
How Not To Sell Software in 2012 - nreece
http://al3x.net/2012/02/29/how-not-to-sell-software-in-2012.html
======
wheels
> _Practically everyone who’s paying for software is doing so through an app
> store_

And how well's that working for them?

• All of the revenue for the thousands of vendors in the Apple App Store
together for 2011: $3.6 billion

• Oracle's revenue alone for 2011: $36 billion

Notice that decimal point there? There's a reason it's in a different place. I
don't like the enterprise sales process – being on either side of it, and I
have to be on both at times. But the reason I'll do it is because our
customers demand it and folks at that level, when a deal closes, pay enough to
make it worth it.

It's the same on payment methods, actually. We got dragged, grudgingly, by our
enterprise customers to allow paying by purchase order / ACH because that's
how their purchasing departments expect to do things. It's not like we were
going to tell them, "no".

~~~
nhebb
_> > Practically everyone who’s paying for software is doing so through an app
store_

I think that software developers that eat, sleep, drink, breathe the Apple /
mobile world need to be careful not to let this define their worldview of the
software market. As big as the Apple / mobile market is, it's still just a
small piece of the overall pie.

 _> And how well's that working for them?_

Although I think the premise is wrong, but Al3x has a lot of valid points.
There's a huge gulf between app store apps and enterprise products like
Oracle. There are still a lot of companies in the B2B market that don't put
pricing on their sites - even when their products aren't that expensive. Worse
yet, some don't show any viable means of buying their product on the web site
- not just "plans and pricing" but no clear "how to buy", etc. The visitor is
expected to divine that they need to call the company. When I see a site like
that I assume that it's a "if you don't want to contact us, you can't afford
us" filter.

~~~
toumhi
I'm always surprised when I see that kind of websites with no clear calls to
action.

They seem to violate all good landing page optimization guidelines, yet they
are multi-million dollar businesses. Are they leaving money on the table by
not optimizing their landing pages? Or did the customers learn to expect that
kind of websites and already know they just have to call? In this case, would
they be put off by a more modern approach?

In other words, can the B2C approach be applied to B2B without alienating
potential customers? (Some companies do, check HubSpot).

~~~
onemoreact
It's just another way to maximize revenue. I recently got a Visual Studio
Ultimate with MSDN subscription though my company. If I go to
<http://msdn.microsoft.com/en-us/subscriptions/buy.aspx> it looks like that's
$11,899.00 yet when I looked on our internal site it was ~20% of that of that
price. If the actual price is really 20% of that why even list the price? Well
most of these sites are designed to sell to billion dollar companies and only
a tiny fraction of the people visiting that site have the authority to
purchase their product. Ideally, your contact info has value to them, and they
trade pricing info for it.

But as an upside, you can often start using the software before the sales
process finishes. Which is a fantastic end run around the 'approved' >
'negotiated' > 'purchased' process which can take forever at large companies.

~~~
Duff
The problem is that not everyone works at a startup, armed with a credit card.

If you sell to the Fortune 500 or government, a procurement officer does the
purchase. The procurement guy's purpose in life is to extract discounts. With
government, it's even worse, as you have GSA and State contracts with
published price lists.

There's also legal complications. If a vendor gives a discount to one
government entity, all government entities qualify for that price by law.

------
raganwald

      There's no software priced between $1000 and $75,000. I'll tell
      you why. The minute you charge more than $1000 you need to get
      serious corporate signoffs. You need a line item in their
      budget. You need purchasing managers and CEO approval and
      competitive bids and paperwork. So you need to send a
      salesperson out to the customer to do PowerPoint, with his
      airfare, golf course memberships, and $19.95 porn movies at the
      Ritz Carlton. And with all this, the cost of making one
      successful sale is going to average about $50,000. If you're
      sending salespeople out to customers and charging less than
      $75,000, you're losing money.
    
      The joke of it is, big companies protect themselves so well
      against the risk of buying something expensive that they
      actually drive up the cost of the expensive stuff, from $1000
      to $75000, which mostly goes towards the cost of jumping all
      the hurdles that they set up to insure that no purchase can
      possibly go wrong.
    

Joel Spolsky, Camels and Rubber Duckies
[http://www.joelonsoftware.com/articles/CamelsandRubberDuckie...](http://www.joelonsoftware.com/articles/CamelsandRubberDuckies.html)

The second paragraph is the key. Alex, these people aren’t trying to piss you
off, they’re being driven by what BigCo wants from them. BigCo won’t let a
manager try some software and declare that it meets their needs. BigCo demands
that vendors respond to RFPs and RFQs, and if one vendor puts no-nonsense
pricing on their web site, all of their competitors will undercut them by a
penny or so and they won’t get any sales.

I could go on, but Joel has made the point: These annoying vendors have
evolved to sell to those annoying customers. It isn’t the vendors that need to
go extinct, it’s BigCo. BigCo buys cloud services in 2012 the way it bought
time sharing in 1972, so the vendors are still using 1972 sales processes in
2012.

~~~
pnathan
Actually, I know of a number of products that are in the [1K, 75K] range.

* Visual Studio 2010 Ultimate

* vSphere datacenter edition

* TestComplete from SmartBear

* > 3 perforce licences

~~~
notaddicted
Joel's article was written in 2004 so, using gasoline as the benchmark, the
2012 dollars figure is $2180 [1].

