Matt Dixon: evaluation

Transcript context

…We're going to talk about this method you developed for how to actually do all the things you're talking about, but first, to make this even more real, what I'm thinking about is an example. Is a good example, maybe a CRM, like a better CRM product, say someone has Salesforce installed and now they're like, maybe there's probably something better out there we should probably evaluate. Then, I'm thinking from the perspective of a startup trying to build a better CRM. There's always this advice, you have to be 10 times better for anyone to pay any attention. I think that feeds into exactly what you're showing is it needs to be so much better that this fear is reduced. Can you just talk about maybe an example, whether it's that one or a different one to make this more concrete? We encountered a ton of examples. It's so interesting you mentioned startups and I think sometimes, I was actually with a big enterprise software company and I think when, and I presented this research to some of their sales leaders and one of the folks in the room said, "I'm really glad we are who we are, that we are the 800-pound gorilla, especially in a market like we're in right now," because as the old adage goes, it wasn't IBM, but the old adage is that nobody ever got fired for buying from IBM, right? This company is like the IBM of their space. They're the 800-pound gorilla. They've got the brand strength, the reputation, they're the safe choice. This team felt kind of comfortable or comforted, I should say by that fact, especially in a tight environment where it's a battle for deals and for mindshare and for wins out there in the market right now, especially in tech. What I said is you've got to remember though, that may be true, and I would argue, and I think you're right, that for a startup, yeah, you've got to be 10 times better to get that mind share. It may be even better than that to get somebody to take a leap of faith with you. There is inherent risk in going with the unproven player, but I cautioned these folks and I said, "Now, remember, what are the things that drive fear of failure and indecision?" It turns out there are three big ones. The first one is have I made the right choice? I know I want to work with this vendor, but did I configure the solution of the proposal the right way, the right contract length, the right implementation, the right used cases, the right integrations, all that professional services or DIY, all those big questions. The second thing that customers worry about in their second fear of failure is that they're going to learn something after the contract is signed that's going to make the decision look like not such a great decision. I'll give you a really specific example about this. I spoke to a tech company not too long ago, maybe a month ago, and they landed their biggest deal of their existence. It was an early stage company, seven-figure deal, game changer for this organization. Then, they beat out some big established competitors. This is a huge win. They went out. They celebrated. It was just totally amazing, their first big enterprise win and their first seven-figure deal and their first victory against some of these incumbents. Unfortunately, about two weeks after they won this deal, the new Gartner Magic Quadrant on their space came out and they were shown to be kind of, eh, right? They weren't the leader, but they were sort of middle of the pack. All of a sudden, the client who signed the agreement, the CTO just got crap rained from everybody saying, "Did you see the Gartner Magic Quadrant? It looks like the company we just plunked down seven figures with was kind of seen as so-so by the Gartner analyst? just got crap rained from everybody saying, "Did you see the Gartner Magic Quadrant? It looks like the company we just plunked down seven figures with was kind of seen as so-so by the Gartner analyst? Have we talked to these guys and those guys and why aren't we going with the leaders," and blah, blah, blah? They ended up backing out of the contract because the CTO said, "I'm spending every day talking to all the other key stakeholders trying to convince them that yes, we did all of our due diligence, but life is too short and we're probably going to end up going with one of the big players. We're sorry. I mean, that's such a painful story, but that's the customer is like they're going to keep doing research because they don't want to be surprised when some new piece of information comes to light. It's the second big fear of failure driver or failure driver. The third one is that the customers are worried they're just not going to see the ROI. They're not going to get the full benefits. You might project for them a 5X improvement in sales productivity. What if it comes in at two or three X and my name's on the agreement and the CFO comes asking why we didn't get the benefits we thought? In today's environment, that's not just egg on your face, you could get fired for that stuff. This is the client who's really looking for that vendor to have their back and to assure them that they're going to see the benefits that are being projected and promised through the sale. What I said to this big enterprise tech company was, "Look, you guys, yes, it's tough to be a startup right now, early stage company, there's a lot of risks there, but who's offering more choices, them or you guys? You guys have a partner ecosystem. You have 20 different cloud products. You bought seven companies in the past three years. You have a cornucopia of options, which adds to the buyer's anxiety that they haven't chosen the right thing. Second, do you think there's more written about you guys or about them? You could fill a football stadium with all the coverage on you guys. I mean, everybody's got an opinion about you because you are the 800-pound gorilla and everybody's worked with you before and they have opinions, good and bad, and people want to leave no stone unturned. Then, lastly, it turns out you guys are a lot more expensive because you're trying to move from selling simple products like these ankle biters out there, these startups into selling big enterprise solutions. You guys are selling not seven-figure deals, eight-figure deals, nine-figure deals to your customers. That increases the customer's anxiety that I really have to see return on this. You, in many respects, are getting whipsawed by these factors in a way that the startups are not because they don't have as many choices. There's not as much coverage about that. The investment is lower, and so there's a little bit less risk for the customer. You guys aren't immune just because you're the big brand."…

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