What does selling clothes to Macy’s have to do with selling software, and cloud services, to enterprises?
Earlier today, I was speaking with my brother-in-law, entrepreneur and consultant Kevin Pearl. Before starting a firm to improve capture of billing time for attorneys, accountants and consultants; before serving as a turnaround consultant; before building a firm that sold software to manage venture capital portfolios; Kevin ran a firm that sold clothing to large well-known clothing retailers.
Kevin and I were discussing how a technology vendor can get a potential customer from pilot to sold. While it can be quite hard to get in the door and sell a pilot, it is much harder to close a full sale. After all, unlike a pilot, a full sale:
- Costs a lot of money.
- Requires a multi-year commitment.
- Ties at least part of someone’s reputation to the project.
- Involves complex contracts, and therefore legal involvement.
How do you get from pilot to full sale? Many entrepreneurs make the mistake of viewing a pilot as a “free sample”: give it away, support them, and hope they come back for a complete buy.
Unless you want to be stuck forever in pilots, you always need to make a pilot nothing more or less than the first delivery of the deal. The move from pilot to full production implementation should be a natural progression that is put in place from the very beginning.
Kevin explained that he learned the lesson in selling clothing. Large retailers almost never will buy large stock from a new supplier. They need to see quality, delivery, service, reliability. Sound familiar? This is no different than Bank of America buying software from Pied Piper. Start small, see how they work, if they can deliver, and only later go all in.
However, the real trick is not to get the pilot. If you managed to get as far as having a large retailer pilot your goods, do you want to kill the momentum by going through the entire process again when the buyer is excited to buy everything you have?
To succeed in clothing, you need to ensure that the pilot itself is structured and your team is ready to flip from pilot to full sale with no friction.
The exact same principles apply when selling software. The enterprise executive who agrees to pilot your software is hesitant but willing. After your pilot absolutely blows them away, the sponsor wants it right now. Unless you make it incredibly easy to move to production, and are ready, willing and able to support them, the deal will fail.
Of course, sales is a numbers game. Only some percentage of those at the “pilot” stage in the funnel actually will want to move to production. For those few who do, don’t you want to make it simple?
This is one of the advantages of the cloud model. In true cloud, there is no such thing as “pilot installation” or “production support.” Every installation is the same, every customer is the same, there is one platform, one support team, one multi-tiered licensing model. Putting a customer in pilot is putting them in production, at the lowest tier possible.
Operating as a true cloud service (emphatically not what too many companies call “cloud”) forces you to treat every pilot as just another production customer, and make the transition from pilot to full sale painless.
On the other hand, if the “cost of on boarding” is high, leading you to do reduced support or special cases for a pilot, in case it doesn’t pan out, your cloud model is not true cloud, and a red flag should go up.
What is your prospect-to-pilot-to-production process? Is it painless and friction-free? Do you treat every customer as production, or is it too cumbersome and expensive?
How much revenue might you be walking away from?
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