Question

Topic: Strategy

Sales Dimensions Of A Captive Software Product

Posted by Anonymous on 12/25/2009 at 4:44 AM ET 500 Points
Hi,

We are in the business helping our very large sized clients save money from their annual spending. While we priced our product at 10% from the savings they achieve exploring our software product available "On Demand". I would like to invite advices on "The Critical Success Factors or Sales Dimensions" of this product. The target contact is CxOs.

Please advice.

Thanks in advance.

Sunil
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RESPONSES

  • Posted by Jay Hamilton-Roth on 12/25/2009 at 9:28 AM Accepted
    I'm not sure I totally understand your business model.

    Are you offering a way for businesses to use their same vendors, but somehow have negotiated a better price with these vendors that you're passing along? Or, are you offering to replace their existing vendors with your offerings?

    If the latter, the biggest problem you've got to overcome is trust. They don't know you. They don't know if they should entrust their business in your hands. Do you have a long track record, lots of testimonials, and case studies? Can you guarantee savings from their existing vendors (not just today, but into the future)?
  • Posted by Frank Hurtte on 12/26/2009 at 2:34 PM Accepted
    Sunil,
    Your value proposition is well founded. I have helped other companies that offer no risk work - they receive their income from savings.

    But the issue is risk and inconvenience. You can overcome the risk issue by continually asking your new clients to tell about their experience. The incovenience goes away when you develop relationships at both top and bottom fo the organization.
  • Posted by steven.alker on 1/5/2010 at 11:27 AM Member
    Sunil

    Sorry you closed this question out so quickly - especially over the Christmas break!

    We've often done payment by return options, most of which were stopped by finance directors unless there was a stop-loss on their potential payments.

    For example, a CRM and sales forecasting system gave a return on an investment in a time frame we conservatively calculated to be 21 weeks and a share of the savings based on a two year contract seemed to be an equitable way of getting round the capital expenditure of £70,000 which was not immediately available from the client.

    Onece in place and working, it became obvious that their savings and indeed their enhanced profits were much higher than they or we had anticipated and that over a 2 year contract, they would pay us about £200,000 for a system worth £70,000 (And save £400,000 themselves and earn an extra Lord knows what)

    We felt that this was so inequitable that for the sake of future relations and publicity, we let them buy out the contract for a small premium.

    I'm anticipating that the good will and publicity generated will eventually repay our largess. After all, even we didn't expect the ROI to be fulfilled before we left the building!

    Steve
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