Marketing Channel Management

I was talking to a salesman the other day about a sale he’s working on. We discussed his potential client’s requirements, and I asked him what pricing he was putting forward. The figure he came up with was considerably less than I would have expected, and considerably less than I figured it would take to implement a good system. When I asked how the figure had been worked out, the salesman explained that there were a number of companies bidding, and his proposal was geared to what he felt the customer was going to be comfortable paying.

The salesman in question is a good guy, and I’d consider him to be pretty ethical in his approach. In essence he’s just playing the game. His job is to sell software. If he were to say to the client ‘look what I’m proposing is double what my competitors are offering, but I think it’s what you need to get a great system’ the chances are they’d figure he was trying it on and would buy elsewhere.

And this to my mind is the heart of the issue with CRM; vendors will sell what they think customers are prepared to pay, not what’s necessary to get the job done. For example, I suspect most people in the industry understand that user adoption is a big issue, but know that if they put in the package of services to address it, it’s going to be challenging to get it signed off by the customer in a competitive environment.

I think this problem has got worse rather than better in recent years with the advent of the software as a service (SAAS) market. Apart from the need to install software, a minor part of the implementation process, SAAS offerings are no less free of the need to offer services than their on premise counterparts. Services however just don’t seem to fit well with the SAAS business model, and I’ve had senior SAAS executives tell me that their focus is subscriptions, and services are seen as a necessary evil required to win new business rather than a source of revenue in its own right.

This isn’t going to be an easy problem to solve. Vendors have a driving need to sell software, and it isn’t in their interest to identify things that might make that process any more difficult. People like us may give the independent perspective – and you can be sure we’ll continue to work hard to do so - but the airwaves are dominated by the vendors. Some day perhaps one of the vendors will take a stand, but until that time, buyer beware.