NEWS & BLOGS
triMar Vision blog on LinkedIn of 18-04-2022
You can write an unlimited amount of books and guides on contracts, contracting tactics and do’s and don’ts. However, there are some fundamentals, always being applicable in the IT environment we work and live in that are so basic, fundamental and important, yet often ignored. So what are the initial contract fundamentals that will make your selling cycle easier, better manageable and smoother?
1.) Explain and have your sales team(s) realize and understand that they are not only selling a product. They are also selling the associated contract. They go hand in hand and cannot be viewed or treated separately. The contract contains both the balance between revenue and acceptable business risks and liability, as well as the operational terms.
2.) The latter is fundamentally the biggest argument for convincing a customer to use your own standards as a basis for contracting. General terms of purchase of a customer are just what they say: general, i.e. generic standard terms under which they purchase everything and anything. They can never properly and accurately reflect your operational terms on how your product works and how you provide it to your customers. This is true, even if the customer believes that they have very specific terms in place depending on type of purchase. Take SaaS or Cloud Contracts as an example. Customer may have formulated SaaS related contracts or clauses (even using highly regarded and expensive law firms in doing so) but no cloud offering is the same and has individual specific requirements, both operationally as well as technically. Just think of SalesForce, ServiceNow, WorkDay, CrowdStrike, to name a few. They’re all cloud offerings but completely and utterly different, ranging from CRM to Platform to HR to Security. They are all provisioned in a different manner, having different operational aspects and thus requiring terms specific and unique to them. There is no one-size-fits-all. This is key to understand. When talking contracts, one tends to think it is only a nice little legal battle around warranties, IP and liabilities. Actually, in my opinion those are the least important issues in a contract. Parties will ultimately always end up with an agreement on those. Of course there is a fine balance and risk assessment, but as long as parties are reasonable and willing to contract, they will ultimately find a middle ground. However, on the operational terms it is difficult, technically challenging or in some cases impossible to compromise or make changes since they simply reflect the way the product works and is provisioned.
Every now and then there are hot topics in the industry that influence the contracting requirements, for example (and I’m now giving away that I’m actually an old man in this industry….) the Y2K warranties; the Euro currency guarantees; but more recently the GDPR (related to Schrems II) and the embargoes related to the war in the Ukraine. These are the temporary hot topics where parties are getting nervous due to uncertainty and try to contract all their liability away and have the vendor accept unlimited liabilities. Regardless of the importance of these topics, the customer must realize that you are not an insurance company. Your product is not priced to assume unlimited liability, nor is it always reasonable or fair. For example, if you are barely receiving or processing personal data, why would you have to have unlimited liability all the way up to the enormous fines that might be applicable to individual customers? They are not in line with the value of the contract at all. You may want to introduce a higher or super cap just for that type of liability only, but always as an acceptable multiple of the contract value.
See how easy it is to get side-lined, carried away and start writing more details despite the promise of just some fundamentals here?
3.) Taking all of the above into account, an easy and efficient first step is to create cheat sheets. Think about the top 10 or 12 most important elements in a contract for your business; why they are important to you and what is your first line of defense on them? Keep it short, in elevator pitch type of language so everyone can understand, very quickly consult and review. Preferably use 1 or 2 pages only (and no, don’t do that by using a font size smaller than 7). These important elements are not only purely legal (i.e. why you can’t accept unlimited liability ; what the maximum fall back is that you do accept) but also revenue recognition related (a 100% legally bullet-proof contract that doesn’t allow you to recognize revenue is still a bad contract), finance related or operationally / technically related (SLA’s; provisioning; etc). Hand these out to everyone that is directly or indirectly involved in the contracting cycle but especially your sales team. The sales team then understands the rationale but also can already explain certain fundamentals and set expectations to the customer before legal or finance on either side is even involved. It will speed up and smoothen your sales cycles, and probably even the atmosphere during negotiations since usually the other party appreciates the upfront transparency and understands which topics or areas are very difficult to get a compromise on in the first place and why. It is therefor strongly advisable to get your GC / CLO or Legal Dept involved early to assist defining and implementing this process and such cheat sheets (or obviously consult with domain experts like us that have done this several times). It will benefit your sales cycles, processes and ultimately your revenue objectives.
triMar Vision blog on LinkedIn of 20-01-2022
Are your teams aligned with how your customers buy?
In most software companies when you want to grow revenue some tried and tested methods are employed. They have evolved over time as the software landscape has changed but generally focus on lead generation and increasing sales capacity. There is however an issue, the pool of experienced and hence well-trained sales professionals has decreased over the years as large companies that used to have sales schools stopped training. This has created a talent gap that sales organisations have tried to bridge by automating the sales processes, however, this has met with mixed results.
