Software buyers, terrible sales results & the vision thing (plus a bit of Seinfeld wisdom...)

Sometimes, it’s a miracle that companies get any of the software they’d like to buy. Their processes and people are notorious for stalling, stopping and shrinking potential deals.  Worse, software buyers rarely realize how they look to technology sellers. Hint: it’s not a good look.

Technology vendors are great at understanding which prospects will: 

• actually close a deal
• get the solution implemented
• become a great reference customer
• buy the whole suite instead of just a couple modules
• etc. 

But too many prospective customers will:

• be unable to reach a consensus as to what modules to buy or which vendor to choose
• have team members that fight any potential solution that isn’t their personal favorite
• fight amongst themselves
• postpone any decision for months or years
• scale back the scope of the deal to a just a couple of functional modules as that’s all they can agree upon.

In other words, customers will commit self-inflicted wounds when it comes to technology acquisitions. Worse, they likely don’t realize that technology sales people can figure out which ones of them will actually do a real, material transaction. 

Here’s a quick cheat sheet to help you understand if your firm is about to expend a lot of time and money on its latest software selection effort that’s likely going to fail:

• Does the project have a clear, stated vision that executives throughout the company have signed off on? Have you shared that vision with potential technology vendors?
• Are executives clear on why so many prior selections ended in ‘no-selection’, slipped deal completion dates, or, a materially reduced scope? How do you convince technology vendors that this won’t happen again? 
• Does the selection team know how to avoid airing differences amongst themselves in front of vendors? 
• Do the selection team members know how to make decisions for the good of the company and not just for the function (e.g., Accounts Payable) they represent? 
• Were the selection team members chosen for their ability to create consensus?
• Does the selection team understand that nostalgia (for old methods and technologies) is not a strategy? Does your firm look like it is open to and can embrace change?
• Does the company have change management and communication competencies to help the selection team ‘sell’ the deal internally and quickly?

Technology vendors cannot afford to chase every potential deal that they become aware of and they certainly can’t afford to chase the unprofitable, shrinking or unwinnable deals. So, if your firm has a history of no-decisions, deferred decisions, and/or, materially scaled back deals, vendors will cut you loose quickly. Indecision, delayed decisions, arguments within the team, etc. all drive vendors to drop out of deals fast. Your firm might want a specific vendor in a deal but they’ll pass if your firm is signaling its indecisive, fragmented flakiness. 

Vision importance

The vision issue is a key one, believe it or not. Vendors like a prospect to have a plan. The want to see if you’ll want more than one or two niche products. In fact, their interest in a potential deal grows materially as it approaches a suite-deal and declines markedly when it approaches a best-of-breed, niche deal.  

A vision means there’s more to this deal than just the acquisition of a piece of technology. The vision usually ties the new technology to:

• New/better business outcomes
• Competitive advantage (not just competitive parity) potential
• Outsized financial returns
• New efficiencies that flow to the bottom line
• Better business decisions
• A willingness to change
• New process designs 
• New performance metrics
• Etc.

And, the vision does one other, powerful thing: It tells the vendor that the selection team and prospect leadership have a unified idea for the future of the firm. Think about it, no vendor wants to invest time and money talking to a prospect that doesn’t know what they want, the business benefits they are expecting, etc. Vendors want to talk to prospects that know what they want and are of one mind about this. Vendors lose money on deals when prospects stop the selection process to ‘socialize’ new ideas and concepts that should have been part of a pre-selection, vision setting process. 

Software buyers, in my experience, fail to understand the vendor’s full cost of sales (and, just as important, the opportunity cost of pursuing your deal to the exclusion of other prospects’ deals). Vendors will not pursue a deal if:

• The deal won’t close
• The deal could get materially scaled back
• The deal process takes too long
• The customer can’t make up its mind
• There’s no process for the selection committee to reach a consensus decision 
• Etc. 

Vendors try to manage your firm back to a decision

If you don’t believe me, read the book The Challenger Customer by Brent Adamson and Matthew Dixon. That book could be an eye-opener for many technology buyers as it lays out the attack plan technology sellers will use in getting a sales effort back on track. One key bit of insight that should get every reader’s attention is how sales professionals will try to take ‘control of consensus creation’. 

