Stop doing product demos

This week, I responded to an outbound sales email from a software company focusing on customer success. The last line of the rep’s email was:

I would appreciate the opportunity to speak with you for a few minutes. When would be a good time to call?

I replied:

let’s chat. I can do Wed 2:30-4pm or Thurs b/t 3-5pm Pacific

He then replied with a one-hour meeting invite, to which I replied that I could only do 30 minutes, and when we logged into the call, he was ready with his Account Executive to plow through a 60-minute product demo in 30 minutes – they even said as much – “Yeah… Usually we like to take an hour to demo our product but we’ll do our best in 30 minutes today.”

snoopy-is-joe-cool-peanuts-254005_1024_768Dude. Chill the f&ck out. You don’t even know me, my company, my problem, or why I’m interested in talking with you. And most of all, your email to me asked for a “few minutes,” and instead you’re expecting me to take an hour to watch you impress yourself with how great you demo your product?

Sheesh…. They’re lucky I did their job for them.

I took over the call – “Here’s why I’m interested in talking with you…” then I gave them the background of where we are as a company and why I replied. Even then, he kept trying to plow through the demo, like he had some kind of checklist he was required to complete in every call. I had to stop him several times just to ask questions. It’s a good thing the product looks interesting to me or he’d be dead and never know it.

So what should you do instead?

Be cool. See how long you can take a sales call without talking about your product. Even better, see how many conversations you can have with a prospective customer without showing your product.

Why do this?

As an entrepreneur, you product is your baby. You’ve identified a gap in the market, and you’ve put in the time, sweat, and toil to craft your solution.

But here’s the thing – No one cares about your product, they care only about their problem.

Until you’ve shown that you truly comprehend the prospect’s problem, you can’t earn the trust and attention of the customer to show your product. Show your product before you’ve earned that trust, and your customer will be polite, nod her head, and wonder when you will get to “the good stuff” or the part of you product that solves their specific problem.

Every customer and every situation is different. Even if on the surface the customer’s problem appears to be the one that your product solves, there is an entire base of information around that problem – how the problem developed, the people involved, past attempts to solve the problem, how decisions are made within the company, and how the problem affects this particular customer within the organization, just to name a few.

And until you have a clear view of the problem from n angles, you can’t position your product effectively or know which parts of your product are most useful for the customer.

Your solution probably has 10, 20, 50 features and functionalities, yet the customer probably only cares about 1-2 of them – the ones that most directly address their problem.

You need to qualify your prospective customer based on several criteria, because if the prospect isn’t qualified, then there’s no point in whipping out a 60 minute demo. It’s a waste of your time and theirs.

With my work at Blend, we usually require we have at least two meetings with prospective customers before we show even a short demo.

In the first meeting, our goal is to verify a critical aspects of the situation and meeting:

1. Are we talking to the right person/people? Is this person/people the one responsible for solving a particular problem we can support? Are they decision-makers, influencers, users, or simply observers to the problem? If they aren’t decision-makers or responsible for the problem, can they get us access to the right buyers at their company?

2. Validate, for both the prospect and for us, that the problem exists – that the customer knows that the problem exists and that the customer views the problem as an explicit need. The problem must be big enough to spend time and money resources to scope out solutions, and big enough to go through the changeover pain to solve the problem.

Status quo is frequently the biggest competitor, even in cases where the need is explicit. A customer has been “living with” a problem often for years (or decades!). Their patchwork solution using general technology tools like Excel or understand or other internally developed applications might be good enough for the next quarter or through the year until the next budget cycle.

3. Require that the customer to prove interest in our solution – getting them to ask questions about our solution and how it works. Asking questions about integration and implementation with current systems. Asking questions about people and resources that would be required on their end to implement our solution. Once we see that customer are thinking past just – “show me a demo so I can get out of this meeting” – then we know we have a genuine prospect sitting in front of us.

4. Learn about the history of the problem. Is this a new problem, or one that’s been around a while? What’s been tried in the past? Have past solutions include outside partners or were they home-grown solutions? Why has this problem become more urgent recently to the point that the company is ready to take action by way of people, time, and financial resources?

Summary: Figure out your qualifying criteria for your product – a good list to start with it:

  • Identify an explicit customer need, ideally enumerating it – “this is costing us $500k per month…” or “with the right technology, we think we can increase revenue by 25% per quarter…”
  • Identify the buyer type with whom you are talking
  • Articulate how this specific buyer would benefit from your solution
  • Learn the history of the problem

If you can answer these four questions, then you’ll know whether or not to bother with showing your product.

