3 Lessons: How I failed my customer and they still thanked me

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increasing ROI of your IT solutionWorking in consultative selling is all about knowing your customers needs (almost better than they do), find a suitable solution that will solve a particular problem and ultimately delight them.  The first time I realized I had failed at that, wasn’t when the customer told me but curiously when I found out HOW they were using the solution. And because of that, their ROI on an IT solution was terrible!

 

I had unmistakably painted the wrong image of how & what the IT solution should be used for, but worse not identified inner conflict within the organization itself.

In my particular case, the IT solution was meant to reduce the need for IT infrastructure through virtualization of their operating systems but apart for that detail, the story and the lesson learned can be applied to virtually any complex sale or solution sale.

At the time I believed that I had done all the critical steps one should follow in consultative selling, including:

  1. Listen first, let the customer describe their issues and who they are;
  2. Present the value of myself, the company I represented, and the portfolio of all our corporate solutions;
  3. Investigate, brainstorm the root of the problems, and what they wanted to achieve;
  4. Solution building, draft proposals, and fine-tuning;
  5. Engage with decision makers and identify key influencers;
  6. Destory – I mean – out-beat, my competitors offering through value proposition & a story-line;
  7. Close the deal with a charming smile!

…… or so I thought.

I had engaged with the IT manager of the firm, but knowing he was a key influencer, I needed to get in front of the decision maker. I therefore made a move to get in front of the CIO, who was newly appointed. Perfect timing!

The CIO, with wishes to make his mark, wanted to change the way things were done – and virtualization was one of the many ideas.  His goal was to change the firm’s decaying IT infrastructure and lack of visibility of Total Cost of Ownership on their hardware.  Great I thought – right up my ally!

To cut the long story short, I was successful in getting selected as their IaaS provider (Infrastructure as a Service).  But to get things moving faster, the IT manager discretely mentioned that we should first get some testing servers up and running, so he could “get internal processes fine-tuned”.

I was clear in informing him that they weren’t as performant (lower SLA, lower speeds, and no backup of the data) and although cheaper than the standard enterprise version, would turn-out more expensive in the long-run since you would need more of them.   All was good, his actual words:

“Lets get this baby off the ground and then we’ll fine tune”.

I was a tad-bit suspicious and not wanting for all this to blow-up in my face (typically what happens when sales over promises and or implementation under-delivers), I made sure the CIO was also aware – in writing needless to say!  My back was covered in my perspective.

6 months later, while going through a review of accounts with finance I realized that not only were they still on the test servers, but that they had fully deployed a part of their production onto it! …and paying full premium price! At this point some would say Why do you care?” or “Good for you, greater profits!” or even “Well, if they’re too dumb to figure it out!”.

I wasn’t of this opinion.  If you want to distinguish yourself from the competition and ensure customer loyalty, you have to make some concessions. Short-term loss maybe, but long-term win, in my humble opinion.

I set a meeting with the IT manager and the CIO, for account management purposes. When discussion about what they thought of the solution and how were things going, apart for a few support issues (when are there not), I got an all outstanding “Things are great! Why do you ask?”.

The solution was working as they expected, and not only that, they found their cost of ownership had gone down.  I had lived up to the expectation I had set and the customer was delighted.  What more could I ask for?

After a detailed discussions, I came to the following findings:

  1. They were comparing the IT performances vs their previous in-house solution, which had daily disruptions.  With us, this was only happening weekly  (FYI for testing servers this is ok, but ones destined for production this definitely should not be happening)
  2. A combination of factors, led them to see a brilliant increases in terms of speed, responsiveness, and flexibility setting the belief the system was upto to its standard (vs the old again).  Yet they were only getting approx. 60% of what they should have been.
  3. In terms of cost, their total bill turned out at over $4000 a month ($48,000 a year).  Under a standard yearly contract, this could have gone down to $2750 ($33,000 a year). In other words more than 30% premium!
  4. For them, a combination of internal financial analysis and misdirect, led them to believe that in reverse, they were in fact saving 20% per year!

But how could the solution be under-performing, be more expensive, and that on-top of that I had been explicit about it – were they still delighted?

After some more digging, I came to the following conclusions:

  1. Despite me informing them that the solution would under-perform and be more expensive in the long-run, they thought I was dishing the normal run-of-the-mill “Sales Speech”.  They perceived that the system was working better than the previous one and they were saving money.  Happy days!
  2. The IT manager had in-fact been overstating the internal costs.  In order to work free of the hassles of haggling with finance and keep a larger IT team, he had obfuscated the maintenance costs of the existing system.   Once costs were allocated to their correct budget line, it was apparent they had experienced no savings whatsoever.
  3. Finally, my sales speech had always discussed increased performances, better flexibility, and savings.  All of which were apparently happening, to a degree, – oh that, and that I was perceived as Sales Guy, so they would take everything I said with a pinch of salt.

My conclusion from all this? 3 valuable lessons….

  1. There always inner conflicts and agendas that simmer below the surface.  In my case, it was beneficial to my sale and my over solution delivery.  It can likewise just as go in the other direction. Uncovering it will ensure you position the solution in the right light.
  2. There’s always a degree of mistrust between buyers and sellers in complex solutions scenarios.  Sure buyers rely on your ‘free expertise’ to help them design the solution, but in the end, deep down, they still are wary of the typical sales-slingers pushing more than a customer needs. Let a customer discover the mistakes of some of their decisions so they can later see the value of your proposition.
  3. The Most Important! For point 2 above to work and not backfire, you must regularly follow-up with customers.  Either spontaneously or via an account management process, to ensure that the customer is getting the most of their solution.  In other words, that they are achieving significant ROI on an IT solution.  If not, this leaves a wide open door for any competitor.  Competitors will use that gap as an opportunity to displace you and point to all the ‘problems’ of your solution.  Wouldn’t you do the same? Providing some ‘free’ post-deployment reviews can lead to a long way in terms of revenue generation and customer loyalty.
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