Everyone Is Not Your Target Customer
For anyone involved in sales there’s a temptation to assume that if your target customer doesn’t “get” what your product or service is about, they’re stupid. The only way is your way. Or the highway.
“If only they could see the errors in their thinking,” you say to yourself, “they’d understand how great our product/service is! Why don’t they see the proposition in the way I do? Why aren’t they jumping up and down in sheer ecstasy, demanding that I take their money?”
The fact is that there are any number of reasons why your customer doesn’t think your product is all that.
Some Customers Just Won’t Buy From You
There is, of course, the possibility that your target customer actually hasn’t been made aware of all the great things your product can do for them. How the features save them time/money/whatever. How it’s been designed to address the particular problem that they’re looking to solve.
But that isn’t the only reason why customers don’t buy from you. Far from it.
Maybe the product doesn’t work the way that they wanted or expected it to work. Maybe they don’t have the budget, but would rather give another excuse. Maybe they want in in red, but you only offer it in blue.
Or maybe, just maybe, they simply don’t like it.
Customers Don’t All Think The Way You Do
I’ve just been conversing on Google+ with some guys who’ve developed a small but nifty bit of software. Note: I’m keeping things anonymous for reasons that will become clear very soon.
The product looks great, apparently does what it says it will do, and is inexpensive to buy – at least at first. It’s being sold in a currently very fashionable way. Rather than buy the software outright, you’re supposed to pay for the product every year. It’s the same sales model used by products like Microsoft Office365, Adobe Creative Cloud, and others.
The difference is that the software I’m talking about does something very small. It’s something that most people consider as a detail in their overall business, in a category that’s waning in popularity, and certainly something that you can live without. It competes with products that offer the same functionality without you incurring any ongoing annual costs. You can even get similar products for free.
I’ve had a look at the product and, actually I rather like it. I like the way it works, how it looks and so on. So when I saw a thread about it on Google+ I figured I’d compliment the developers on what they’d created. However I also said that personally I couldn’t justify paying for the product again every year. The ‘value’ that I placed upon the product and its importance in solving my problem didn’t outweigh what I perceive as the negative attribute of an annual payment.
Your Target Customer Has A Right To Disagree
I think you know what’s coming next, right? Well, suffice to say they didn’t see things in the same way as I did. In fact, pretty much all hell broke loose.
At the start they were trying to sell me on their choice of revenue model. How it ensures they can deliver support and that I shouldn’t assume such products should be available for free. When I came back to them saying that I didn’t have a problem paying – just with paying every year – what began as a pleasant exchange started to quickly deteriorate.
I was accused of not understanding how much time and effort went into creating the product. How supporting and improving it costs money. How that, since the price of the product is low, I was being a cheapskate. I was told, in a not particularly subtle way, that I was stupid for not seeing the value in what they’ve built. That famous individuals were using it, that $x per month wasn’t a lot of money, and so on.
I tried to reason with them. Really, I tried. But they couldn’t – or wouldn’t – entertain a contrary point-of-view. In the market space where these guys are competing the concept of paying for this kind of product every year isn’t just uncommon – it’s alien. As I say, what the product does (no matter how well it does it) is really small and is not unique.
Whether they’ve spent a day, a month, or a year developing the product is irrelevant. If the value that it brings to me is seen as greater than the monetary exchange, then I’m all in. The issue for me is that I don’t see the bang justifying the buck. Since I didn’t agree with their position, even though I acknowledged it, these guys took to attacking me. Oh well.
Remember That ‘Price’ Is Not The Same As ‘Value’
Of course there are costs involved in developing and (especially) supporting any product. For software, the general practice is to charge for support at a percentage of the product’s retail cost per year. That figure might be 15%. It could be 25%. It could be more. But it’s certainly not 100%. I would have been quite happy to pay triple (or more) of what these guys are charging, had support been included.
It’s also true that other companies adopt this business model, especially in the B2B space. But users see products like Salesforce, Marketo or WorkDay as intrinsic components of their business, without which they couldn’t function as well as they do today. The product we’re talking about here isn’t in the same ballpark.
At the end of the day the real issue here is one of price/value positioning. These guys could’ve formulated their pricing model in a way that, while being different to the industry norm, wasn’t so different as to alienate a proportion of their target customer base. Who knows – maybe these guys have got it right and I’m way off the mark. A part of me hopes that’s the case.
Your Baby Is Ugly
I understand that monetizing a business is hard: it’s one of the reasons why I started KEXINO – to provide help to startups and small companies with business marketing services, communications, positioning, lead generation, and so on. In the past eight years we’ve helped over 100 businesses become better at how they market themselves, and we’re all really proud of that achievement.
I also empathize with the challenges of revenue generation for a software business: For seven years I was Worldwide Director of Marketing for a software company. More recently, while our content localization service is enjoying phenomenal success today, it certainly wasn’t plain sailing at the beginning.
I take on board that it’s sometimes difficult to hear criticism even if, as in this case, my words were meant to be constructive. Having someone tell you that they don’t like what you’ve created can be like hearing they think your baby is ugly. But in business, as in Life, you don’t get to please all of the people all of the time. Nor should you – in fact in business that’s the last thing you should be trying to do.
Canon vs. Nikon. Apple vs. Android. Porsche vs Ferrari. There is no right or wrong. Accepting that your business value offering doesn’t check the boxes for everyone isn’t a reflection on your product, service, company – or you personally. If someone doesn’t see things the way you do, it doesn’t necessarily make them ‘wrong’.
Not everyone who’s your target customer will buy from you. And you know what? That’s absolutely fine.