In a typical deal, a prospective technology buyer will:

• Do a lot of homework or research online to identify potential vendors, create a long and short list of potential vendors, and, develop a passable RFP (request for proposal).
• Collect a number of requirements from different constituents and potential software users. Unfortunately, these requirements may reflect more of their current environment and very little of the to-be environment the company really needs.
• Not develop much of a vision. Some prospects think this should come after they’ve had a chance to see what different solutions can do today. Vendors, unfortunately, see a prospect with no imagination and/or no apparent desire to really do things differently. If the ‘vision’ looks like the status quo, then only an incumbent vendor will stay in the deal as there is no proof that the prospect can/will change much at all. 

The lack of a stated vision is further hampered as there is no single view about the future of the company, its needs and its intended use of technologies. Worse, some factions within the prospect’s firm may not want to change, some only want to change a little bit, and, some might want to see big transformational change. How can one technology provider satisfy such divergent needs? They can’t. 

Bad sales professionals will ask each software selection team member what they want/need in a new solution and then direct the prospect to a specific capability that addresses this. Unfortunately, this won’t work as the needs of one constituent may conflict with the needs or desires of another. No, what has to happen is that the sales person must get the whole selection team together and facilitate a process to get everyone on the same page. This is not easy work and it can be expensive, too, especially since some teams can never reach consensus.

That’s right, some teams can’t agree on some key points let alone a compelling vision. Why?  

• The number of stakeholders in the deal can be intense. There can be multiple functional leads (e.g., CFO, CHRO, CSO, CIO, Controller, CRO, COO, etc.) each with their own unique business needs, business priorities, personnel challenges, etc. 
• There can be number of other entities who will want to influence the deal. These include inside and outside counsel, procurement, the board of directors, systems integrators that want to push the software that they have in their ‘solutions’ and more. Some of this advice is well-meaning and some of it is simply a different kind of a sales pitch. 
• Some functional groups already have satisfactory systems and don’t see a reason to change anything. They can come up with dozens of reasons to kill or declaw this effort.
• Some functional groups are so fed up with old, poorly performing or manual systems that they won’t wait for a long full suite (e.g., ERP) selection and implementation effort to complete. Instead, they’ll try to secede from or derail the selection and get some less-than-ideal best of breed solution for their function/department/location now.
• Some selection team members hate change. They are a perverse lot in that they know all of the problems with the status quo but would rather stay with the devil they know instead of the one they don’t know. 
• And, my favorite challenge of all time is the super negative client project team member who never wastes a chance to say harsh, divisive and/or negative things.

And that’s not all. You’ll find liars, psychopaths, passive-aggressive, passive-resistive, openly confrontational and other pathologies at play. You’ll find people who want to move very quickly and others that plod along at a negligible pace. You’ll also see people who love living in the past and others who can’t ever make a decision. The latter are easy to spot as they can never pick a place for the team to have lunch. If you can imagine other forms of team disfunctionality, I’m confident they are on display at a technology selection effort near you!

Poor vision

What’s in a great vision?  While a project charter is a good first step, it takes more than a project charter to capture the totality of a great vision.  Asana noted :

A project charter is an elevator pitch of your project objectives, project scope, and project responsibilities in order to get approval from key project stakeholders. In the charter, you should provide a short, succinct explanation of the main elements of your project before you get started. By creating a project charter before getting started on other, more in-depth project planning documents, you can get approval or course-correct if necessary.

A project vision will contain more and be more detailed/nuanced in its content. For example, the vision should cover topics like:

• A realistic assessment of the status quo
  • Processes
  • People
  • Technology
  • Competitors
  • Capabilities
  • Etc.
• A thoughtful to-be state
  • Desired benefits/hoped for value proposition
  • Key changes in processes
  • Description of how advanced technologies will be deployed
  • Key security and ethical positions that must be respected
  • Critical business capabilities needed by persona
• Specific business issues top management wants addressed or mitigated
• Key business changes the new technologies will support
• Major issues to be navigated and initial thoughts on same:
  • Clearing out of technical debt
  • Moving from monthly to real-time to predictive business data and processes
  • Implementation of advanced technologies (e.g., generative-AI)
  • Elimination of specific wasteful items:
    • Paper
    • Spreadsheets
    • Manual integrations
    • Data synchronization issues
    • Etc.
  • Integration and platform
  • Risks identification and mitigation strategies 

Ideally...

