
Ask HN: How do I sell my expensive niche software w/ no sales background? - consultant
A little over 2 years ago, I quit my full-time job and began freelancing. The vast majority of my work has come from one particular group of customers at a University. I've been paid 10-20k dollars on 3 separate occasions to develop a web application for this niche, I have another customer who will be paying me a similar amount in the fall when I work with him, and there is another customer who wants something similar but doesn't have the funds yet.<p>This niche is academic in nature and as far as I know the money comes from grants. I have never signed any paperwork, I have simply built what they wanted and been paid. I have a great relationship with these customers and have already discussed the fact that I might try to sell a product like this to other institutions, which they are fine with. I am confident that I can extract some core components that are useful in this niche, rewrite the app (there are things I want to improve), and create a product that would be useful to other similar institutions. However, I don't actually have many connections in other cities yet, nor do I have any experience in selling a piece of already-developed software for tens of thousands of dollars to people I don't know. All of my business has come through referrals. What I _have_ done is spent a few years talking to the customers, answering emails of the users of the app, developed several different versions of it, and been able to successfully charge money by the hour for development. So I feel like if I only connect a few more dots, there is a great business here. So now I'm trying to decide where to go with this, and could use some help.<p>So I have a few questions:<p>1) If a piece of software would cost tens of thousands of dollars to develop from scratch (possibly more when considering the development has required the time of many highly paid individuals), would it be reasonable to charge someone five figures for a packaged solution, and also charge a high consulting rate for customizations and integration with the customer's data? Note that this software isn't being sold to mom and dad or your friends, it's being sold to large, state and federal funded organizations, and there aren't many solutions out there.<p>2) How does one go about learning to sell? Especially a software product that is expensive, but probably wouldn't sell that many copies, maybe a thousand copies. Any books you recommend? Do I just find the proper contact at the institution and call them up? Tell them about what I have and show them a demo? Do I need to get a sales guy? Do I need to fly all over the country and show the software in person? Would someone be willing to buy an expensive piece of software based on a screencast and examples of a couple of other customers that use it?<p>So there you have it. I'm trying to make the transition from consulting to selling a product, have a couple years living expenses in the bank, and have someone willing to pay me while I work on it for the next few months. But now I just need to figure out where to go next. Obviously I will sell the first copy to the client I am planning to do work for in the Fall. But what should the next step be? My first thought would be to just start cold calling potential customers, which I have never done. Any help you can offer would be appreciated.
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ankeshk
1\. Pricing:

If your clients pay for the software from grant money - find out about these
grants before deciding on your pricing. People won't have a lot of hesitation
on price if its not their money - but grant money - that they'll be spending.

So find out what kind of grants your clients opt for. Whats the average value
of that grant. Is it a specific purpose grant? And fix your pricing
accordingly.

2\. Book recommendations:

i. How I Raised Myself from Failure to Success in Selling - by Frank Bettger
(The best book on selling I've read)

ii. Bag the Elephant - by Steve Kaplan (Book for selling to big clients)

Jeffrey Gitomer books on selling are also good.

3\. Selling Ideas

Record short interviews with your current clients. Ask them the following
questions:

i. What was your perception about my product / solution before you bought it?

ii. How has that perception changed?

(Answer to the above 2 questions gives you the before-and-after scenario.
Powerful testimonial stuff.)

iii. What is the biggest benefit you gained from using my product?

iv. What are some other benefits you received?

v. Do you think the price is reasonable?

vi. Would you recommend the solution to others?

Obviously - ask for their name and title and stuff too.

Record such 10 minute interviews. Compile all the interviews in 1 DVD. And you
have a very powerful sales tool.

Using such tools work wonders for folks who aren't good at personal face-to-
face selling. Let others sell your solution to your target audience.

Mail these DVDs with a 1-2 page sales letter to folks in other cities (Let me
know if you need help with the sales letter too - I've written a few that have
done well). And follow up by phone after 3-5 days. And then follow up again.

As others have recommended, tradeshows and conferences are very good to get
your foot in and raise awareness too.

~~~
rgrieselhuber
One other thought on pricing. I'm in a similar situation (niche market,
expensive software, big clients that take a long time to sign). This can drain
you and so you want to do everything you can to get cash coming in quickly.

Rather than just charging $20K in one fell swoop, can you turn it into a web
application, and charge $1-1.5K a month for it? It depends on which number
you'll have a hard time getting approval for, but it may be easier, especially
if you give them the option to cancel any time, or at least within 60 days,
etc.

~~~
jonah
The ASP model is interesting and you might want to have that as an alternate
pricing model.

