I do a lot of work for software companies, which is the primary area of my background. I’m now working for a smaller software company, and realized a connection to how these small software companies create action in their prospect base and eventually experience explosive growth.
They sell to the
fear of inaction in their prospect base.
If you go to Hoovers.com, which is a company database service that serves as a key pre-calling planning tool for researching your targets, you’ll find almost 3,000 companies in the United States whose primary industry is Computer Software. Every one of these companies will claim to have a strong value proposition – otherwise they wouldn’t be in business.
Now, think about some of the big software companies in the world – companies like SAP & Oracle, who have experienced explosive growth. Take a look at a company like Hyperion who was acquired by Oracle for $3.3B. They have strong value propositions, right? However, what was it that made them what they are today? Was it that SAP’s marketers and sales professionals focused on how they could automate and integrate back office functions? Was it that Hyperion’s marketers focused on how they could tackle the vexing problem of information availability throughout the organization? In some ways, the answer is “yes”, but the reason these companies have the value they do is because they found the fear of inaction in their prospect base, and focused on that.
SAP really took off in the late 90’s, where it was like selling at a drive-thru window (Companies basically came to the window, told them they needed their technology now, and handed over millions of dollars). It wasn’t because these companies wanted to enter sales order information only once, and have that data flow seamlessly to finance, manufacturing, distribution and human resources. It was because SAP found the fear of inaction in their prospect base – Y2K (the result of a practice in early computer program design that caused some date-related processing to operate incorrectly for dates and times on and after January 1, 2000, scaring the world to believe that the world would end, planes would fall out of the sky and cats & dogs would live together in harmony because systems would think that January 1, 2000 was actually January 1, 1900).
Hyperion had a value of $3.3B not only because of how they help organizations do their financial consolidations better – it was because they found the fear of inaction in their prospect base – Sarbanes-Oxley (a United States federal law passed in response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Peregrine Systems and WorldCom, thus creating a scare within publicly held companies that has them believing their executives would live the rest of their lives in an orange jumpsuit if they don’t comply).
What fear do your customers have if they don’t act NOW? Is simply doing what they do now, but better, enough for them to take action? If it was, then companies all over the world would be spending all of their money on software.
For whatever solution you’re selling, think about the “what if”. What if my prospect decides to keep doing things the way they currently are at the pace they’re currently doing it? If the answer is basically “nothing”, then you could be facing slow growth, or eventual slow decline. People DO, in fact, buy things because it will make their lives better. But companies spend lots of money fixing problems that cannot be ignored.
This isn’t an easy thing to figure out – but if you can make the connection, your sales cycles will shorten, your deal sizes will rise, and you may have a company that we will all have heard of.
