Sales Process for Custom vs. Packaged Solutions

Sales Process for Custom vs. Packaged Solutions

I was doing my onsite assessment with a prospect today, which is part of my sales process before I propose to work with somebody. In this assessment I spend at least a day with them and their people either in person or by phone to get to know them, their business, their culture, get to talk to everybody, find out what they think they’re doing vs. what they really are doing, and basically provide to the Founder, the CEO or VP of Sales a set of recommendations that becomes the basis of us working together. One of the things you’ve probably heard me talk about is that I charge for this. I don’t do a free diagnostic because then I don’t believe I actually end up putting the effort into it, and I don’t believe they actually get any value out of it if they’re not paying for it.

All that being said, what I wanted to talk about was an interesting little jam of insight that occurred to me today. This company that I was working with today is a software provider with an application that is a very powerful solution that they sell to large insurance companies. It provides a lot of tangible value and actually solves some pretty important core challenges for these insurance carriers. The problem is that they haven’t been selling a lot of software lately, so I’m there to help them figure out why.

What I came to learn today that I did not know until I was onsite was that this company has only been selling the packaged version of their software for about two years, which coincidentally is the path of revenue decline that they are now presently seeking to fix. So three years ago, give or take, they weren’t selling packaged software. They were selling a custom implementation and custom app development in a vertical, in a niche and around the subject matter technology area that they are experts in.

They were very successful at this for a number of years and had great clients, great stories and great references. Every deal was a one-off, so naturally somewhere along the way like many custom application development providers do, they wisely decided to embark on the path of productization, making their custom software something more like a packaged application, which services vendors have been doing for years. It’s a very time-honored and tested strategy for increasing profits and valuation because if you sell one-offs, you’re limited to the clients you’re working with.

If you have a packaged application, however, your multiples are better. Implementations are more consistent, margins are higher, etc. So they successfully bridged the gap from selling everything as a one-off to selling a slightly customized version of a very standardized product, and they made that transition from the technical standpoint very effectively.

However, the insight to me is that along the way, they forgot or failed to create continuity in their sales process, and here’s what I mean. When you are selling custom application development, think about it. What are you selling? You don’t have anything. You have stuff you’ve done before for others, which kind of makes sense. You don’t have a demo. You don’t have a product sheet. You don’t have a white paper. You might have a case study, but it’s not as generalized. It’s very specific.

So what do you? What does the sales process entail?

The answer is simple. When you are selling a custom solution, you only have play, and that is to ask questions in order to understand them, their world, their needs, their pain and their desires, and then go back and build the application to meet their specifications.

Well, here’s the question for you. When you move from selling custom to selling a packaged application, why would you think the sales process is any different? Why do you think that just because your solution is more repeatable, scalable, etc., that you no longer need to spend the time, the energy and do the work associated with understanding their need, understanding their pain and helping them quantify the benefit?

What happens most often (I’ve seen this in lots of situations actually) is that when we move to packaged software or a packaged application, I don’t know whether it’s through laziness or a flawed assumption, but we move away from real, deep, intimate and impactful discovery and we start talking about the solution before we understand the problem. The message here and what you need to do about this is simple, and that is if you sell a packaged solution, a repeatable solution, whether you used to sell custom or not, your sales process still must start with understanding the prospect.

Until you have a complete understanding of their need, their pain, their desire, their hopes and dreams, it’s almost as if you should pretend that your product doesn’t actually exist, which is perhaps the solution. Maybe the way to ensure you can sell your packaged application or software better is to walk into a sales call with a prospect and just pretend that you actually don’t have anything at all, that you haven’t built it yet.

If you were building it for them, what would they want it to look like?

Before you go and build it, certainly before you talk about it, you need to ask them what they want. Don’t be afraid of this conversation. The common thinking is that if we do that and we make it this blank canvas conversation, then the customer is going to want something and they’re going to tell us they want something that we don’t have. My response to that is if they want something you don’t have and they really want it for good reasons, then you should not be selling them what you do have because it’s not going to meet their needs.

That, however, tends to be less the case. What tends to happen is if you’re in fact thoughtful about your product and offering, and if you’ve built a good product, there’s a strong chance that your solution will be pretty close to what they would be asking you to build if it was completely built custom from scratch.

So part of the sales process will be to highlight, discuss or at least talk about the difference between their dream home, if you will, and the prebuilt house you’ve got. You will have to bridge that gap and understand these three features or this particular aspect of it that we don’t have, and if that is a deal killer or not. Are there other ways to solve it? But you will manage that conversation and what you will find is that the delta, the difference between their ideal and what you have, is probably not all that big.

It’s probably manageable in the sales process, but if you skip this step and decide instead of understanding what their ideal looks like you’re just going to tell them what you’ve got and how cool it is, you’re going to find more often than not that you’re pushing a rock up a hill. You’re trying to create a problem for your solution versus understanding their problem and then presenting a solution that meets their needs.

I’d love to continue this conversation below in the Facebook comments to hear stories about instances where you’ve found yourself pitching a product. Did you catch yourself? Did you realize you were trying to convince them that your product was right versus starting with a deep understanding of their problem? I am very interested to hear your feedback and stories, so in invite you to share below.

By Townsend Wardlaw

photo credit: Alt-n-Anela Duet from the DewFrame via photopin cc