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This detection process doesn't detect toxic customers, it detects corporate customers at large companies. It's fine for a small startup to cater to small start
by spolsky 16y ago
This detection process doesn't detect toxic customers, it detects corporate customers at large companies.
It's fine for a small startup to cater to small startups, but the big companies have big budgets, and eventually, you'll be making 80% of your money off of them, so learning how to deal with them can be helpful.
1. Big companies often have purchasing departments actually do the purchase. They are trained to expect discounts and the people in the purchasing department know a lot more about asking for discounts than they know about software, because that is their specialized role in the organization. If you politely tell them that you have one price for everyone, they'll still purchase, because the purchasing department ususally doesn't have the power to stop the purchase.
2. Those 80-question checklists usually come out of the following, typical corporate process:
* A team of people identifies a need for software
* The team meets to agree on everything they need
* The junior person on the team is tasked with evaluating 12 possible products to see which one is best
* That person makes up a spreadsheet and sends it to each of the vendors hoping that they will do his homework for him
* The vendors who have decent presales support or sales teams fill out the spreadsheets by marking everything as "Yes" or "Yes with a footnote" and get the deal.
This also explains the "multiple questions that can be answered from a website" -- it's a sign of a person who has been put in charge of evaluating multiple products, not a sign of a toxic customer.
3. Multiple contacts through multiple channels are usually the sign of multiple interested parties at the client site. You can't sell to big companies without touching multiple people. One of a salesperson's most important jobs is helping the customer themselves get organized and make a purchase. A good salesperson helps the person who wants your software navigate their own corporate purchasing politics.
Summary: while it's fine to turn away truly toxic customers, and you are welcome to decide that you'd rather sell to the starving startup founders on Y-combinator who would rather spend 2 hours scouring your website than deal with a salesperson, the corporate customers turn out to be remarkably price-insensitive, once they make a purchase they will keep paying you maintenance for years long after the product is not even in use, and they're just as likely to leave you alone as the small guys, but they do have "multiple stakeholders" and if you want to sell to them you need a process that matches their reality.
- StavrosK 16y agoWell, this is the first piece of actual experience I've gotten from the web in a while, and I didn't even have to screw anything up! I have a feeling it will come in handy in the future, thanks Joel.
- arethuza 16y agoHaving been on both side of the enterprise sales process I think this is a remarkably insightful post. A lot of this goes to explain why enterprise software often needs to be quite expensive - you have to pay for a lot of time and effort from sales and technical pre-sales people hand-holding potential customers and helping them through their software purchasing process. [Edit: I didn't notice who wrote that comment before replying!]
- arethuza 16y agoActually, there might be a market for some kind of tool to help enterprises gather software requirements, create shortlist of candidate vendors and allow the vendors to reply online.
- HeyLaughingBoy 16y agoWell, software for generalized decision making already exists so I can certainly see a market for more specialized versions.
- Hoff 16y agoMicrosoft Excel owns that niche. If you're going to aim for the same niche, it'll likely involve a web service for creating RFQs and also for building up a database of both the requests as well as building up the feature loci of the various queries; you'll need to differentiate your service from the aforementioned Excel and from Google Docs and various of the testing services. Acquiring and then maintaining sufficient feature data (whether via web services or scraping) is probably going to be the tough part. Look around for folks already dealing in electronic purchase, e-procurment, and particularly at SAP.
- dedward 16y ago