible opportunity . Even those who sell marketing automation software - who should know better - are closing the door in the faces of those requesting this kind of help.
Their salespeople and tech support people are telling customers, "Well, we're not really set up for this, sorry." The salespeople have moved on to the next customer. The tech support people are only trained to install the software, and help with specific problems.
None of these folks are thinking about the bigger business problem that the customer is trying to solve. And they haven't mentioned this to management, because it doesn't really concern them; it's just customers trying to buy something that they can't provide. Better to not tell the boss something he doesn't want to hear.
This is precisely what happens when top execs delegate customer relationships to their underlings. What they should be doing is hiring someone capable to interview their customers every six months (even in the fastest-moving markets, that's sufficient), and coming back with this kind of information. Or picking up the phone and calling customers themselves.
The truth is, your software isn't really sold successfully, in a way that will lead to positive referrals and satisfying market momentum, unless your customers are getting full use out of it. And they often can't figure out how to do that without some help.
Don't slam the door in their face. Take their money. Then give them what they want.