In my role as an analyst I am shown a great many marketing pitches by software vendors. What continues to surprise me, but should not, is not only the variable quality of these but how certain themes recur.
A common mistake is to talk about the features of the product without clearly explaining the value of the solution to the customer. Since software vendors are full of technical people, it may be tempting to describe the coolest technical features of the product, but unless the audience you are actually selling to is technologists, then this is a mistake.
Saying that a customer managed to get their marketing analysis query down from 10 minutes to just 30 seconds is doubtless very interesting, but what does it actually mean in real terms? If the query was something run once a month in batch, then probably not much. If it was a real-time analysis that helped the firm decide what kind of products their reps should try to sell to a prospect, maybe quite a lot. As a buyer it is important to understand whether a product meets a need that the buyer has, not whether the product is, in abstract terms, better than another.
In truth, there are only three types of benefits that are likely to excite a business buyer: something that reduces their current costs, something that increases their revenues, or something that reduces their risk. If the product that you are selling cannot be clearly tied to one or more of these three things then you are probably going to have an uphill struggle.
If only a limited number of vendors manage to explain what benefits their product bring to the customer, even fewer go further and try to quantify those benefits in monetary terms. Admittedly this is tough since the benefits that one customer receives from a successful implementation may vary dramatically from those of another, especially if customers are in different industries or are of markedly different sizes. But put yourself in the shoes of the buyer. Which is the more convincing pitch? “Product A helps you reduce your costs by enabling better decision making” or “In an independently audited study of five of our customers, average cost reductions of equivalent to 0.5 per cent of total company revenues were achieved; the average net present value of the projects was £4m, with internal rates of return ranging from 45 to 233 per cent.” Which pitch do you think more credibly represents a situation where customers actually saw some real benefit?
Many vendors try and quantify their benefits with absurd claims that destroy their own credibility, such as: “Our new development tool improves developer productivity by 90 per cent”. Given that a significant chunk of developer time is spent designing code, understanding specifications, testing and documenting rather than actual coding, it follows that nothing on this earth is going to improve developer productivity by 90 per cent, unless it has a wire that plugs directly into an end-user’s brain and generates fully documented, tested code as an output directly from their desires. Alternatively, vendors provide ‘illustrative’ benefits, showing how their product, which takes just “a few days” to install and costs a few thousand pounds, almost instantly delivers millions of pounds of benefits. My reaction to such claims is that either they are flagrant lies or they are not charging remotely enough for the product (and it is rarely the latter).
When I was on the buying end of software at Shell, I tended to discount most things that vendors told me unless customer success stories had quotes from named individuals. If a vendor could get the head of marketing of a well-known firm to say that their product brought her several million dollars of benefits, then that one quote was worth an avalanche of glossy PowerPoint slides. This simple truth seems to elude many vendors, who produce case studies that say: “A well-known bank used our product to…”. If it was such a great project, then why is the customer unwilling to stand up behind it with a quote? Sure, some firms do have policies that make it tricky to endorse vendors, but very few are unwilling to publicise a wildly successful project.
Brevity is a virtue that vendors can lack. Just the other day I was treated to a 153-slide presentation, which suggests to me a company that is incapable of explaining what it does in a coherent way.
Vendors sometimes dig their own graves. When I was at Shell I was given a pitch by a large American vendor eager to demonstrate their global reach. They showed a slide with a world map and their various offices marked, and there, clearly marked just off the west coast of Africa, was their New Zealand office.
While such extreme examples rarely occur, I never fail to be surprised by how rare it is for a vendor to explain succinctly what benefits their product can bring in quantified monetary terms and with unambiguous customer proof points.
About the author:
Andy Hayler is founder of research company The Information Difference. Previously, he founded data management firm Kalido after commercialising an in-house project at Shell