When I was a wet behind the ears sales rep in the Rolling Meadow’s Illinois branch office in 1986 (yes, they had computers back then :)), I remember the big sign that hung on the wall;
Calls + Demos = Sales
Now this office sold everything from PCs to copiers (yes, IBM sold copiers) to mini computers (S34, 36, 38, and later AS/400 and RS6000s) and the biggest S360 Mainframes. Though the sign belonged to the “Office Machines”, ie Copiers, team, I quickly learned in my territory of small manufacturers and distributors, the key to selling the minicomputer lay in not just having the right software package, but in putting a killer demo in front of the customer. As Jerry Maguire might say, “show me the money” and I say then and now, “show me the demo”.
Fast forward 25 years or so and I now have come to the corrolary to this sign for B2B technology vendors:
Marketing + Experience = Sales
As I have blogged about extensively, I believe that B2B technology sales and marketing is being transformed, as we move from products to services, we must move from traditional evaluation based product sales to experienced based service sales, this is true in SaaS models but in many other places too. In fact, just walk into any Apple store and see this in action, they are built to be giant experience labs, contrast that to the traditional cell phone store or Best Buy with product under glass covered cabinet shelfs or sitting tied down on turned off or canned displays.
Why is it then that B2B Software and SaaS providers continue to hide their experiences in the equivalent of a locked glass cabinet, behind weeks of qualification and sales calls that make a customer “prove” that they should be able to give it a go? Why not put the experience (trial, freemium, demo instance, whatever) front and center in your go to market?
I believe there are 3 main “reasons” for this hesitancy. They are:
1) The belief that the customer will not see enough “value” in the trial or demo experience.
2) The belief that my competitors will learn so much that this will put them at an advantage over us.
3) They simply haven’t invested yet (mentally or financially) in transforming their mindset, service and tactics to take advantage of experience marketing.
As you might guess, none of these reasons hold water for me. The first and second are simply outdated vestiges of the old way of thinking. If #1 is true, than shame on you for not delivering value, you best be fixing that regardless of your go to market strategy.
Reason #2 is just living in a fantasy land. First of all, a determined competitor will get a hold of your product or service, even if you spend a lot of effort and time to prevent it. Without passing judgement on tactics, I’ve seen shell companies, resellers, consultants and others to be effective paths for “back door” acquisition. It’s really not hard.
As for reason #3, rest assured, if you aren’t making this investment, one of your existing or soon to be competitors is. EVERY market is being disrupted and re-invented, you best be the one to do it to yourself. You can’t afford not to!
So with that I’d like to declare 2012 the “Year of Experience Marketing”…care to come along??
Good article, and your observations about experience are correct, but I don't feel they can be applied across the whole SaaS model scale, which varies from low-complexity, no-touch, web self service at the low end, to high-complexity, high-touch enterprise sales at the top end (see slide 46 in this presentation: http://www.forentrepreneurs.com/saas-business-models-slide-deck/).
While an ongoing aim should be to always simplify and drive costs out of your sales model by favouring the experience factor, there is only so far you can go for certain functional areas, eg CRM, ERP, HR and PPM, for example.
Even after providing “experience” videos and webinars, a prospect still needs to move up to face time with the company for next steps.
Michael Gentle (Cloud Advisory)
Insightful comments Michael. While I agree there is always a role for higher touch higher end sales, especially to enterprises, I still see this transformation playing out in that end of the market.
ALL buyers are human, and human learn best through experience. I am of the strong belief, that even higher end sales need true experiences, not just videos and webinars. ServiceNow is a good example of an incredibly fast growing SaaS provider in a complex enterprise space, who has embraced experience marketing, putting a fully functioning demo instance of their service live on their site. This is a long way from the traditional gated demo!
Great trends to keep watching…
I think we're on the same wavelength on the importance of experience and that there's lots of room for improvement for vendors to inject the ServiceNow type of demos into their sales model. But we place the dividing line between experience and face time at different points on the scale.
The experience demo approach, as impressive as it is (eg ServiceNow) is not without risks however, especially for complex software, which I define as software that integrates processes across functional boundaries, eg PPM (planning, budgeting, project management, cost management, invoicing/chargebacks) or CRM (marketing, sales, customer service). This is because every company’s requirements are different in terms of where they are on the maturity scale and what specific portion (initially usually small) of the overall process they have problems in and need the software to help them. For this, experience demos can do you a disservice because it could scare the prospect away and/or get him to lose focus on what problem he’s trying to resolve. This is especially true for senior management, who are not into demos anyway, since it is their teams and not them that actually use the software
When I ran pre-sales at a PPM vendor, I soon put an end to first-meeting demos with prospects, even if they requested it, because it got everyone off on the wrong footing. First meetings with prospects (well qualified) became a session to understand what their problems were. Tailored demos then followed – or did not if there was a poor fit – which allowed the proper focus. I don’t see the validity of this approach changing anytime soon for complex software, even with SaaS.
As with most things, it’s about finding the middle ground and knowing when to change gear based on the terrain. You’ve got a shorter gearbox than mine!
LOL…this is a fascinating debate. I was raised with the mindset exactly as you described, “I soon put an end to first-meeting demos with prospects, even if they requested it, because it got everyone off on the wrong footing. First meetings with prospects (well qualified) became a session to understand what their problems were. Tailored demos then followed” and totally 100% get the point and agree but…
I just think this is changing, the bar is moving faster than we are adjusting tactics. I would much rather err on the side of showing too much, and raise the bar on expectation of value communication on out of box experience, putting that burden on great design and marketing!!!
Is is just a question of percentage, and each of us giving different weightings to experience vs face-time? Or are you saying there should be no post-experience on-site demos in the SaaS world?
No, I am saying that the sales cycle can be compressed by giving even enterprise folks early experience, and then driving easy and well focused DEMO/POC process and cycles, violent agreement 🙂
For the reasons mentioned above, having a pricing model that works for both your audience and your product is an essential component of your business plan.