[1]
[http://www.wolframalpha.com/input/?i=%28average+price+of+gas...](http://www.wolframalpha.com/input/?i=%28average+price+of+gasoline+2012%29%2F%28average+price+of+gasoline+2004%29+*+%241000&a=UnitClash_*%24.*USDollars--&a=*DPClash.GasPriceE.gasoline-_*AllGrades.dflt-)

~~~
adamtmca
Gasoline is a poor choice of benchmark. Energy prices aren't really a proxy
for inflation.

[http://www.wolframalpha.com/input/?i=core+inflation+from+200...](http://www.wolframalpha.com/input/?i=core+inflation+from+2004+to+2012)

~~~
anamax
> Gasoline is a poor choice of benchmark. Energy prices aren't really a proxy
> for inflation.

Core inflation is also a poor choice.

My housing costs are fixed, so the variation that I see is in the things that
core inflation excludes.

~~~
jsight
I am not sure that I understand your mention of housing costs. Doesn't core
inflation exclude housing costs as well?

~~~
anamax
According to <http://en.wikipedia.org/wiki/Core_inflation> , core inflation
excludes food and energy. It does not exclude housing.

------
unreal37
There is this space between "personal" and "enterprise" where this model
works. Call it "startup" or "small business". I want something, I have a
credit card, I buy, I move on. The less hassle the better.

But in real enterprises, I don't have a credit card. I don't even have
authority to purchase. (There is a whole department named "procurement" for
that.) But I need to see "sales decks", do webinars, talk to salesmen trying
to understand my needs and saying yes to every question I ask, download trial
versions, spec out requirements, do a business case, write up a recommendation
to management, and figure out how complex software with lots of optional
modules fits within our existing environment. It could take months to make a
purchase decision on some software. In the past year, my current client has
paid to fly me 500 miles away (a few times actually) to talk to salespeople
face to face to get product demos and talk strategy before the ink is signed
on the purchase order. These decisions are not easy nor quick nor cheap.

I understand the frustration in this post. I respect this model doesn't work
at smaller scales. The current model is not perfect at larger scales. But
$50,000 a year software doesn't get sold by credit card online nor through
"app stores". Any company that tried to switch away from the old model and
follow the new model at that level would fail, I believe.

~~~
thematt
Spot on.

As an example of just how ridiculous it gets, we recently drafted an RFP for a
solution for licensing our custom-made software to our customers and had a
vendor come in with their solution. When it came time to discuss pricing,
their response was "we charge based on the amount of revenue you'll be getting
from the software...so just tell us how much money you're going to make from
your software and we'll get a quote over to you." Of course we told them to
take a hike, but not before speaking with their other large customers who
actually agreed to this model. It's frustrating to be sure, but also
completely expected at the enterprise level.

~~~
Nrsolis
Of course it's expected! When you have a solution that is going to make a huge
amount of money for some other organization, you'd like to capture some of
that upside as well.

Did you know that HBO prices it's channel lineup to the CableCo's at 50% of
whatever they sell it for -or- $minimum_price_per_subscriber.

Enterprise software is a whole different game and blog posts like these dont
fully capture the wide range of customers in the enterprise space OR the
WIDELY varying levels of technical acumen that they possess. YOU might be able
to take an executable and integrate it into your systems just fine, but the
IT-shop at the local car dealership down the road probably doesn't. They'll
happily pay for the handholding.

I guess I just find it amusing when a startup gets frustrated by the software
business. If you think their sales process is cumbersome or opaque, that's
probably a clue that you're not their target customer.

~~~
einhverfr
I think the reason why it is a diferent game is overlooked in blog posts like
this. The apps that you purchase from an app store, whether brick and mortar
or online, are discrete utilities with completely standardized finctions such
that the market can be reduced to only a few sizes.

Enterprise software is a different game because that asumption no longer
applies. Instead ypu have software that a lot is riding on, and it must be
matched to the business.

------
patio11
_Don’t automatically sign me up for a newsletter about your company or product
when I give you my contact information. Ideally, don’t request my contact
information at all until I’m giving you money._

I agree with the first part -- always ask people for permission, probably by
kicking them a sweetener (e.g. "1 month email course on X"). I have data that
I cannot show you which is in you-could-run-your-company-on-just-this-trick
violent disagreement with the second point here. If you don't like email,
cool, but email is worth _serious money_ in B2B software sales. (So are
salespeople, by the way, even at pricepoints lower than you'd think would
warrant a salesman. Think "4 figure LTV." + )

Also, at the risk of stating the obvious, every email-deleting-salesmanship-
hating engineer in the world could drop dead of a heart attack tomorrow and
neither buyers or sellers of enterprise software would notice until several
months later when trying to figure out why the sales engineers stopped
submitting expense reports.

\+ Addendum: Joel Spolsky's famous Camels and Rubber Duckies article talks
about there being basically two price points for sales now, but a combination
of a better delivery mechanisms - SaaS - and better sales
procedures/technologies opens up a bunch of very interesting options in the
middle for something between BCC $30 "Every email from a customer is a
wonderful opportunity to fix that from happening ever again" and steak-
dinners-and-Powerpoint-decks enterprise sales for $75k+.

I have some amount of knowledge about this these days, since I help my clients
implement it. If you're interested in hearing more, say so, I'll try to blog
it (some day when I get out from a mountain of work and email).

