The Pace of Change
An implicit assumption underpinned the solution-selling approach – if the customer solves their current problems, they’ll achieve the business results they need. The third generation of technology vendors knows they can no longer make this assumption.
The pace of change in business has had a profound effect. Few people doubt that business changes more rapidly than ever before. And that the pace of change will continue to increase. The technology industry itself has been a major driver of this rapid change. The problem for customers lies in the time it takes for a second-generation approach. It takes too long to analyse current problems, evaluate alternative approaches, evaluate different vendors, implement the vendor’s products and wait for the positive effect on business results. By the time this process is finished, a whole new set of problems has arisen. The customers remain in catch-up mode.
Customers need to focus directly on the future business results they need to achieve. And they want a vendor who can show them how to get there.
Failed Implementations Cost Vendors More than Ever
Other factors affect the achievement of the customer’s business results. The quality of implementation leads the list. Failed implementations leave the customer with significant expenses, poor results and deep anger. The vendor usually has some culpability. But, so does the customer. Lots of factors affecting the implementation are owned by the customer. The quality of the new processes the customer wants, for example. Or how the technology will be used. For the project itself, the quality of the customer’s project team, the amount of resources committed, the involvement of senior executives, the decision-making process and the quality of change management deeply affect the results. The customer decides on all these things.
But, a big problem has emerged for vendors. Subscription pricing means a failed implementation has a major impact on future revenue. The customer may cancel their subscription. Or, they just don’t grow their usage because of the poor results. Either way, the vendor’s revenue suffers.
The third generation of technology vendors has learned they can no longer leave those other factors up to the customer. There’s too much risk to the vendor’s revenue. The vendor needs to play a proactive role on all factors affecting the customer’s business results.
The third generation of vendors can provide new insight. The second generation provided insight on problems, helping customers see issues they didn’t realise they had. The third generation can provide insight on business results the customer didn’t know were possible. They can describe a new to-be state or ongoing business result. They have insight into results achieved by other companies and into the ability of technology to enable these new business results.
These vendors attract the attention of customers with their insights. And they win deals by selling their ability to enable them.
Characteristics of the Third Generation of Technology Vendors
They Focus on Customers’ Business Results
These vendors are crystal clear about the business results needed by their customers. And in many cases, they provide insight into a new to-be state or business result the customer can aspire to. They’re thriving because they build their business around enabling those business results.
They Leave Less to Chance
Subscription pricing means a failed implementation has a much bigger effect on future revenue. These vendors have become experts at everything required to achieve the needed business results. And they proactively help the customer with all of them.
They Sell Differently
The second generation of vendors sold their ability to solve a set of problems. The third generation sells their ability to enable the customer’s business results. And they differentiate by providing new insight into what results are possible.