The Single Sale Company
We all know at least one, normally an enterprise software company, but sometimes hardware or engineering: the company with a single "Hero" sale. High value, possibly delivered over several years and adored by the customer. However, the second sale never comes and the company gradually fades and fails.
How can a product which so fully satisfied one customers needs fail to attract more customers with similar needs?
Most of us have done it at one time or another. We decide that a specific car matches our requirements and budget. We visit the manufacturers website and click on "Build your own". Lets have the bigger alloy wheels, the sun roof, the sixteen speaker stereo, the navigation system, the metallic paint, the steerable headlights and all of a sudden we have a monster. Instead of the reasonable price we expected, the car costs twice our budget, we become disillusioned and look to buy something else instead.
What we forgot was that what we really wanted was probably the feature set offered by the base model. All the rest is "nice to have" which we can decide on when we commit to buying the car and if we can afford it.
The same holds true in business. There is core functionality we must have, and other "nice to haves" we might add as we go along.
The supplier forgets that what they originally sold to their first customer was the base model, and thinks that every future customer will really want the bigger alloy wheels, the sun roof, the sixteen speaker stereo, the navigation system, the metallic paint, and the steerable headlights. This means future customers are being offered features they don't yet realise they want, and at a price that is far more than they had budgeted, and the sale is lost.
Companies need to remain clear what is the minimum feature set they can deliver and the minimum price, and that becomes their basic sales offering. Once a customer has decided that that is something that they want to buy, then the discussion as to add ons can begin.
Missing the Point
Sometimes we are not clear why the first customer chose to buy from us. We think the sale was made of the basis of features and benefits which our product provided the customer. Unless we ask, we could be completely wrong.
The customer may have brought from us due to their perception of our flexibility and willingness to allow specification creep during the development cycle. If that is the case, trying to sell a fully featured, heavily designed work program with no flexibility is likely to fail.
The problem is, by the time you deliver the product, the customer themselves may have forgotten why they made their original purchase decision, and by then it is too late to understand. Ask early and ask often. No one is ever offended when you ask why they chose to buy from you, and it helps in the delivery. If you understand what the client valued up front, you can emphasise those values during the delivery.
Quoting too early.
You forget the pain of the first sale. How many months and meetings it took to get to "yes". If you sold it once, surely it must be quicker and easier the second time. It isn't, the same sales cycle needs to be followed, the same information gathered. The second customer is not the same as the first and such differences must be identified and allowed for.
You must gather the same information you gathered during the first sales process in order to create an accurate and meaningful proposal. If a prospect wishes to avoid this and wants an immediate price, refuse. Providing an improperly specified price and work programme will result in failure. The prospect will either understand or go on to call someone else. If they do, and fail then they will hopefully recognise your professionalism and may probably return to ask for help.
When the first customer engaged, the technology you used was probably state of the art, or was it?
Was the reason you won the first engagement that you were still using technology which others could no longer offer, but which matched the clients legacy systems? Alternatively, although state of the art at the start, by delivery time, technology had moved on and your solution was no longer relevant.
Two recent examples were hardware companies developing complex electronic products over a period of several years. By the time the products were ready for launch, key chips had become obsolete. Purchasing large quantities (with the associated cash flow impact) on a last time buy basis allowed both companies to launch their products, but with very limited ability to supply customers.
The first company had anticipated the problem, and was able to slot the second generation chip straight into their product with very minor re-engineering. The second company had not, and was pushed into an 18 month redesign cycle when it was found that the new chip would not work with some of the legacy design.
Understanding why you sold and what you sold is crucial if you want to sell a second time.
About the Author
David worked in Cambridge UK during the 1980’s and 90’s, and experienced first hand the explosive growth of the Cambridge Economy. Since the late 90’s, he has been working in the north of England to encourage innovation and economic growth. Having worked with early stage companies for over twenty years, he has seen many companies fail to capitalise on their sales potential. Working with companies to understand why they struggle to sell what appear to be innovative and exciting products has given David considerable experience as to the many unconsidered barriers.