~~~
pavel_lishin
> "1 month email course on X"

What's the advantage of being spammed for a month vs. having the entire
month's course on an HTML page that I can peruse at my leisure and at my own
pace? Or am I misunderstanding what an e-mail course is?

~~~
patio11
If you ask me for email, by definition sending you the email you asked for is
not spam.

The advantages to the software purchaser:

1) You're a busy guy. If we critically hit you with a wall of text right now,
you'll bookmark it and never get back to it. If you're honest with yourself,
you know this, because you've got a backlog of things to read four miles long
already. What's your RSS reader look like? Instapaper? I rest my case. So
maybe giving you the highlights in a digestable format is a value add for you.

2) This is not a decision that is going to be made an instant -- there is an
entire decisionmaking cycle, including research and shopping the solution you
pick to your colleagues and experimenting and you get the general drift, which
is likely going to take you real-life weeks. Your expertise on the problem
area is currently "Not all that much" since you're only beginning the data
gathering process. We can meet you where you are with the lesson for today,
and when you're vastly more informed in two weeks (because learning this topic
is, after all, your job) we'll send you more advanced information. Sure, we
could drop everything we know on you right now, but you're not ready for it
and reading it linearly will not make you ready for it.

3) Given that we're both businessmen here, we can both appreciate that we
choose from mutually acceptable options, not all possible options. The
software company has a lot of stuff available on the web pages for free, but
if you want exactly the benefit this course is promising to you, then as a
quid pro quo we would like your email address and permission to contact you.
You, being a honest businessman just like us, are perfectly free to decline
this offer, but if your counteroffer is "Give me all the goodies and I'll get
back to you", our answer is "Not interested, thanks."

The advantages to the software company:

See above. No, really, the advantage is not "Score! We get to spam the heck
out of Pavel!" We have _copious data_ to prove that the statistical aggregate
purchaser is overwhelmingly more likely to consume six emails in a month than
he is to _actually read_ a 20,000 word web page. We have surveyed buyers of
enterprise software -- we know that many of them do not know what they want
right now. We have had our sales reps talk to people, and we know that many of
them expect to get handheld through this entire process. The email course
gives the market exactly what it wants: information in a digestable,
actionable format which will accomplish the goal of educating them and lead to
measurable increases of qualified leads asking us to buy our software (or
otherwise take the next step in the dance).

~~~
CamperBob
You sure seem to know a lot about how busy I am and where my priorities lie.

~~~
Confusion
He knows a lot about how busy people feel and where the priorities of most
people lie, as expressed by their actions, as measured, rather than their
words.

He doesn't know a thing about _you_ in particular and doesn't care, because he
needs to get it right for _most_ of his customers. Not _every single one_ of
his customers. If you don't accept these facts about email marketing, as
annoying as the situation may be, you are an outlier.

~~~
pavel_lishin
> If you don't accept these facts about email marketing, as annoying as the
> situation may be, you are an outlier.

I probably am. That said, why not offer both options?

------
tptacek
Many if not most of the "business-to-business" software companies that try to
adopt this mindset will find themselves losing money as a result. The
"enterprise" sales process is intensely aggravating, yes, but it affords
software vendors opportunities to discriminate on price, get direct feedback
from customers, offer advance features, and qualify their customers so they
can focus sales resources on budgeted projects.

There are also pretty obvious economic reasons why companies with 5-figure
customer LTVs might avoid credit card billing. There are services that work
well with metered billing, but many others in which customers will demand flat
licensing.

I can also absolutely see why Github would would to keep a pretty tight handle
on who's trialing what is in effect a packaged-up version of one of the most
important software sites on the Internet. We're a FI customer. Incidentally,
on the scale of "enterprisey" sales processes, they were an absolute dream to
work with.

------
etherael
Although in principle I agree, I have to say this is simply naive and ignorant
to the way things are done in other circles. If you were to purchase say
Oracle licenses this way, there is _no way_ this model would work.

You will not go to the Oracle app store and it will not have a database of all
the large corporate IPs in the world with which it can reverse engineer your
available funds and likely chain of purchase decision, and it will not then
just put up a few million dollar for that year figure that you can click and
instantly pay with your credit card.

Strippers must be witnessed, steaks must be consumed, conferences must be
attended, rounds of golf must be played, lip service must be paid to
ridiculous conceptual bugaboos, the purchasing bureaucracy must be reverse
engineered, the chaff must be sorted from the wheat, starched collars must be
preened, ignorant men in suits must be consulted as if their opinion had
worth. And this is of course only the parodied incomplete summary of the
entire horrifying affair.

Oracle and their ilk are feasting on elephants. Some would even fairly say
mammoths; they are big, fat and move very slowly. The entire idea that a
strategy could be formulated, evaluated, shopped for signatures to the
relevant parties, signed off on by the law department, agreed to and generally
made in the amount of time it takes to make a purchase with the paradigm
offered as an example in this scenario is likely terrifying if not utterly
extraterrestrial to them.

------
davmar
i'm the ceo of a company that sells b2b software. we never sell a product for
less than $2k annually, and our contracts are frequently in the 5 figures
annually.

our current sales cycle includes a lot of the negatives that you point out.
however, we're up front with our pricing while our competitors aren't.

we actually created a product that did nearly exactly what you said. we didn't
get nearly as many customers with that method. people would sign up
(sometimes) and when they did, they tended not to pay once their 30 day free
trial was up. our conversion rates sucked. we ended up canceling that product
and removing it from our site after 8 months.

when we have a webinar with a sales call, our closure rates increase
dramatically. customers tend not to pay by credit card even when given the
option.

i actually think you're 100% right for many, many products. but i don't think
it'd work in my boring b2b industry.

