Any sales/marketing people out there? Need advice on selling software

In My Humble Opinion
1

Background: I’ve been working with a buddy of mine for a year now, developing a piece of software that’s pretty damn good if I say so myself. The software is, for all intents and purposes, done. It’s business software, aimed at a particular market. It’s a good idea - basically, it does a job that large organizations will often develop their own software to do, at a very hefty price tag. Ours does the same thing at about half the cost. We know this because buddy’s previous job was developing this custom software for big businesses at full cost - he got the idea for the software we developed while doing this.

So what’s the problem? Buddy can’t seem to sell it. Not surprising, given that we’re both techies, not salespeople. He’s been laboring with trying to sell it himself for several years (I came on a year ago, but he’s been doing this for a couple years previously). He’s also hired an “industry salesperson” but this guy has been trying to sell it for 6 months and hasn’t sold a damn thing. I’ve met the guy and seen his resume; I don’t think he’s a particularly good salesperson.

I’m not a part of the company, but I have worked for a year (not full time) with a contract that states I will get paid when the software sells, so I want the damn stuff to sell. Being a techie, I personally don’t know how to sell stuff. Given that:

  • the software is done. It’s not a dream or a vision; it’s a solid product, right now.
  • we know that businesses in this industry need products like these, as they spend hundreds of thousands of dollars developing their own
  • we offer the same solution at a much lower cost
  • there’s no other company out there offering what we offer at the price we offer it

I just have to believe the stuff is sellable, if we can just figure out the right people/plan to sell it.

So what do we do? It’s pretty clear we need marketing and sales people, but I don’t know how to go about finding people to do so. Is this a situation where we should start looking at business loans? Venture capital? Do VC companies still exist (I know that VC money is a lot harder to get now that it was 10 years ago.) Any other ideas?

2

I would start by asking the companies that your partner has tried selling to why they chose not to purchase. Then go from there.

3

You’ve got a lot of things to consider:

What pricing ballpark are you in?
Is this something you intend to support/install/warrantee etc., or is it more off-the -shelf?
Is there just the two of you? And how have you been presenting yourselves?
How are you packaging and delivering the product?

I think the toughest maket is the $20-50k range. There’s not enough in it for you to spend a lot on installation, customer training and all that to make it worthwhile, but it’s more than companies want to spend for what they feel is off-the-shelf.

Sometimes looking at your competition and figuring out in which areas you can do better, helps define some of the above.

Post more stuff.

4

This is not an off-the-shelf software package; an installation involves hardware, software, training, support, and customization. Pricing is high (in the six figures; how high depends on the size of the organization that purchases it), and there’s a yearly maintenance fee. Pricing-wise, we know that organizations who build their own package to do the same thing we do often spend in the high six figures to low seven figures, and often don’t like the results.

We’ve asked why the organizations we’ve approached won’t purchase. The answer is almost always some variation of “it’s not the right time for us - we’re waiting until next year/next quarter/etc.” We’ve also had people balk at the price, however, I’m fairly certain that anwer is a matter of identifying the customers correctly. IE, they balk at the price, but really, there is no less expensive way to get what we offer. Sure, they’d like to buy it for $10K, but it’s like wanting to buy a $2 million house for $100K - you just can’t do that.

Also, we’re flexible about pricing. If someone really wants to get us in, we’d come up with a beta program or something to try to meet their pricing. Unfortunately none of the potential sales have gotten to that point yet.

Although nobody has flat out said so, I’m fairly certain some of the problem is convincing organizations to spend that kind of cash on a small, no-name software product. We have a lot in our favor - a big one is that my buddy has a proven track record of creating and supporting the “roll-your-own” version of this type of software. He knows what he’s doing, and can prove it. I think if we could get one or two early adopters, we’d be set as far as future sales. Getting those early adopters is a bitch, though.

Right now, the company is my buddy. He had a partner, but they split up a few months ago. IMO that was a good thing, the partner was not an asset, if you know what I mean. I’m just a contractor at this point, but have invested enough of my own time in the company that I’m very anxious to see it take off. Buddy wants me to be a principal in the company. I haven’t done it yet, for no good reason that I can think of other than I’ve been leery of the sales side of things. I don’t see sales happening and I don’t know how to make them happen. Thus this thread.

“packaging and delivering” is not an issue, as we haven’t sold anything yet. We have a Web site, we go to conventions, we send out flyers and do follow-up calls. The marketing material is professionally produced.

5

What is the business case for a prospective customer to buy your product?
What would drive a customer to purchase your software?
What are the consequences to a prospect if they either do nothing, or build their own version?
What are the consequences to a prospect if they defer making a decision about your product for a year?
Who is your competion? Do they offer 80% of the same functionality at 50% of the price? Or 75% of the functionality at the same price?
Where do prospective customers go that are looking for a software solution in your area?
And finally, what does your solution do?

6

  • The first and most important thing: get someone on your team who can sell. Not an employee, a major shareholder. Someone who has built sales teams and a rolodex of relevent companies he’s sold to.

  • Obviously, you want to choose this person (and other members of your team) carefully. So here’s the problem when you’re a technical guy and the person you’re looking for is a sales guy: Every sales guy can talk. That’s their job. They have great jokes, and great stories about huge accounts they landed. You MUST get validation that they have a rolodex, and a history of closing deals similar to what you’re expecting them to close for you. Validate this by mandating that they show you past commission statements for deals they closed. When you interview them, ask them for the biggest piece of low hanging fruit they see, i.e the biggest sale they could easily get. Then have them make a call right there to whatever contacts they claim to have. If they know some IT guy, they’re not the right person. They should know senior manager decision makers, and be able to call on them.

