“I never lose—I either win or learn.” That’s one of my favorite mantras and something I remind myself of when things feel like they are about to crash and burn. There is a lesson in everything. When I don’t get the outcome I wanted either personally or professionally, I don’t dwell on not “winning” but take a step back, think through the situation and focus on what I could have done better. I make note of the lesson and carry it with me.
For example, when I started out on my career path in financial sales (gulp, many, many years ago), sales reps would typically engage my colleagues and me when a customer requested some type of financing option. These conversations typically took place near the end of the sale cycle after pricing had been formalized and the deal was close to or completely committed. Inevitably the customer would wait until the last minute to inform the rep of their lack of budget. Typically the customer required a zero percent payment plan because incurring interest costs was not likely to be approved. The end result was an additional discount offered (bad!) or no deal reached (even worse!).
I’ve been involved in many of these scenarios and although it sometimes works out in the end, there is another approach I’ve learned over time. This approach focuses on incorporating financial selling throughout the sales cycle. I promise you don’t need to be a wizard at Excel or in reading financial statements either (although it doesn’t hurt!). I’ll break this approach down into five key inflection points within the sales cycle. (more…)
Your technology sale to a Fortune 1000 customer has been on the forecast for several quarters. The solution is expected to be an on-premises perpetual license (capital budget), including maintenance and professional services (usually operating budget items).
The opportunity has been moving steadily through your sales forecast internally from lead to qualified lead toward close. It has also been making its way through the customer’s approval processes.
You’ve forecasted the deal to close, and the end user has budgeted a reasonable amount in the current year’s capital budget to make the acquisition. Enough budget to get you to Club. Hello Cancun!
What could go wrong? (more…)
The Move to Usage vs. Ownership of Technology & the Impact on Sales Cycles
Piggybacking on Nora Yam’s recent blog: A Funny Thing Happened on the Way to Subscription Pricing, I’m taking a look at how the move to the cloud and changing accounting rules are impacting the sales cycle:
As software vendors continue their shift to the cloud, looking for higher stock valuations and lower costs, the shift can lead to delayed sales cycles and unintended outcomes.
Here are some of the reasons cited for sales delays:
Budgets: Most enterprise software sales have long sales cycles. Customers have planned for on-premises solutions which were budgeted for in the prior fiscal year. In the world of perpetual licenses, capital budgets may have been already allocated.
When selling hosted solutions in the cloud, operating budgets–generally larger and more flexible than capital budgets–are being tapped. What’s the issue then? Most customers’ operating budgets are being hit with unexpected costs during the transition. Without a strong business case the sale may be delayed until the next budget year. The cloud is putting pressure on operating budget availability. (more…)
As technology vendors move to software subscriptions as their primary pricing model, it presents new challenges as they attempt to meet customer demands while also managing company objectives. Historically customer finance programs have been used as strategic sales tools for many reasons, not the least of which was reducing the need for large, upfront payments. So is customer finance still relevant in today’s world of subscription-based, pay-as-you-go pricing models?
Pay as you go, utility, consumption, subscription, and the cloud have been the rage during the past several years. As a result, many vendors scrambled to adjust their offerings to meet the perceived needs.
The key drivers of this trend were:
1) OpEx budgets were plentiful in the good old days because most IT products were treated as capital assets. In some ways, operating budgets were easier to sell to than capital ones.
2) The perceived advantages of seemingly lower costs and not having to make a long-term commitment (true only if one compares a one- or two-year cost to owning an asset that can perform over a much longer period, and if there are no costs to switching platforms). Already, early adopters have come to realize that the yearly costs can stack up over time and can far exceed buying and owning your own licenses and IT assets.
3) Some customers have strategically chosen to divest themselves from owning and maintaining their own IT infrastructure. This last point can be a smart option for those customers for whom IT is not a differentiating core competency; however, this may not be the right solution for everyone. (more…)
Some say that solution selling is a dying concept or less relevant than it used to be. I think it is still an important part of the sales process, but its effectiveness relies on having a strong financial acumen and access to a robust financial solutions capability.