 __edit: we probably didn't do enough experimentation on the small product as
we should have, so i take some of the blame for that.

~~~
gruseom
Thanks, that is a great comment based on experience. Can you say more about
your industry and/or path to success? What was most surprising? Do you have
salespeople actively soliciting business or do most prospects find you? What
advice would you give to startups planning to break into the b2b world?

~~~
davmar
gladly.

i think the single biggest contributor to our success has been the fact that
we are in close contact with our customers.

if we lose a sale, we have the opportunity to learn why we lost. during a
webinar, we hear the reactions of customers. with RFP's we get a list of the
features they want.

when we win, we stay close to them during implementation. we learn what
works/what doesn't work with our products.

based upon this feedback, we're able to constantly refine our products and
messaging to what our customers want.

we started with a product guy who could pump out code (me), and a phenomenal
sales guy. the two of us essentially built the initial business.

we never took any funding.

the most surprising thing is how long it takes to build a solid product. how
long it takes to get momentum. everything just takes a lot longer than you'd
expect. it's also a funny thing. once you've achieved a small amount of
success (and mine is small), people start thinking you actually know what
you're talking about. in my experience - apart from geniuses like jobs, gates,
musk, etc - there's nothing that separates you from me. it just takes time,
dedication and hard work.

edit: most people find us. we also have business associates who resell to
their customer base and customers sometimes give us nice referrals.

advice: b2b is great because people actually pay for shit. lots of b2b
software is just awful, i think you can differentiate by providing an
excellent product. it'll stand out and give you a solid niche.

i'd also say that you should not give your software away for free in b2b. but
you should give it to a trial set of customers initially who can help you work
out the kinks. stay close to the customers, they can help guide you and tell
you where they look for software like what you're selling.

online advertising works great. use landing pages, a/b test them. all the
things that you probably already know, just put them into practice. they exist
because they work.

~~~
edwinnathaniel
Would you mind to provide examples of B2B software that we rarely heard of?

I have interest in B2B more than B2C occasionally but don't really have a lot
of domain knowledge. Would you happen to know a few general tricks how or
where to get such knowledge?

~~~
davmar
sure. first of all, if you're a cs major (like me) it's doubtful that you'll
have the right domain knowledge.

in my case, my father and family friend approached me and asked if i could
build something. our co-founder said "all the software in this (hr technology)
industry sucked". can i build xyz? over a long period of time, i did.

so my general trick would be - find people who are in completely opposite
industries as you are right now. doing totally different, non-technical work.
often times they're consultants that are reselling other companies products.
and they know - since they've been implementing products and speaking to
customers on a daily basis - where the customer pain points are.

hope that helps. it only happened for me once, so it's hard to replicate, but
i hope you get the chance.

------
trotsky
_It’s 2012. Practically everyone who’s paying for software is doing so through
an app store: one click or tap and you’ve got what you want._

Practically everyone buying software for mobile or from Apple? In the rest of
the world almost no desktop software is selling through app stores, one click
or otherwise.

------
rgrieselhuber
A lot of this depends on the type of product and market that you're in. For
software that costs up to a couple hundred bucks a month, all of these points
make perfect sense.

Products that are more expensive tend to also be more involved. A lot of
times, the sales team needs to understand how the customer is going to use the
product and help them get it up and running. HubSpot is probably a good
example of this. From my understanding, the way they nailed their retention
problem back in the day was to go through extensive training / onboarding with
each customer.

Simply leaving customers to their own devices on a complicated product is
quite often horrible for conversions, which is a wasted opportunity for the
vendor and inconveniences a potentially customer that might have otherwise
been perfectly happy with the product after learning how it works.

~~~
einhverfr
Yep. My business takes the following approach:

1) Open source

2) Get in a consultation with you to see what needs to be changed

3) Submit a proposal.

4) Engage in further discussion to ensure we stay useful. Some degree of
included support is good to do that.

I have been told over and over that we charge too much for the SE Asian
market, but once they start comparing what they get for the money (focus on
delivering value) that goes out the window.

------
suhail
The problem with most companies that do this is simply that they want ultra-
qualified leads. Truthfully, it's tough to determine whether a sign up is
going to be worth $10 or $10K/mo. The other problem is, depending on the
product, the sales cycle can be long. It's not that any B2B company wants to
spam you, but it's that they want to remind you of their existence as much as
possible so that when you start thinking about your options, they are first on
your list.

Here's the logic re: Alex's points:

1\. Requiring a sales call helps qualify real leads.

2\. Lack of trialing the software is in part due to wanting to have a
conversation with you.

3\. Hiding your pricing is simply the way to have a conversation and to
qualify leads. It makes price discrimination also possible. Think about
selling a startup vs. IBM.

4\. Whitepapers are just old school. It's useful for when lower-tier decision
makers need to present something.

5\. Newsletters are simply a way to be in the conversation with your company
prior to when you buy--constantly.

6\. Larger organizations sub-divide their resources into people who can do X
or Y. Where X sometimes primes the customer for Y. It's not done to the
customer's benefit, but rather to the organizations.

7\. Old school.

8\. Well, the truth is, cold calling can work even though it has a fairly low
conversion rate. You have to start somewhere.

I am not saying we do any of this at Mixpanel necessarily, but it's the simple
logic of enterprise.

~~~
rurounijones
I was searching for a library that does something. I found various options,
commercial (approx 7,000 per server)and open-source.

Getting my hands on one commercial library for testing was like pulling teeth.

1\. Register for download which requires filling in loads of company
information before being given access to a download.