  • (this is the biggest area I’ve blundered and thereby learned, and I suspect you could fall prey here too) Manage the sales person. When you’re the technical guy, there’s a tendency to think “Joe’s the sales guy; he’s got that side under control. I’ll just go code this new feature”. wrong. You must keep a close eye on them. And a much closer eye than you would on a development project, because in development at the end of each day or each week, you can see physical progress. In sales, it’s softer stuff, like relationship-building, and it’s very difficult to see what progress has been made. It’s soooo easy to hear stories about all the big accounts that are going on, and then 4 or 6 months later find yourself with no customers.

  • Have a plan. Understand who your customer is and how you’ll get to him. Expect to give direction to your sales person of who to call and what to do. Understand the key points towards winning sales. Feed him with marketing documents.

  • Come up with concrete steps towards a sale, and track them. Here’s an example:
    State % Actions
    Suspect 0% Lead to be followed up on
    Qualified Suspect 0% Lead has been followed up on/Customer is interested in demo. Must meet qualification before demo
    Prospect 10% Demo complete. Right fit/Active project
    Qualified Prospect 30% Customer has requested POC. Active project that can support closed transaction within 60 days
    Competing 50% POC in progress, access to power, understanding of procurement process, contract has been presented for review
    Technical Win 70% Customer has agreed to purchase, contract is being finalized, customer is in agreement to close within 30 days
    Committed Transaction 90% Paperwork in progress, all approvals cleared, customer will deliver paperwork (contract, Ex. A, P.O.) within current month
    Signed 100% Signed off by accounting

Make your sales person produce weekly status reports, showing each customer along with how far along it is in the process (This is called a “funnel”, as it starts out with lots of cold contacts and eventually has many fewer real customers)

  • Make your sales rep keep a list of up to date contacts, including company, contacts, phone, email and relationship (who has signing authority, who is a gatekeeper, etc.) This is very important, as you never know when your sales rep will leave, or you will have to fire him.

  • You’ve already hit it on the head, but you MUST get some reference accounts and quick. This will typically involve you giving them the software for a sizable discount (but do NOT give it away for free, or they will not respect it.) And you must expect to do a fair amount of professional services to that customer getting things to their liking. But this is key to getting other customers.

  • Get some press. Get a relevant magazine to review you. issue press releases. Note that having reference customers is very important for this; without a reference, you really don’t have anything the press wants to write about.

I’ve built several software companies starting with a couple of guys in a garage growing to 150+ employees. I don’t know your space very well, but I have some very relevant experiences. If you’d like to drop me a line, we can talk more by email.

7

Where are your objections coming from? When you are selling enterprise software, you are selling to many different people - IT, since it goes on their network, the department/departments that will be the end user, finance, etc. You have to know where your deals are getting derailed in order to find out the problem.

The accounting department might think your product is the greatest thing ever, but if it runs on a Windows box and the company is a Novell shop, that can kill a deal, even if there is a perfectly acceptable workaround. IT folks can be as quirky and irrational as anyone else, contrary to popular opinion.

Also, the answer that “It’s not the right time for us” is not the real answer, that is just a way of blowing you off. Your salesrep isn’t doing a thorough job if he/she doesn’t know why the sales aren’t happening.

8

I would have to agree that the small size of the company is a big deterrent. That’s a lot of money to invest in a product from one guy. What if he gets sick and can’t work?

One thing that you may want to look into is giving the product away for free and just charging for support.

9

Moved to IMHO.

-xash
General Questions Moderator

10

I agree with filmore. You have a setback in the sense that yours is a new product that does not yet have the stamp of credibility, especially because it comes from a company that has yet to develop goodwill and establish itself in the market. Think from their point of view. If someone came to you trying to sell a new car, that he claims performs like a Mercedes, would you buy it at half the price that you would pay for a regular Mercedes? I don’t think so. You would want a test drive and perhaps even then not be convinced enought to buy it. Taking all these negative factors into consideration, your marketing strategy should address these issues using “promotion” techniques. You have to make an offer that the customer finds difficult to refuse, an offer that makes him feel safe with your product. Try and strike up a deal where you offer the product free of cost for a trial period. This period should be of sufficient duration so that the performance of your package is rigorously tested. The clause would offer the customer the right to walk out without obligations. Once you manage to get your foot in the door in this manner, play up hard on the installation and commissioning making sure that everything goes as per plan and in a professional manner. The objective should be to lure the customer and prove that your product and the tech support is as good and as reliable as your competition.
BTW, if you do manage to strike a deal after reading all the advice/suggestions here, do not forget to mail cheques of appropriate amounts to the dopers here. :wink:
Wish you the best.

11

Just wanted to second the ‘free trial’ idea. If you guys were to capitalize on this idea, I’m sure you’d have more positive responses from potential clients, at least.

12

Athena, I tried replying to your email, but it says your mailbox is full.

13

Tried a second time.

14

It DOES?!?

Damn.

I’ll look into it, and send you a reply when it’s fixed.

15

FWIW, after reading Bill H.'s post, I think we’re done here. That pretty much sums it up.