Opportunities to Engage Directly with Decision-Makers Must be a Priority for Enterprise IT ISVs with Recurring Revenue Product Models

As we wrote in a prior post to this blog, enterprise IT ISVs with “razorblade” products built to produce a healthy recurring revenue from the periodic replenishment of the “non durable” component of the product (which is usually length of access via a cloud or software as a service, SaaS, subscription) must engage directly with decision makers. The reason for this imperative is that successfully capturing service renewals becomes a much easier task when decision makers are correctly engaged from the start of a sales plan. Lots of sales trainers have admonished their students to meet this imperative; therefore, we are not making our claim in a vacuum. The facts are that the perspective of operational personnel as regards costs, benefits, savings, etc. are very different from the perspective of decision makers who likely own budgets, and, therefore, manage capital outlays with utmost care.

We know of three different methods of producing this type of engagement very early in a sales plan. The first method is to implement what is often referred to as a “diagnostic” or “deeper dive” activity with a prospect. The purpose of this activity is to collect all relevant information about a prospect’s needs, ostensibly to determine not only the factors that a prospect is looking to change, but the severity of these factors, which most sales trainers agree will permit sales teams to estimate the likelihood of a sale. The general rule is that the more severe the factors, the greater the likelihood that a sale will be made.

Of course, the details that emerge from this “deeper dive” activity more often than not will include identification of decision makers as well as the roles of other important contacts in a purchase decision. Where factors are severe, in our experience, there is a greater likelihood that prospects will acquiesce to including decision makers in a discussion. But for products that sit on the periphery of larger applications, it is often very difficult for sales teams to get prospect commitment to engage in a deeper dive, especially in 2012 where prospects have generally accumulated all of the information they require about meeting their needs before they contact sales.

In these cases we highly recommend identifying other contacts within the same organizations. In other words, while an initial sale is in process, lead generation teams are using techniques like teleprospecting to engage with other contacts at the same business. It is much better for this process to be effective not to link the two activities. In other words, we recommend that sales teams continue to execute on their sales plan with immediate prospects independent of the activity of lead generation personnel. Over time, a map of decision making for the enterprise should emerge.

The last method is simply to use renewals as an opportunity to engage with decision makers. In our experience, prospects are much more open to identify decision makers post sale than is usually the case while the sales plan is in process. Of course, it is much more difficult to engage with decision makers after the sale has been made, but in some cases there is simply no alternative.

In the next post to this blog we will look further at how ISVs of peripheral products can leverage partners to get to the same aforementioned decision makers.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved

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