2\. Download the trial library (Only allowed to download either windows 32
bit, windows 64 bit, linux 32 bit or linux 64 bit..want more than one? tough)

3\. (Wait 2 days) Sales guy sends me licence file (Forwarding the Salesforce
"You have a new lead!" email no less which really annoyed me, "I am not a
lead, I am a free man!") and I start testing the library

4\. Find out the company I downloaded the library from (You can only download
from their US based, English site) had partners in my (Non-English speaking)
country so I got the sales guy speaking to me in a different language than
what I expected (or wanted).

5\. Asked to be put in touch with an English speaker because I had some
technical questions.

6\. (wait 1 days) Get an English speaker, ask some questions, get told they
will be passed to technical guys

7\. (wait 2 days) Get replies.

8\. Ask about how I get the different library versions. Get told I have to re-
do the ENTIRE process from step 1 just to get a different version of the
library due to "Legal reasons".

So, it took 2 days just to get my hands on the library for testing and being
told that I have to jump through more hoops just to get different versions.

Compare with the open source library:

1\. go to sourceforge and download the library for any OS and start playing
with it in about...oooh, 5 minutes.

2\. Want to try a the library on a different OS? another 5 minutes.

3\. Questions sent to the developer answered slightly faster due to not having
to go through sales guy (although to be honest this was not a huge difference
in response time).

The hassle of getting my hands on the commercial library soured me on the
whole idea of using that company. If just getting an evaluation license is
such an arse I do not see us having a happy relationship with the company had
we bought the license.

\--

On a side-note. I recently had to bug fusion-io because they had their
webinars behind a registration wall. Really? You put your marketing
information behind a closed door? I am researching your technology and I don't
want to have to sign up to yet another site just to see some
information.(Although to be fair they fixed this quite quickly after I had a
moan at them on twitter)

------
mindcrime
I'm on board with most of that, but I'm not sure about the "don't cold call
me" bit. I mean, yes, I understand that _you_ \- the author of this piece -
don't want to be cold called. But I'm not convinced that going with a pure "no
cold call" strategy is optimal in the general sense. Everything I've seen /
heard leads me to believe that cold-calling is still essential for companies
that are selling in the b2b / enterprise space.

But, then again, I'm thinking more in terms of "companies who are willing to
host their own software, want 'best of breed' solutions, have extensive
integration requirements," etc. Sure Google Docs is fine for plenty of firms,
but there are firms who want an DMS that integrates with Active Directory,
ties into their workflow / approval systems, etc.

I guess the point is that "enterprise software" covers a pretty broad swathe
of scenarios and situations...

------
trout
The truth is, most customers or end users for Big Software aren't capable of
handling the process of researching, trying, deciding, convincing higher ups,
negotiating, designing, implementing (or finding an integrator), and
supporting it themselves.

If they think they are, there is an astronomically high chance something will
be wrong. And you know who takes the blame for that? The company with the logo
on the software that doesn't work right. That and the guy who did it wrong.
The argument scales as the software and customer does, but it's still a truth.
Unless your software is dead simple, if you give people enough rope they will
cause problems. That prevents the company from more opportunities, makes the
customer's life difficult, etc.

The solution to this is to be hands on as much as possible before things are
implemented. Properly done, it's mutually beneficial spent time. It would be
logical to compare the complexity of the product solution (see steps above) to
the amount of pre-sales steps required.

Disclosure: Pre-sales engineer for big software/hardware

------
nate
"the opposite is also true" - Derek Sivers

Test.

It'd probably be best to serve a company to be able to test whether or not it
serves you best to force customers into a hand held sales process or let
everything remain DIY.

I've created a ton of self serve from the get go.

For example: In one thing, we have so many tire kickers startup their site and
do their thing, but then we find out, that they completely screw up how to
even get started. It might be we just haven't figured out how to design it
better. But we've been designing it and iterating on it for years. It's simply
something that's a bit hard to understand until someone explains it in words.
And since people tend to hate reading and skip the manual, without knowing
what's going on, they screw up, and think the product doesn't work. So the
solution to that might just be "lets force them into a process so we can make
sure they have the best startup experience possible, and we'll be more
successful with more sales". That could very well be an outcome. But you never
know unless you split test that sales/conversion process.

------
ErikRogneby
I don't think this is particular to software. It's just that software has the
luxury of being transmittable electronically. Say your company needs some
vehicles: buying one, two, three? Probably the same as a consumer. Buying
100-300? Need to start thinking about asset tracking, depreciation,
maintenance & support contracts, etc. Does it even make sense on the balance
sheet to buy or is leasing better? Enterprise sales have more to do with the
structures of business than what is actually sold. This is why sales guys are
often hired based on who've they sold to, rather than any product experience.

~~~
alexro
Your comment makes a lot of sense, much more than many comments above you.

I can only add that managers at BigCo want to cover their ass first and only
then do the job. And how you gonna cover your ass when you 'try before you
buy'?

------
leftnode
I can guarantee you SpaceX has a very extensive onboarding stage with their
customers, but I love how they have a no-bullshit pricing guide.

<http://www.spacex.com/falcon1.php#launch_and_placement>

Want placement on that rocket? 10.9 million regardless of who you are. From
there, if you're a serious customer they'll begin the onboarding process. I
love it.

