Preemptively Addressing Threats to your Deal
Competition for an enterprise SaaS software deal takes many forms: alternative vendors, internal IT, competing projects for funds and maintaining the status quo. Each of these competitive threats require specific strategies, so let’s review them individually.
As it relates to alternative vendors, obviously, there needs to be a clear and precise value proposition designed to combat each vendor with regard to the customer’s needs. Focusing on the customer’s business requirements, the financial value associated those needs and how our offering uniquely delivers that value is always the most valuable strategy to defeat alternative vendors. The tactical details of competing with alternative vendors can best be managed by following the MOIC Sales Engine, a 21-step sales methodology designed to pick (and win) the best deals to pursue/win and detach from bad or unwinnable deals.
As it relates to competing with the internal IT development, it is often apparent that utilizing a “free” set of resources can be very tempting for the customer. Depending on the development track record and resource availability for that specific IT department, the competitive threat of IT varies. Just like we need to assess the track record of alternative software solutions, that same assessment needs to preemptively take place relative to the customer’s IT development track record associated with enterprise software projects. This inspection can provide real insight into the viability of IT being able to optimally address the enterprise issue our software was designed to solve in a reasonable timeframe. Ultimately, the customer is forced to face the value of speed to benefit vs a perception of lower costs associated with "build versus buy."
One of the greatest threats to our deal is the customer maintaining the status quo and not moving forward with a solution to a business challenge. Combatting the status quo requires two tactical elements: a strong business case and uncovering a compelling business event that will drive a decision to address a business need. This business case needs to utilize the customer’s data and to have the customer's acknowledgement that we can uniquely address the challenge. The compelling event (an event that is date sensitive with financial consequences for failure to address in that timeframe) is critical; without it, there is likely no deal happening of consequence.
Even after defeating all alternative vendors and dismissing IT from developing a solution, every software deal has to compete with other corporate initiatives, often totally unrelated to our project. Ensuring that the business case for our deal can withstand the scrutiny of comparison with alternative projects is critical; consequently, we need to make ourselves aware of all potentially competing initiatives (whether or not our project was budgeted) and determine what it would take from a business case perspective to be among the projects that receive funding. Afterall, most companies can only afford/absorb a small number of major projects per year -- especially those efforts that are transformative in nature.
To recap, every deal needs to be won four times: vs. alternative software vendors, vs. IT development, vs. status quo and vs. alternative uses of corporate funds. All four competitive options pose real threats to our deal. If you want guidance navigating the multiple competitive categories, please reach out to us at dave@moicpartners.com.
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