One University I was working with did not want to subscribe to a hosted
product that was just about perfect for them, but rather wanted their own
built and it largely had to do with budget. They could get the tens of
thousands required as a fixed budget, but couldn't make a monthly fee fit
their budget.

Especially if they're often paying via grant money, you could ask them but
It's probably single, annual, or at most quarterly disbursements. You could
structure your payment plan around the schedule they receive their funding.

------
anamax
> I have never signed any paperwork, I have simply built what they wanted and
> been paid.

You really need to talk with a competent attorney. And no, asking other folks
what they did doesn't count because you don't know what differences between
their situation and yours matter and how. Heck - you're not likely to see the
differences. Besides, there's no guarantee that they got it right.

There's a chance that you don't own what you've written. There's another
chance that any of your customers could give it away. And so on.

HN is not the place to deal with legal issues. We don't know the right
questions or what the answers mean. We don't know what's possible. And so on.

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njl
My partner and I built a product, and we're currently selling to higher ed.
He's been selling to higher ed for seven or eight years now, and I've been
peripherally involved in selling to higher ed for four or five. I'd love a
chance to chat about it, and my email is in my profile.

Without knowing more details, your price feels reasonable. You need to put
together a solid, total package, and don't forget 18%/year in maintenance. If
your clients are getting funding from an outside source on this, you need to
grease the skids. There are people who do nothing but set up and administer
grants. If you can hook up with one of them, you're golden.

The best way to learn to sell is to do it. Try to find yourself a mentor you
can talk to about it, and just go for it. If you can learn how to effectively
cold call, you can rule the world.

There are lots of crappy sales books, but there are many good ones. I like
SPIN Selling by Rackham; it's researched, reasonable, and most other solution
selling books that came out afterward just repackage Rackham's results. I like
Jeffrey Gitomer's Little Red Book of Selling. It's mostly about maintaining a
positive attitude while people are telling you no. This is necessary, because
selling is a goddamn emotional roller coaster. Watch out for books aimed at
the hard sell. You can't hard sell a university.

Good luck!

------
sachinag
This is a consultative sale. Also, in academia, you're going to have very long
sales cycles.

If I were you, I'd try to find a half-time independent sales rep and I'd have
one hell of a website. There's absolutely no way that cold-calling is going to
work the way that you think it is; it will take up too much of your time to do
it correctly. (Honestly, my first recommendation is to stay the hell away from
healthcare and education sectors, but looks like that ship has sailed.)

~~~
bhousel
Agree with all points on consultative sales..

I'd like to also suggest to do some research into what kinds of conferences
your clients go to. If it is a niche industry, there are probably one or two
of these a year. You (and your sales rep, if you can find a good one) should
absolutely go to these. Visit the trade booths, go to the happy hours, talk to
everyone. If you can afford it, you should have your own professional looking
booth.

Conferences are where potential clients will go to make a decision to buy, and
it can often have more to do with your personal skills than your technology.
Find out who has the budget or grant money and focus on them - don't spend too
much time talking to people who aren't decision makers or who aren't in a
position to buy - but don't blow them off either, because word of mouth is
very important in consultative sales, and they may one day be potential
clients, or they may refer you to someone that they know who is looking to
buy.

Good luck!

------
jaddison
Reseller and/or affiliate networks come to mind - let them do the selling for
you, for a commission.

This would be easier to accomplish with traditional desktop-type software than
a packaged web-app - but I would argue that it's not impossible.

You might consider resellers that are willing to work with a pay-per-lead,
which likely would work in your favor (protecting your web-app source) more so
than a pay-per-sale model. That way, the resellers send interested parties
(leads) your way, but you close the deal - and no one gets your product
without your say-so.

The normal "protect-your-source" issues arise, but those are out of the
confines of this discussion, I think.

------
grandalf
I'd suggest just making a list of 10 potential clients... then research the
organizations a bit and contact them and ask for a few minutes to present what
you've done.

The key is to realize what you are selling. In the first 30 seconds of a phone
conversation you're selling them on the idea that you are professional and
that they should actually not hang up the phone...

The next step is to mention your product and to get them talking about their
needs. Ideally they tell you a bunch of needs that your product perfectly
addresses.

From there, you have to worry about logistics, such as who is actually going
to make the purchase decision, etc. You should be prepared to work with their
organization and process and to do as many phone calls and online demos as
needed to get everyone comfortable with the product. Also realize that their
purchase timeframe might not be immediate.

The main skill that professional salespeople have is the ability to
efficiently get people to commit to a purchase. One develops a sixth sense for
when to ask for the signed contract, etc. But with any new product, even a
seasoned salesperson is going to have to do some learning about the typical
customer, the product, etc.

I think the best thing to do is just ask "so what's the best way for us to
proceed?" to your most trusted contact in the organization, and let them tell
you how to sell to them.

If it's a high priced product, be prepared to have an in-person meeting before
someone will write you a big check. Once you have signed a few clients then it
may be possible to sign people over the phone.

The hardest sales are the first few, but it sounds like you already have some
happy clients, so you should probably contact them and ask if they might feel
comfortable talking to your potential future clients about the product, etc.

Also, be prepared that some may say "hey, we paid you to develop this and now
you're selling our product to others?". You might want to offer them something
in return (such as free upgrades) and discuss this with them up front to avoid
any confusion, etc.

------
edw519
I believe in keeping things simple. This project sounds like your pride and
joy; you've put a lot of yourself into something that solves someone else's
problem quite well.

Talk to them, understand their problem, and then show them how your software
solves _their_ problem. Remember, it's all about them, not you. That's it.
There are a lot of other details, but they are just that: details.

Focus on solving your customer's problem with your offering. Be yourself,
care, and let the journey take you to their solution.