~~~
nl
Well that just isn't true. Here's what they actually say:

 _SpaceX offers open and fixed pricing that is the same for all customers,
including a best price guarantee. Modest discounts are available for
contractually committed, multi-launch purchases. Falcon 1 is the world’s
lowest cost per flight to orbit of a production rocket. Falcon 1_ Price:
$10.9M _Current plans are for payloads that would fly on Falcon 1 to be served
by flights on the Falcon 9, utilizing excess capacity. This is a very cost-
effective solution for small satellite launch needs._

So.. if you commit to using SpaceX more than once, you can negotiate a
discount. If you are prepared to use a different launch vehicle, you get a
discount. They offer a _best price guarantee_ , so you can play them off
against another company.

It's nice they have a list price, but to me that sounds exactly like the list
price for Oracle: only suckers pay what is listed.

------
Domenic_S
Sales capitalizes on what works. If an enterprise sales process works for a
company, guess what they're going to keep doing?

This blog post should be titled "How Not to Sell Software to Alex Payne".

------
Sakes
Remember this is written from a technical person's point of view. If you are
selling to technical customers by all means give them a try now button and get
out of their way. But if you are selling to project managers, marketers, or
upper management, you should take his Don'ts list with a grain of salt.

\- Edit for typos

------
bdunbar
_Today’s startups are tomorrow’s enterprises. Many of the other startup folks
I know share the same expectations about how software should be sold._

They'll change their minds when they become an enterprise.

Listen: we don't do things that way because we like layers of bureaucracy, and
long, tedious meetings.

Well, some of us don't.

Enterprise customers and vendors operate that way because it's the easiest,
most painless way to get stuff done.

If it wasn't, we wouldn't do it that way.

------
joedev
"How Not to Sell [Cheap] Software in 2012."

or

"How Not to Sell Software [to Small Companies] in 2012."

------
dansingerman
The problem here is a lack of fit between the vendor, who is geared up to sell
to Enterprises, and the buyer who is not an 'Enterprise' business.

The Enterprise software sales process is about navigating big businesses'
procurement processes, and helping the buyer build a business case that the
enterprise will accept.

I'm going through this pain myself. I work for a startup, and some of the
vendors we are talking to are clearly geared up to sell 'Enterprise' software
to 'Enterprises'.

But I'm CTO of a small startup, and I just want to know what the damn software
does, and how much it costs. There's no procurement process, probably not much
of a (detailed) business case. I need to buy or build something, and I need to
know how much it will cost to buy.

What I do think the writer is correct about, is that software selling is
moving towards a self-service/appstore model (not that I see Enterprise
software sales disappearing very quickly) and eventually the Internet is
likely to disrupt it like many other industries.

All that said, I also found the Enterprise Software sales model really painful
when I worked for an Enterprise level business ("Hello IBM, can I buy a
database from you?" "Yes, please meet with our sales team of 24 people as a
first step")

------
seltzered_
This reminds me of steve blank article, where the salesforce burned his well-
written datasheet about a product because it's cause too many folks to "get to
no" quickly:

<http://steveblank.com/2011/08/05/bonfire-of-the-vanities/>

I work in the semiconductor industry which is rife with webinars, field
sales/apps engineers, etc. I hate it, but in some ways it's a wacky industry
where you have a garden variety of customers ranging from grad students
wanting free samples for a science project, to Apple/Dell wanting to cut your
margins to nothing while lying that their volumes will be huge when they're
also just testing out a science project.

You end up with a problem where you don't know how much effort your apps
engineers will have to spend working with a customer and whether their time
was worth working with them. So you end up with negotiators called sales
people/field engineers. In theory it works unless those negotiators are bent
on extracting as many commissions as possible, and/or don't walk into the
right markets.

------
Nitramp
I've once worked in a company on the other side of this. I needed a particular
piece of software for work that was ~$50 on Amazon, with a $10 rebate, and
something like $60 when bought from their website directly. They had a trial,
and buying it was as easy as giving them your credit card number.

Now the company I worked for had a policy to only obtain computery things
through a supplier, which would be a local vendor or shop selling this
software. The trick is, nobody does that for some random software on the
interwebs that's only $50. The purchasing process itself also cost something
like $700 for any individual invoice.

So two minions and a purchasing manager set off on a journey to find a
supplier for this software, with my boss, my office manager, and me constantly
nagging them, as it was urgent. After two weeks they came back and said it was
sadly impossible to buy this software. We ended up shipping our software late
due to the delay, and buying the tool from Amazon, expensing it as a book.

Moral of the story: the old BigCos indeed force this behaviour out of
suppliers.

------
wtffffff
Ok, just read this and absolutely have to comment, since I used to work for a
telcom services agent. I learned there that where consumer services (low
monthly recurring cost) could be sold online sight unseen, customers requiring
business-level services (high monthly recurring cost) wanted more handholding,
more discussion, and assumed there would be more paperwork. We actually tried
to provide them with instant pricing on T1s, and sales dropped considerably.
This is the story in almost anything, and its the reason cars and houses are
still sold primarily by people, not websites. Websites may provide the in, but
people close the larger deals better in the current day and age.

------
nandemo
> we occasionally try commercial software. Mostly, we don’t end up buying it

Given that, I'm not sure why I should pay too much attention to the rest of
the post. I'd rather take advice from people who successfully sell a lot of
software or otherwise have experience in buying it.

> Practically everyone who’s paying for software is doing so through an app
> store

This is a very myopic view, though unsurprising given the previous disclaimer.

Besides the enterprise "shrink-wrapped" software market (see wheels commment),
there's also a huge market for custom software.