When Enterprise software sales became established in the 1980’s it was on the back of products from the likes of Oracle and Informix. Full-stack companies such as IBM and HP had been around for a while and had a heritage established in high-value hardware sales. Essentially these products were large ticket items sold to large companies. The focus was on solving departmental problems such as accounting. It was also pre-mobile phones, the internet and email so the world was really a very different place.
The sales motion was very different as was the salesperson. There was a premium on knowledge and the salesperson was the way in which most buyers got their information. Clearly, the power in the relationship was with the salesperson. Board level selling was a prerequisite and salespeople were hired for their ability to call high, solve real business issues, quantify the benefits and close deals.
Now fast forward to 2022 and you see a very different landscape, largely driven by advances in technology, there is also an abundance of software available to solve a multitude of business problems. Information is available to everyone and the balance of power has shifted from seller to buyer.
Sales teams rely ever more on leads being driven to them from marketing, inside sales teams try to find compelling reasons to engage in conversations with potential buyers, and nurturing has become a word in the world of selling! Today everyone involved in the sale needs to be an expert, adding real value to the customer at every stage. In order to deliver against this aspiration, appropriate systems need to be in place and everyone should be constantly learning and growing their knowledge.
Software companies need to carefully assess how their prospects buy and align their resources appropriately. You need to understand this from day one, it impacts your pricing, organisation, hiring, management systems and approach.
I would argue that one on one, relationship-based selling is alive and kicking, people still buy from people. It just looks a little different, the organisation that fails to understand and embrace this will not thrive, it will not be a great place to work and it will ultimately not reach its full potential.
So before you hire more salespeople and crank up the lead generation engine I urge you to pause and ask yourself how your customers buy, what help do they need and what does a great relationship look like from their perspective. Then ask yourself how well are your teams equipped to deliver against this expectation.
triMar Vision blog on LinkedIn of 08-11-2021
Forecasting - why is it so hard?
Leading a sales team is part art, part science. You need to coach, and at times direct, however one aspect of the role remains supremely challenging and yet it is a fundamental skill that you need to master if you are to be successful and that is forecasting accurately.
Underpinning good forecasting are some fundamental processes that all too often are poorly understood and badly implemented.
First on the list would be a system to capture and monitor leads and opportunities as they go through the sales process to closure. There are many great systems out there but most have poor adoption and are ineffective. All too often they are set up to help the company gather data, they don't help the salespeople do their job more effectively. They are a burden, not a help, necessary paperwork to keep the boss happy. This needs turning on its head, salespeople should see benefits in using a system, it should make them more effective, in my experience, they often don't. It doesn't have to be this way, there are examples of best practices and many tips and tricks that achieve better adoption and ultimately better forecast accuracy.
Second would be standardising deal qualification criteria and a common language. Without this, you will never achieve accuracy.
Third would be cadence. Do you forecast monthly, quarterly, weekly? When do you review, who is involved, is there a standard format? Do you forecast directly from the CRM system? Do you conduct effective deal reviews? You would be surprised how many companies fail to grasp the importance of these fundamental activities.
Fourth would be managing the pipeline beyond the current period. Most sales organisations spend a disproportionate amount of time in the middle of the sales process and not enough at the beginning, finding new opportunities or the end, closing deals. They feel comfortable doing yet another demo but not closing a deal or making a cold call.
Fifth and arguably the most important is not a system at all. You need to understand at a human level what is driving your salespeople. What motivates them, how good are their fundamental selling skills, what are their strengths and weaknesses? Are they optimistic or pessimistic? As a sales leader, you need to be out in the trenches with the team, one on one coaching, adding value and getting to know the individuals.
If you have strong processes that are well adopted and supported by effective systems you have the science but don't forget the art - that is your role as a sales leader.
Repost of Martin Blackmore's blog on 27-09-2021
There is a critical inflection point that young software companies reach in their search for growth, get it right and you have the foundation for success. Get it wrong and you will lose time and money.
In the early days, founders need to sell, there is no one else, there is no sales team! However the nature of the selling is primarily to establish product-market fit, constant iteration is the theme of the day and close ties with the development team are critical. As time goes on you hire the first rep, they need to be product experts and skilled in evangelising the sale. Iteration continues and product fit gets tighter and it gets easier to target, attract prospects, and drive repeatable sales.
You need to take care when you make that first sales hire, you will probably look at your competitors and try to hire from them. However, a word of caution, bring in a talented, highly competent, successful salesperson who has come from a world where product-market fit is established and a viable solution is in place, drop him into your chaotic world and you will fail.
Get it right and in time you can turn your attention to scaling and for that, you need an entirely different sales animal.
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