Don’t take a dump in a box and mark it guaranteed

tommyboy

I was talking with the sales rep from a telephony company yesterday. She said:

“We have 100% guaranteed up time. For every 10 minutes we’re down, we refund you 1% of you monthly bill.”

Then her line went dead…

I had someone this week ask me, that as a startup, would it help find prospects get off the fence by offering a guarantee?

No. It won’t. You’re a startup. If your product doesn’t work, you’re going out of business and the guarantee won’t matter anyway.

Moreover, there are the switching costs your customers incurs. It might take days or weeks or months or more to completely implement your software or product depending on the complexity. The president of a very large mortgage lender told me that it took five (5!!!) years to fully implement a loan origination software system. Five years. Five F&*CKING YEARS! He can’t go to his Board and say – “Yeah, but don’t worry if it doesn’t work out, we get our money back…”

The telephony company with their 100% up-time guarantee and 1% refund policy… They charge ~$100/month for their service. If a call goes dead when I’m in the early stages of a $100k sales opportunity, I don’t care about the $1.00 refund for their six minutes of downtime. I care about the $100k deal and $10k commission I lost before the deal ever got started.

Retail companies like to say things like – “If you find the same item at a lower price within 30 days, we’ll refund you the difference.” Yeah, sounds good. But am I going to drive 15 miles back to Best Buy in the hopes that they’ll give me the $20 price difference between the camcorder I bought there and Fry’s new advertisement? Unlikely. (Not to mention all of the stipulations.) Don’t pretend you care about your customers with a guarantee. It’s a lie. You know and they know it, and they know that you know that they know it…

Instead of guarantees, make implementation planning part of your sales process. Give your prospective customer a reason to trust you. Show them early in the sales process what you’d do the first minute the contract is signed. Then the first hour. What would be accomplished by the end of the day and in the first week – setting up logins, working with the customers IT team, delivering onsite training, measuring the impact of your software against the very same metrics you’ve been selling on.

If you tell your customer they’ll be 28% more efficient with your product, show how you track this metric starting on week one, and what you’ll do by the end of week two if they’re not starting to see those gains.

If you tell your customer they’ll reduce costs by 75% over 12 months, show them how they are on track to reach those cost savings at the end of first month, and what you’ll do to remediate if they’re not on track.

Tell that that you will sit side-by-side with their users every day for the first week to make sure everything is working perfectly.

Skip the guarantee and show you’re customer how much you will love them.

 

Sales Tip of the Day: Never travel for just one meeting

As we walked up to the building, I turned to the account manager and said – “Wow. There are a lot of people coming out of the building right now. Must be a break from a conference or meeting or something.”

We worked through the crowd streaming out to the front door.

“Where are you going?” the security guard asked.

“In the building,” we replied.

“No you’re not. Fire drill.”

hud building

It was early January in Washington DC, no more than 25 degrees outside. I had flown cross-country the day before from Sacramento for a meeting with the Chief Risk Officer of Ginnie Mae – the only reason I had flown across the country. One meeting for one hour that the account manager had been working on for a couple of months. Now, we were standing outside of the HUD/FHA building at 10:15 with the entire building, thousands of people, pouring onto the sidewalks.

Hmmmm… Not exactly the best idea to fly cross-country for a single meeting with no back up plans. Lesson learned. Never fly across the country. You’d think that one lesson was enough…

Last month, after spending two weeks preparing for a meeting and flying to Dallas, I got this email: “Sorry to cancel at the last minute.  Can we reschedule for the first week of March?”

Fool me once, shame on you. Fool me twice, shame on me. Lesson learned. Again. Never travel for just one meeting.

Caveat: Unless you’re really, really sure that the meeting is going to happen no matter what. And even then, heed caution and have back-up plans..

A couple of strategies for this:

  • Keep an Evernote file with a list of contacts in each major metro where I travel – New York, Washington DC, Dallas, Los Angeles, Chicago.
  • Use LinkedIn to search your contacts by metro area and save the lists. This is an easy way to power through a list of contacts and send them notes about your travel.
  • Visit past customers, even if they are from former jobs and companies where you’ve worked, especially if they were happy customers. You never know who they know, and you never know when you’ll need their help for a reference.
  • Visit previous colleagues you haven’t seen in a while.
  • Meet journalists and bloggers from your industry. They’re always looking for good contacts, ideas, and scoop.
  • Meet with your competitors or your competitor’s talent. Always be recruiting, even if your not. The right person could really move your business. And you never know who they know is looking for a new job.
  • It’s okay to be non-committal to a specific time. Your primary focus is your customer or prospect. I usually say something like – “My main focus is a customer meeting on Tuesday morning. Not sure how long it’ll run, but if it ends early how about we meet up for lunch or afternoon coffee?”