Selling New Software Against Incumbents

Understanding the Chief Technical Officers (CTO) Needs

Subject: CTO, Selling software, Legacy software, incumbent competitors

by Victor Antonio

In this article I want to address the challenges of selling software into an already established environment and outline a strategy for overcoming concerns in order to achieve sales success. 

When I was selling software, I use to dread going to see established companies.  What do I mean by established companies?  Companies that have been around for many years (a decade plus) and have their system or processes in place...and the department battle lines are clearly delineated.

Many companies of this ilk are so set in their way that any new product introduction is immediately spurned or set aside for ‘future consideration’.  This last phrase is the death knell for many salespeople.

The term Legacy is more often then not used to describe a software or operating system that has been used by the company for many years.  The challenge of any salesperson selling into a legacy environment is to show that the product can be integrated into the system without any degradation in service or performance.  On the other hand, if the objective of the salesperson is to replace the legacy system with a new system altogether, the task becomes a mammoth undertaking. 

For this article I want to focus on issues concerning selling a software package that can run on the existing operating system and is compatible with the database the company currently uses.  Lets begin by defining technical issues and non-technical issues that need to be addressed:

Technical:

1) The system proposed should provide a clear benefit on how it will improve performance and reduce costs.

2) The software should have already been proven in the field; be ready with references.

3) With what databases is the software compatible with; import and export issues should be addressed right up front

4) Address the level of revisions the software has gone through and how long the software has been available.

5) Server space the software will need and any other allocation issues.

6) The interface should be easy to use; intuitive navigation is key.

7) The types of reports and level of customization capabilities is also important.

8) The biggest concern after resolving the technical issues, is the switch-over time; how much impact will it have on the day-to-day operations and for how long.

Non-Technical:

1) Is the software to be used by more than one department?  If so, it is essential to get the groups to agree?

2) Multi-departmental involvement lengthens the sales cycles and requires repeated selling to each group individually and as a whole.

3) Be aware of territorial issues.  A department who has had a tight reign on managing the system may see the introduction of new software as a threat to their control.

4) Training cost for all departments is usually the biggest stumbling block.

5) The cost of manuals and literature change must also be considered.

As you can see, the list of technical and non-technical issues can be quite extensive.  This example epitomizes the definition of a ‘long sales cycle’.  There is no quick way or silver bullet for selling into a company with a legacy system. 

What I’ve attempted to do above is highlight some of the key concerns from the customer’s perspective.  Any attempt to sell software without, at a minimal, taking into account the above factors will most likely fail.

There are two key figures that will have great influence over the outcome: Chief Technical Officer (CTO) and Chief Financial Officer (CFO).  The CTO is typically the person who has a comprehensive understanding of systems.  A word to the wise, behind every CTO is a layman who understands the nuts and bolts of the system.  Try to find this person since they typically have great influence over the CTO’s thinking.  If you can convince this person of the value you're offering, he will become your internal champion who will fight on your behalf when you’re not around.  (See Cold Calling on CEO article)

The CFO is the person who controls the purse strings.  You task as a salesperson is to arm the CTO with enough ‘financial reasons’ why a change over will benefit the company.  With this information in hand, and the system proven to be effective, the CTO will be in an optimum position to convince the CFO to financially endorse your software.