Over the years I have attended several annual IT sales kickoff events. I have also participated in hundreds of other sales events including QBR’s, sales training and education programs, and analyst events hosted by the likes of IDC, Gartner, and others. The concept of “solution selling” has seemed to survive the test of time.
It is almost always mentioned or referred to in one form or another. Whether it’s part of the keynote speech on the main stage or included in individual breakout sessions or part of the sales training curriculum. Apparently, solution selling continues to be a relevant part of most sales strategy discussions. (more…)
While sitting in traffic listening to sport updates, I was reminded of my busted NCAA bracket. For the last fifteen or so years, I’ve entered a bracket into my office March Madness pool. Relatively speaking, I’m a late arrival to the excitement of Big Dance. It wasn’t until after college when I was working in Los Angeles that a convincing officemate sat me down to walk me through the selection process (A xeroxed copy of the newspaper-published bracket) and promptly took my $10 entry fee.
My brackets have not improved much over the years. So why do I keep playing every year?
I’ve learned to enjoy the fast-paced nature of the game, the last minute heroics and the unforeseeable upsets.
March Madness is much like quarter-end at many companies: fast-paced, emotionally charged with equal parts excitement and anxiety and full of unexpected turns. I’ve learned that the teams that end up on top of March Madness have a lot in common with the sales reps I’ve known who have been the most successful.
Back in the … gulp … late 90s, many software vendors were slow to realize that customer finance (successfully used for providing leasing to grow and accelerate hardware sales) had any utility in their fast growing industry. For a short period of time, it wasn’t even clear that cost justification was required. And then the dotcom bubble burst. Suddenly financial sales execution mattered again—cost justification to help customers understand why they should buy and extended payment deal structures to make it easier to buy.
Fast forward to the present day and everything is feeling a bit cloudy. Offering subscriptions has become a popular bridge to establishing more consistent recurring revenue in the hopes of cranking up a company’s valuation multiplier. And now many software subscription vendors are questioning whether customer finance (successfully used for providing extended payments to grow and accelerate software sales) has any utility in their fast-growing industry.
Albert Einstein famously declared “Dancers are the athletes of God,” and rightfully so. A dancer, a ballet dancer in particular, must possess the strength, endurance, and stamina of a professional athlete all while maintaining the grace, artistry and control that is instrumental to success in the world of ballet. Ballet is not just tutus and pointe shoes–it is physically and mentally demanding. Ballet is no joke.
Many sales managers have a propensity to hire former athletes. However I’d be inclined to seek out a ballet dancer.
Presentation and Preparation
There are many parallels between ballet and top sales reps. Let’s start with an easy one. A strong dancer will convey a story holding command of the audience throughout the performance. A dancer will practice, practice, practice and then practice some more, perfecting each step. They don’t just get up on stage and “wing it.” They’re prepared. Dancers may need to improvise a sequence or two, but regardless when they step on stage, they have a plan and steps (literally) in place to execute. (more…)
I was listening to the news recently, and two political analysts were “unpacking” comments made by a political figure. I thought, when did “unpack” suddenly come to mean something other than taking things out of a suitcase? Turns out it’s good that I’m not an etymologist, because the answer is: more than 100 years ago. According to Merriam-Webster, one of the official definitions of “unpack” is: to analyze the nature of (something) by examining in detail.
I was reminded of this alternate definition in re-reading Denise Garcia’s great blog post on Sales to Service, when she suggests the importance of serving and understanding your customer.
In working closely with hundreds of successful sales professionals over the years, I’ve seen it proven that a clear understanding of what’s really important to you customer is critical to success on both sides of a vendor / customer relationship. This may be intuitive when it comes to the use and application of technology. In my experience, unpacking all of the information your customer provides (or alludes to) is just as important in making your solutions more consumable for the buyer. And making your products consumable for the buyer is essential in reaching your sales goals.