~~~
consultant
Thanks, you are correct. I really have put a good amount of time into this
niche and truly enjoy it, to the point where I just decided to drop a client
so that I could give this my full attention.

What you describe is how it worked for my first set of customers. I solved the
needs of the first person, and then for each subsequent customer, I was
introduced by the previous one, met with them, and had a 'be myself' approach.
There has never been any paperwork beyond a simple text file describing the
work that will be done, and no one has ever signed a piece of paper. I just
showed what I did for the previous guy and I believe they liked the fact that
I wasn't really pushing a product, I just knew how to develop something that
solved a problem for them. I am very comfortable with this approach and
perhaps I shouldn't change it.

However, pretty soon I will have exhausted the potential clients in my local
area since it's not a huge niche. My thoughts were that some other
organizations might have different attitudes towards forking over a lot of
money to one guy in blue jeans, and that maybe I would benefit from actually
"learning" sales. This thought came from watching this particular interview:

<http://mixergy.com/maponics-darrin-clement/>

He focuses on a mapping niche, and describes how he was able to expand and
sell more expensive software by actually taking formal sales classes.

I really would prefer not to do this and would prefer to just say "check out
what I did for these other folks", but then again I'm willing to do what it
takes.

~~~
bhousel
> He focuses on a mapping niche, and describes how he was able to expand and
> sell more expensive software by actually taking formal sales classes. I
> really would prefer not to do this and would prefer to just say "check out
> what I did for these other folks", but then again I'm willing to do what it
> takes.

There are people out there who _live_ for this sort of thing. It's ok if your
interests lie more in the technical side of things, but you should seek out a
dedicated sales person who has a passion for it.

------
wavesplash
1) You price the product based on what the market will bear. If you say "it
costs $50k" and they say, "great where do we sign?" you're probably selling
too cheap. You need a few 'no's to tell where the top of the pricing range is.

How to guess the initial price? Ask your existing clients how much they'd pay
for an off the shelf product.

2) Read up on Enterprise Sales - you're basically doing a small version of
that. Academics and Unis are notorious for long sales cycles (years).

Good luck!

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NoBSWebDesign
I am in a very similar situation as you are. We have a very niche product that
we sell to higher-ed. We sell it as a subscription model, which we allow them
to pay X years upfront with a contract so that it more closely resembles a
fixed-cost product to better fit their budgets.

As far as cold-calling goes, it really isn't worth it in this industry. The
low conversion combined with the insanely long sales cycles just isn't right
for a cold-call approach. That said, we've modified the cold-call approach by
setting up Google Alerts for phrases which indicate a university that is ripe
with need for our product, and then send them direct product information
tailored to their specific needs.

We've also developed some internal software that helps automate this process.
It has worked very well for us so far.

I would be very interested in talking with you further, as it seems we share a
common market with common obstacles. Please feel free to shoot me an email.

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mahmud
You're standing on a good industry podium, least you could do is have an email
address in your profile. You never know who might be able to sell your
software for you on a commission.

Don't hesitate to shoot _me_ an email :-)

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jonah
It sounds like you've been benefiting from referrals already. Don't give that
up. Academics talk to each other you know. They also go to conferences. You
might consider attending.

I do a lot of work for clients in the apparel industry and it's all been
referral. I also try to go to the bit seasonal shows in Las Vegas and get my
current clients to introduce me to other people they know there. Start
conversations.

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tdziuba
You don't. Accept your failure, go out and get a job.