Typically, client personnel are rarely on the same page, internally, on what the company wants to be when it grows up. Clients do not necessarily have a shared vision for the company. If there’s any vision, it usually ends at someone’s functional or departmental boundary.  Even when clients can agree on a common problem, they don’t necessarily agree on the desired solution. 

Before a prospective technology buyer calls in a potential vendor or issues an RFP, they need to develop a great vision and collect their support for it. The goal of the vision should be to:

• Push the organization into a new space. If it doesn’t make some people uncomfortable, it’s probably too incremental, low-risk and low benefit-generating to be worth pursuing. If it’s too aggressive, it will scare everyone off including key project sponsors. Striking the right balance is key.   
• Identify a new corporate destination ( a la ‘X’ marks the spot) where the company wants to be. I’ve heard clients describe these destinations:
  • The company wants to double in size within 3-5 years but not necessarily double its support staff.
  • The company previously missed out on two acquisitions (a rarity in their industry) and never wants its poor performing systems and processes be a limiting factor in future inorganic growth.
  • This domestic company plans to expand internationally for the first time and has targeted three countries for immediate support.
  • The company is planning to offer services with its products (or vice versa). 

Knowing the destination is incredibly helpful as it brings a focus to the selection and related project activities. It also helps the team realize what old habits, technology, etc. are past their prime and should be replaced or retired. And, a destination helps focus the selection team, other company employees and the vendors on the real prize. It helps add context to the effort and acts as the team’s North Star. 

The best outcome from the vision generation process is to create a vision that gets widespread support from within the prospect’s organization. That sounds easy but it rarely is. Individuals may try to optimize their piece of the organization at the expense of other parts of the company (e.g., Operations pushes for one ERP solution due to its great manufacturing functionality but this will hurt HR as the preferred vendor has a rudimentary HRMS). Alternatively, some team members will fight any change as they love the (highly flawed) status quo. 

I’ve seen three methods work in building consensus around a new vision. The most common method is use a neutral facilitator to guide the team to a shared vision.  In another situation, I took the selection team to the headquarters of several potential technology vendors and integrators. This selection team realized that one of the vendors who they liked a lot (on paper), consistently lied to them during this HQ visit. That lack of ethics really irked the selection team and they quickly coalesced around a different vendor as its functionality and business ethics were more aligned with their own firm. Another firm assigned different team members to act as advocates for a solution that wasn’t the one they were hoping would win. That effort made the more reticent or passive-resistive members of the team start to see other people’s perspectives and to look at other solutions with a more open mind. 

My take

Long before The Challenger Customer book came out, the same authors had penned The Challenger Sale. While both books are mostly aimed at helping sales people understand and succeed in selling complex solutions (e.g., ERP software), buyers of complex tech should also read these books. In doing so, you’ll gain an in-depth perspective of how sales and marketing teams will target your firm and how they’re evaluating your worthiness as a prospect. 

My diginomica colleague, Jon Reed, did a piece on that first book and recorded a short video with me about how tech buying/selling was changing. That was in 2014, but it’s still relevant. 

While the latter book has been out a couple of years, the problems with prospective customers remain. I’m still seeing “hurry up and wait” decisions, “no decision”, big plans that disintegrate into small efforts, etc. The problem is real and needs to be addressed. Customers that don’t address their inability to generate a consensus around a vision will get a reputation for crying wolf. And, even then, they won’t understand why vendors won’t spend time with them. 

The kind of customer that gets the best vendors, the most vendor attention, etc. is the one that can commit. There’s an episode of Seinfeld where the characters Jerry and George understand the power of commitment:  

George: I thought Mulva hated you.

Jerry: Yeah, so did I. You know what? I bet it was the engagement. I've shown I can go all the way.

George: All the way?

Jerry: Not our "all the way", their "all the way." I got the stink of responsibility on me.

George: Yeah, and you were engaged for like a minute, I was engaged for a year.

Jerry: You stink worse than I do!

George: I'm feeling something else here, Jerry!”

Is your selection team feeling something, too?

Bottom line: Before you consider a new tech acquisition, get the vision and buying process right.