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Selling Smoke

Wednesday, September 14, 2005

Advice from the real world about selling IT projects

Translated from El arte de vender humo by Sergio Montoro Ten published in VERSIÓNCERØ.

Selling software projects is all about using the imagination. It's about convincing a client that something which cannot be seen now will materialize in the form of tangible benefits for the business later if the financial investment is made.

Typically the 'forces' that sell software (the IT salesmen) are divided into three groups: the scouts, the visitors and the protectors.

  • The scouts call the client and identify those who have the potential to buy.

  • The visitors go and speak with the client and take notes of the requirements.

  • The protectors prepare the demonstrations of the product and take care of the pre-project technical issues.

The people who are never allowed to visit the client are the IT experts. Why? Simply because the majority of them are poor salesmen; their bosses know this and consequently don't trust them.

The sale is the beginning and all beginnings are delicate. During the process of winning the sale the project is like a new born infant that needs undivided attention. IT salesmen employ a battery of tools to care for the nascent buds.

1. Details matter

In the absence of other objective criteria, the client will tend to think that the quality of the final project is comparable to the quality of what he sees in the salesmen. You must have elegant visiting cards, show impeccable Powerpoints and wear new, recently ironed ties. This has nothing to do with the personal vanity; it's a mechanism of generating a good first impression in the client.

2. The best way to get clients is to have clients

IT consultancy works by a system of referral. Clients are basically interested in 4 things:
a) what other clients does the provider have
b) what is its turnover
c) how many staff does it have
d) how long has it been operating

It is a waste of time talking about products before having satisfied these preliminary concerns because the client will not pay any attention to the product until he has checked the references.

3. Sell urgent needs, never improvements

It is well known, and has been proven, that people go to the dentist when something hurts, and apart from rare exceptions, never at any other time.

The same principle applies with IT projects: clients buy when something hurts.

If they don't notice that something is hurting, the best way of interesting them is not to talk about what they will gain by implementing the project, but what they will lose if they don't implement. This was the effect behind the Internet bubble: either the client got on the Internet train, or the client got left behind.

In the case where you have to sell improvements, it's better never to sell improvements of over 10% because: a) its likely that the client won't believe it and b) you destroy the opportunity of selling another 10% of improvements in a later project.

4. The weight of project documentation is important

A good project on paper can win a client. The majority of consultancies often don't work too hard in making offers because they 'cast the fly' from one client to another without the patience to play one client thoroughly.

5. Never look for problems in the early phase of the sale

This is the principle reason why IT experts are not sent to visit clients. When the client makes a request, the IT expert begins to look in every direction for a creative solution to the technical problems that arise. This non-verbal behaviour is noticed by the client who deduces that the IT expert doesn't have any idea about how to solve the problem. There is only one appropriate answer to every client request, and that is YES. The accomplished salesman always says, “Yes”, and later takes it back if it should become necessary. Unfortunately, many salesmen say yes to everything, never retracting, and end up by getting in a mess both with the functionality and the time-scales.

6. Don't confuse sincerity with commercial suicide

One thing is to be truthful and another is to make a startling assertion that can leave the client in a state of shock. If it is good not to lie, it is also good not to tell the whole truth all the time. Some clients create an atmosphere of confidence in which it seems that one can explain to them how things really are. However this is almost always a trick designed to find out the underlying truth which can be later used against the supplier.

7. The demo must never fail

It is instructive to remember the moment when Bill Gates got the blue screen of death during a demonstration of Windows. This little mishap probably did more harm to the image of the stability of Windows than would have been done by a thousand unfavourable reports by experts. If the demo fails once, the client will go away with the impression that the product doesn't work; if it fails twice, the client will think that the product will never work.

8. The demo should be an interactive experience

Good salesmen talk while they are showing the demo. They don't restrict themselves to navigating through the screens but paint a picture of the successful future in the client's mind. Some of the most experienced distract the client while opening screens that take a long time to load and deliberately avoid showing functionality that isn't yet well finished.

9. The price is never real

There are two tactics for winning an account: dumping and 'sticking'[1].

  • Dumping is writing a very restrictive definition in the offer and asking a very low price. The client buys because the price is low and only later discovers that the project does not cover all his needs. But now he is hooked and has to continue with the original provider, sometimes because he can't explain to his boss why he made a mistake over the choice of supplier.

  • Sticking is useful for clients that have a lot of money and are in a hurry or frightened. It is taking as much money in advance as possible and then using this cushion to manoeuvre, creating enhanced functionality that was not originally foreseen as the requirement appears.

One note of warning about these practices: they are very dangerous when tendering to public organisations. Their rules of engagement often eliminate offers that are either too high or too low. Also, the supplier often has to post a guarantee and satisfy the specifications of the contract without changing a comma. This makes dumping difficult because the contact is often ambiguous and it is suicide to embark on such a project for a low price.

10. The myth of the agency that offers comprehensive services

The majority of clients are vague at the time of purchase. Why wouldn't they be? Buying an IT system is really complicated and can tax the brain exceedingly. For this reason it seems easier to delegate the responsibility of providing all the services to a single supplier.

In addition, clients are often worried about having to co-ordinate various suppliers themselves because in most cases they don't know how to.

Faced with two identical proposals, one from a single supplier and another from three suppliers, the proposal from the single supplier will always win.

There is an exception. A couple of years ago a senior director of Renfe[2] commented to me that a man came into his office and said, “I can deliver anything that you ask”. If the client is really professional, he will know what the real abilities of the provider are, and if he doesn't know, he will investigate. Therefore, it is better not to exaggerate too much.

11. Cover your back to keep the account

In order to keep an account it is important not to make a mistake that seriously affects operational efficiency in the client. Those who make great decisions, but also make bad mistakes will end up by losing the account. Those who can never be blamed for any failure may keep the account for many years, being labelled as trustworthy providers. It's best to be meticulously cautious, and if in spite of this something still breaks, to have the documented proof that it was the client who made the error.

12. Discretion is fundamental

Clients, especially big ones, don't like their name being used without permission (and without sharing some of the glory). Worse still is revealing details of their strategy in public. The majority of the “confidential” information you may have access to is worthless, but clients are nevertheless very protective of it.

[Translator's notes:

1. The Spanish original is 'rejoneo' which is a form of bullfighting where the bull is stabbed repeatedly with a wooden lance from the back of a horse.

2. Renfe is the Spanish national rail service.]


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