------
program
Addendum:

1) Don't ask me why/when/where/how I will use my brand-new software

2) Don't force me to "try" other software just because I bought one

3) Don't force me to give you informations that are not strictly correlated
with the purchase

------
suresk
Enterprise software purchasing is pretty broken from both sides, but the
vendors make tons of money because of it and the managers who do the
purchasing often don't care.

Part of the problem Alex is seeing (and I've seen) is that the startup/small
business segment just isn't that big, and vendors are usually fine with
ignoring it and losing out on revenue. I do a lot of stuff on the side and
have tried to buy licenses for some enterprise products, and even mid-sized
vendors aren't really interested in talking to me. Large vendors like Oracle
and IBM are heavily optimized toward selling to big businesses who _need_ a
purchasing process to take months and aren't as sensitive to price. The App
Store model is 99%+ consumer-oriented.

Unfortunately, a lot of startups and small Enterprise vendors end up
recruiting sales and marketing people who have been successful at larger
vendors, so the same practices get implemented.

I blame this mostly on purchasing practices that are largely centered around
managers mitigating risk. The risk they are most interested in mitigating is
the risk that they'll get fired for making (or approving) a bad purchasing
decision. Vendors are happy to play along, since it usually means they can
make more money out of the deal.

------
mikeocool
While I agree in principle with this list, experience has taught me that if I
have to talk to sales person to find out the price software, it's very likely
that it's out of my company's budget (seed funded startup). I move on and save
myself and the sales person from wasting any time.

If you're product targets early stage companies and doesn't cost 5+ figures
monthly, and you sell software this way, then, yes, you're doing something
wrong.

------
usaar333
> Heck, even free/open software people have an app store these days.

Wasn't open source the first mover here? apt has been around for.. 13 years?

------
ralmeida
About trial versions, a strange idea has just occurred me: has anyone out
there thought of offering a trial in two separate periods? For example: 15
trial days = 1 day now + 14 days starting whenever you want it to.

This is to solve the problem that when I stumble upon a service that has a
trial period, I have a strong urge to see what it's like, but am afraid that I
will forget about the service for n-1 days, when I will get an email telling
me that the trial has ended and I haven't gotten around to explore it fully.

Say, for example, I want to try out a project management suite. If I have a
split trial period, I can explore the features and overall feel of the product
for myself on a day and then prepare my workmates to use it in a test project,
and only start the second part of the period when we are ready.

Has anyone thought deeper about the advantages and disadvantages of this?

------
endlessvoid94
I don't think it's in anyone's interest to sell a $2k / month / user
enterprise software product on an app store and give some third party a 30%
cut.

That's the biggest reason it's still done this way. I think.

------
freshhawk
I know it's a minor thing but:

> Heck, even free/open software people have an app > store these days

Little off the cuff remarks can expose ignorance quickly. Not something you
want to do when trying to convince your readers of a more complex point.

It also makes the reader wonder what else you just threw in there because it
sounded kinda right and you maybe heard it somewhere.

If you couldn't get that little thing right, I have so much less trust when I
get to a part of the post that I don't know as much about.

------
gesman
In high priced product market ($5000+) it's a custom to babysit client and
give him a lap dance with a brain massage before opening all the cards. I
think shoppers for $47 products hate it more than corporate buyer/purchasing
managers. Latter ones want to relax in a leather chair and listen to bullshit
before assigning budget - it's their job and they used to it. They certainly
are not used to $5000 "buy it now" paypal buttons.

------
sovande
Some sellers may have a bureaucratic sales process, but there are examples the
other way around also, with customers having a long and windy buying process
which is hardly worth a sale. Last year we sold our on-click download and try-
before-buy product to a large US company and we had to fill out X forms and
send them by hardcopy to become a "supplier". After 6 months we are still
waiting for the payment.

------
stdbrouw
> I can find and talk to your other customers basically instantly in order to
> determine what they paid for your product and if they’re getting the value
> they expected from it. I will do this.

The joke is, quite a few enterprise vendors will ask you to sign some sort of
NDA before they'll even show you a demo. And of course you'll pay before ever
having tried the software. "Trials" – are you mad?

------
deyan
To summarize what many others are saying in this thread, unfortunately,
software is currently sold not bought. That's why everyone ends up doing all
this nonsense that the author describes.

I am personally in 100% agreement that it should be App Store simple but
reality proves more complicated than that. It is disappointing but not
surprising.

------
nreece
> Practically everyone who’s paying for software is doing so through an app
> store

I wrote about 'The Other App Store' (organic search) on similar lines -
<http://blog.roveb.com/post/12003627967/the-other-app-store>

------
thekevan
Sales guy here. Here's my response.

 _Don’t require that I waste my time on a sales call – or, worse, in a
“webinar” – before I can give you my money. Instead, provide all the
information I need about your product on your website._

We'd love to. The truth is it is the customers who ask for demonstrations,
walk-thoughs and tours of the software. I spent weeks training to learn how
this software works, who it is a good fit for and who it is not a good fit
for. It's simply not realistic to think every product can be explained on a
website and comprehended without misconceptions. Also, a robust software suite
has many, many user needs. Creating a web site which is custom tailored to
each need type is a very high permutation.

 _Don’t make it hard for me to try your software. If I can’t play with a trial
version or sandbox immediately, I’m moving on._

Don't assume you know how to use it and can make an adequate evaluation in
that 2 - 10 minutes you will spend on the trial version. Also, the purchaser
is often not the same person as the user. I want them on the phone as well to
make sure they have the need and skills to utilize what I have to sell. If you
buy something that is a poor fit, I may have your money now but you will bury
me with support and complaints later on. That's not worth it.

