Application Vendors - Avoid Sabotaging Sales With Marketing

Situation

Have you ever lost deals where you knew you had the better product? Have you ever lost deals where the prospect agreed you had a better product? Many reasons exist for losing deals. The two most frequent reasons are poor salesmanship and poor marketing. The sad truth is that in most cases:

Lets take a well-known example outside the software industry. Do you have a VHS or Beta VCR? When VCRs were first introduced, two technologies were available, VHS and Beta. But now, Beta is almost non-existent in the consumer market, VHS won the battle for market share. From the beginning, little doubt existed about which was better Beta over VHS. Even today, professionals use Beta to record and edit video. But good VHS marketing beat great Beta product so now you have a VHS.

Too many application software or services companies believe in product and are always willing to spend that marginal dollar on development. When you hire that extra programmer, you know you will get X lines of code. But what's the story with marketing? When you spend an extra dollar on marketing you can never be certain what you are going to get. Will you get the leads you want? Will the marketplace recognize your company name? Will you be recognized for market leadership? Will you just get lost in the marketing clutter? Marketing can succeed. Marketing can develop leads and make it easier to win deals. On the other hand, poor marketing can actually damage an otherwise successful sales cycle. Marketing is another critical skill that a company must master to be successful.

Tips On How To Succeed

Our years in the application software sales and marketing wars have given us lots of scars. Both success and failures have given us some tips on how to succeed.

1. You cannot delegate marketing
   
   
2. Know your customer and your audience
   
   
3. Don't spend too little (or too much)
   
   
4. Avoid drinking your own cool-aid
   
   
5. It is not (just) about the product
   
   
6. Invest in credibility
   
   
7. Consistency usually beats new messages
   
   
8. Beware of short term thinking
   
   
9. Don't postpone marketing 10. Marketing is seldom a do-it-yourself project

Several of these points need explanation. Let's start with the big one, number 3 - Don't spend too little (or too much). What is the right amount? An excellent book on running successful software company, "Secrets of Software Success" by Hoch, Roeding, Purkert, Lindrer tells us that on average the winners spend about twice as much on sales and marketing than development. Yes, if you are start-up without a product, you should have more development people. But once you have a product, 2X is the right balance to be a winner.

Number 4 - Avoid drinking your own cool-aid. The best marketing does not come from your team sitting around the table and telling each other how smart you are. People who are not part of the everyday team should test messages and ideas. Ask people with contact with the market for input. That includes your sales and consulting people but also customers, analysts, outside consultants, etc. Some hints on getting input from others:

• Sales force they have great contact with the market, but the sales force must be very focused on current deals. What is important to them is often driven by the last deal or their current prospects. Do not take what one of them says as the law, talk to multiple sales people and look for a consensus of opinion.
  
  
• Consulting staff These people know the details and the customers. Some times, they see the world at the detail level to the detriment of being able to help you with marketing. Take any detailed comments and generalize them into marketing level ideas.
  
  
• Customers Assuming your target market is the same as your customers, what better source of input. But customers often suffer from drinking the same cool-aid. Customers often need to be challenged to get at what they really feel. Customers, better than any other source, can answer some questions. A consultant suggested we spend money on a study to see what magazines the CEOs of our target market reads. Instead of spending consultant dollars, we got on the phone and asked the CEOs of our existing customers.
  
  
• Analysts Subscribing to industry analysts pays many dividends. For one, they have a different relationship with the market. Yes, the analysts firms want you to pay them, but you can often gain from their experience by reading public materials, attending their conferences, etc.
  
  
• External Consultants These people want your money also. According to their consulting roles, they can be too much like analysts or too much like your internal consulting staff. Look for people with strong application software marketing backgrounds and in-depth knowledge of your market.

Number 5 It is not (just) about the product. Many companies have a great product with great technology. They talk about the technology and product functions and expect the prospects and customers to understand the value. Maybe the IT people know the value in .NET or XML or whatever, but the business people do not and they do not care about these subjects. They do care about the impact of the technology and the product features on the prospect's business they understand and want to know what your solution can do for their business and the ROI. They are not buying your technology. They are not buying product features. They are buying what your product can do for their business that is what you should be talking about.

Do You Need a Marketing Check-up?

Give your marketing a check up. Is it helping your sales efforts? Is it bringing in the right prospects? Is it making it easier for the sales team to close business? Do deals close faster due to your marketing? If you cannot answer yes to these questions, maybe your marketing is sabotaging your sales. Then again, if you answer yes, are you drinking your own cool-aid?

About the Authors

Olin Thompson is the managing partner of Process ERP Partners. (www.processerp.com). His firm specializes in helping application software companies effectively use marketing to deliver sales. He has over 25 years of executive level sales and marketing experience in the process industries application software market.

Olin can be reached at olin@processerp.com.

Jim Brown is the President of Tech-Clarity Associates; a consulting firm dedicated to helping software companies communicate the value of their offerings to their market (www.tech-clarity.com). He has served as a marketing executive for software companies specializing in PLM and process manufacturing solutions and has over 15 years of experience in management consulting and application software.

Jim can be reached at jim.brown@tech-clarity.com.