It is a familiar occurrence to see innovative software companies struggling to achieve commercial success in the retail industry. The reality is that far more software companies fail rather than succeed. This happens even though many of these very same companies offer software applications that save retailers a lot of money and help them to better serve their shoppers.
It can be easy for software solution providers to blame their lack of sales success on the retailers themselves. You’ll hear comments like retailers are “too conservative” or they are “technology laggards.” While some retailers can indeed be slow to embrace new technologies, the overwhelming evidence shows that there are plenty of retail buyers out there looking for new, innovative solutions. Retailers want to be convinced that they can solve problems and deliver benefits before making commitments.
A very common problem with many software solution providers, particularly early-stage companies in the retail technology segment, is that they don’t place enough importance on having professional sales and marketing resources. Sometimes these companies are so focused on new product innovations or taking good care of customers, sales can be neglected. Worse, some companies in this space treat sales as something that anyone can do, even though sales is indeed a profession. Has a software engineer, implementation specialist, or even the company’s CEO been professionally trained to convince skeptical retailers to buy a given product? Usually, the answer is no.
It is exceptionally difficult for any software company to be successful without a strong sales approach. Sometimes, having the best product is not sufficient to win in the market-place. How many times have we seen great software solutions die because of the failure to generate sales wins in the marketplace? It is vital that companies develop a strong sales approach for securing new customers while simultaneously managing existing customer accounts to ensure their success.
There are some common symptoms that can be witnessed around companies who are struggling with sales. These include:
Lack of market awareness around the solution and/or solution provider. If the prospective customer isn’t aware of your solution or your company, they can’t possibly buy from you. All great software solutions need to generate demand.
Focused on the wrong companies or decision makers. If you are targeting the wrong retail segments or the wrong sized retailers, you could hamper your company’s commercial success. For example, sometimes solution providers focus too early on national or international retail chains instead of working with independent retailers or regional chains who may be better candidates to consider a less mature solution. Regardless of size or segment, it is vital to engage with people who own the problem that your solution addresses.
Ineffective solution messaging. If the messaging that you are sharing with retailers is too focused on technology or features of the software versus focusing on the benefits of your solution, the message will often lose the retailer’s interest. How does the solution help address a pain point for the retailer or generate value? Is the messaging succinct and impactful?
Having the wrong people leading sales. Selling is a profession just like any other professional discipline. The most successful sales people are professionally trained and they hone their craft as they get more experienced over time. Great sales professionals depend upon proven sales methodologies and techniques to deliver consistent results.
Company leadership doesn’t respect sales or lacks interest to focus on it. Contrary to the previous bullet point, selling is indeed everyone’s job. Selling is a team sport like football versus an individual sport. While it makes sense to have a trained sales professional acting as the Quarterback on any given opportunity, that person must be surrounded by engineering, implementation and other experts. Top executives from software solution companies should dedicate anywhere between 25% and 50% of their time focused on strategizing sales opportunities and conducting sales cadence processes.
Too many offerings, inadequate sales focus on each offering. Some software solution providers are prolific about creating new solutions or capabilities. Innovation is great, but some companies continue to innovate even though they are not commercializing any of these innovations adequately. With the proliferation of offerings, the sales force or sales channel might experience dilution of focus.
Lack of integration with incumbent retail solutions. Retailers today depend upon many solution providers. The technologies in their ecosystems can be very modern or alternatively very legacy. Most retailers mix cloud-centric solutions with on-premise technologies. Some are depending on large technology solution providers while also engaging with innovative early stage companies. All retailers have too many solutions in their environments with too little time to fully leverage what they have already invested in. This complex environment is causing many retailers to shop for simplicity and quick time to value solutions. Some solution providers spend too little time helping the retailer understand how their solution will deploy quickly, integrate with other vendor’s products and deliver the promised benefits.
Overly complicated commercial models. Many retail software solution providers have struggled in achieving revenue scalability because they over-engineer their revenue models. These business models always sound ingenious on the surface, but they can run into challenges.
Not understanding the nuances of the full sell-cycle. Selling software solutions to retailers takes more time and patience than it used to. Retailers have gotten much more sophisticated in how they evaluate new solution offerings. All of them have been burned at one time or another on at least one or more technology solutions. As a result, they are more deliberate about forming software evaluation teams, defining their needs, setting selection criteria and evaluating multiple solution providers. Successful solution providers are diagnostic and consultative. These companies focus on supporting the evaluation process as opposed to circumventing it.
Depending on ineffective channel partnerships. Some retail solution providers are prolific around forming sales partnerships with other companies who are active in the market. Often these channel partnerships fail to yield dependable results because these partnerships are not driven, managed and measured against a set of mutual targets. Any channel partnership worth having should be profitable for both parties, it should be core or near core and it should be actively managed and measured.
If you are a software solution provider and the above challenges sound familiar, how do you address these challenges? You essentially have three options:
Option 1 – You can commit to building or strengthening your own in-house capabilities. This means getting the best sales athletes and embracing proven sales methodologies and techniques. Investing the time and doing it right.
Option 2 – You can try to find an external sales channel or business partner who is as committed to your company’s success as you are. Great partnerships need to be measured and monitored proactively.
Option 3 – You might be a great candidate for a Sales-as-a-Service approach. This approach is like having your own in-house team, but it is professionally managed by an external sales organization with proven sales athletes that embrace industry best practices, methodologies and techniques. It is a tightly-coupled, dedicated service focused on driving results for specific solutions. This approach can serve as a bridge to ultimately bringing sales back in house, perhaps hiring the sales-as-a-service resources in house when the company is ready to take this on.
At Transformational Retail, we have developed a Sales-as-a-Service business focused on helping retail software solution providers grow and thrive. The offering is intended for strong software companies who prioritize their attention on building a great product (or products) and taking good care of clients, but lack the DNA to initially develop a strong in-house sales team or channel business.
Sales-as-a-Service is a natural extension of what companies are doing. They are becoming more virtual. For instance, many software companies augment their internal development teams with off-shore development or outsourced human resources and payroll. Leading companies embrace the mantra “do what you do best, then outsource the rest.” If your company is far better at building great products than it is at selling them, then perhaps you are a candidate for this go-to-market model. It might deliver better, more predictable results without changing the priorities of the company.
About the author:
Todd P. Michaud is the President & CEO of Transformational Retail Technologies, a company that focuses on helping growth-oriented technology companies in retail. Prior to this role, Michaud was Global VP & GM of NCR Corporation’s Global Enterprise, Merchandising & Supply Chain (GEMS) business unit. He joined NCR as a result of its 2013 acquisition of Retalix Limited, an industry leading retail software company where he was the President of Retalix USA. Before Retalix, Michaud was President & CEO of Revionics, a SaaS-based, provider of predictive big data analytics for retailers. Michaud was also the President & CMO of IDS, LLC, a successful enterprise and supply chain software company focused on the Food Industry which was acquired by Retalix in 2005. Michaud started his career with 16 formative years at the IBM Corporation.