 _Don’t hide your pricing behind a sales process, and don’t play pricing
games. I can find and talk to your other customers basically instantly in
order to determine what they paid for your product and if they’re getting the
value they expected from it. I will do this. So just put the price of what
you’re selling on your site and skip the games._

How much is a website? Just tell me how much it costs to build a web site and
skip the games. /snark. How much is a house? It depends on if you are talking
about an outhouse or the White House. I don't know what kind house you want
when you are looking at our site. Also, if you could teach everyone to do that
competitive research you claim to be able to do, I would appreciate it. If all
customers could become as educated as you claim you can become before buying
my stuff, I'd be printing money.

 _Don’t make me read a whitepaper in order to get essential information about
your product. Put it on your website. In HTML. Not in a PDF, not in Flash, not
in Silverlight or ActiveX or whatever. What your product does, on your
website, in HTML._

That's just a way to collect your contact info to follow up. It is a poor
method. I am in sales and I am not giving anyone my contact info for a white
paper either. But if you are getting something of value from me, I want
something from you.

 _Don’t automatically sign me up for a newsletter about your company or
product when I give you my contact information. Ideally, don’t request my
contact information at all until I’m giving you money._

If you went through the white paper form mentioned above, you probably never
read the text next to the submit button saying "okay to contact me".
Businesses should not use this method, consumers should not patronize it.

 _Don’t make it hard for me to talk to a technical person at your company
about the nitty gritty details of how your product works. If you don’t provide
a forum for those discussions, someone else will, and you won’t control it._

Sure, you can speak with my development folks. You and everyone else who wants
to know how we built what we built before spending a single dollar with us.
Also, don’t assume that your sales person doesn’t know. Ask them. If they
can’t answer your question, they should be able to find the answer quickly. If
they can't, you just learned you shouldn't buy their product. Move on.

 _Don’t make it hard for me to pay for your product. I have a credit card. I
also have a PayPal account, a Google payments account, and an Amazon payments
account. Any of those are fine (although PayPal is not ideal). Any other
billing process is not._

If I charge $10,000 for something, I'm not going to give PayPal a cut of that
as well. Also, you having access to those payment methods doesn't mean you
have the authority to use them. I've been burned by that quite a bit.

 _This should go without saying, but don’t cold call or spam me. If your
product is good and meets my needs, I promise that I’ll find out about it._

This is just a pollyanna way of looking at it. Spam is wrong, nothing to
debate with on that. But yes, I will cold call you if I identify you as
someone who may need what I have. If you don't want my product, don't ask me
to call later, don't refer me to the intern to while away the hours with
pointless questions. Just say no, you are not interested. I will listen and be
happy to move on to the next customer.

------
paraschopra
Well, why can't you have the best of both worlds? Provide free trial for
people who want to quickly trial it. Provide demos, webinars for those who are
interested in going that route.

It is hard to optimize for _both_ kinds of customers, but it is certainly not
impossible.

------
tsunamifury
Eloqua does every single one of the the things on the list of 'wrongs' here.
It was one of the worst purchasing experiences of my life, they practically
talked me OUT of the service.

------
sedev
I notice a lot of comments taking on Al3x's comments about _the way things
are,_ but almost none taking on his comments about _the way things will be._
It'd be a little to facile to just say "skate to where the puck will be, not
to where it is," but I definitely agree with him that the demographics are
changing, and that the benefits that (let's be generous) used to be in the
Enterprise Sales Process, are not guaranteed to be there in the future.

If you assume that he's correct about the demographic changes and the consumer
tastes, do you think he'll be right about the benefits of the Enterprise Sales
Process evaporating over the next 5-15 years? I think that's a good bet.

------
rbarooah
A major reason for buying software is because we want to trade money for time.

Making the buying process time consuming significantly reduces the value
proposition for those who are time constrained.

------
rythie
Is this why most enterprise software has poor UIs? since they never had to
optimise the UI for customer retention, they just rely on the sales process to
get people to buy it.

------
dreamdu5t
Don't make pretentious statements like, "Get ready to leave your bank" before
telling me how you solve any of my problems. It's almost insulting.

------
kingsidharth
This is NOT how big boys (corporates) buy their software. They like it slow,
at par with their pace. If it's too easy, they won't use it.

------
AndreyKarpov
Good article! I read this article and was glad. I am pleased that we are
moving in the right direction. We watched as our competitors sell Coverity
(<http://www.coverity.com/>) and Klocwork (<http://www.klocwork.com/>). The
process is very complicated. We (<http://www.viva64.com/>) have avoided almost
all of the items listed in the article. Cool.

------
ry0ohki
Add Radian 6 to the "Doing it wrong" list.

You have to talk to a sales person. Then watch a webinar. Then take
TRAINING?!?!!

Just to maybe get a demo.

------
zyeljanee
Talking about sale of software, many people are searching for App Stores. What
are the consequences behind this. Talking about sale of software, many people
are searching for App Stores. What are the concequences behide this.

------
mattdeboard
New Relic really gets all these right too.

------
bipolarla
Anyone think Apps will one day replace websites? I notice many individuals and
businesses still having a regular website. In 5-10 years will there be no
websites and only apps? I actually like working on a larger computer be it on
apps or websites. I know the phone market will continue to expand especially
in China, Russia, India, and Brazil. Microsoft still feels they have value in
new versions of Windows. What do you think?

