The Problem with Software Sales
November 6, 2009
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Software can often be a challenging product to sell. If you don’t have a great sales team, it can be difficult for anyone to know just how good your software is.
Many great companies with fantastic software have fallen flat due to a lack of sales revenue that resulted in them being eclipsed by a poorer quality competitor. This phenomenon has prompted many software companies to fore go quality in return for beating their competitors to market. The idea being that even if your product is of poor quality, your customer base may be locked in long enough to give you time to actually meet their needs. Twitter is a perfect example of this.
While I think there is some validity to this thinking, too much of it can lead to a very bad pattern that I’ve seen in nearly every software company that I’ve worked in. It goes something like this:
- Pre-sales team for a software company gets a potential big customer excited about their product via demos.
- Big customer comes up with a list of requirements that they must have to buy the software.
- Sales team start talking numbers with the client and agrees to meet all of their requirements without consulting Product Managers or Development teams.
- Big customer’s sales contract is signed and the Sales Executives collect their commissions.
- Product teams realize too late that the product doesn’t do 50% of the requirements stated in the sales contract. Panic ensues and people work day and night to deliver something that can meet the terms of the contract.
- Big customer is not happy as their deadlines are not being met or they have not received what the sales team promised.
- Product teams continue scrambling to keep the big customer happy so that they don’t lose the contract.
- Upper management gets involved to do damage control and prevent the loss of the big customer.
- During all of this chaos, the sales team has moved on and signed another unsustainable deal that is just on the horizon.
- The cycle repeats.
The main problem here is that there is zero accountability for the Sales team’s actions. Usually, Sales is a separate and independent department that is measured on their pipeline, not on long term relationships with customers. Upper management is often reluctant to restructure organizations, as it might result in lost sales. Also, because of the way sales commissions are distributed, a net operating loss from a customer never affects Sales teams’ compensation.
As a developer on the other side of the fence, it is easy to point the blame at the Sales teams for their irresponsible behavior. However, it should be upper management’s responsibility to build in accountability for customer relationships with sales teams so that this type of situation does not repeat itself. While Sales are a very important part of any business, left unchecked they can wreak havoc on the long term viability and reputation of your organization.