I happened to be scrolling through a list of our past customer deployments the other day. I stopped on one we had recently “completed”, and was remembering the initial phone call we had. Things ended up a lot different.
Tell me your Pain
I would assume for most of us, the initial customer call is similar. After we exchange the differences in weather at our respective locations, we get right down to business. I typically will start with “Tell me about your business“. I find talking to customers about their unique business models to be fascinating. I am also trying to reconcile the points they are making, to other similar situations we have seen in the past. At some point I will shift the conversation to “What are your challenges that you hope Dynamics 365 can solve?”
As they are going through their issues, and if you have loosened them up enough, this list will be long, I am first trying to think about which product will solve the most of them, out-of-the-box. Can they get by with the Enterprise Sales SMB promo, or do they need to go straight to Enterprise Customer Service? Is this more of an ERP issue or CRM?, etc. This is a blessing and a curse for the Microsoft partner. I imagine this is simper for a NetSuite partner with only one product to offer… but then again, they only have one tool to try and solve every challenge with.
Eventually, a customer will realize, mainly because I make it clear, that different paths have significantly different costs. In the conversation about their 10 user Financials needs, they may identify some critical requirement that flips it into an Operations conversation. The platform cost just jumped exponentially. I never ceases to amaze me how many absolutely “Must Haves“, become “Nice to Haves” at that point.
The New Garage Door
Many of our customers come in the CRM side door, but the Dynamics 365 blanket branding is now a garage door that they all start at. I would say that today, of the customers coming in that garage door they seem to be about 50/50 ERP vs. CRM customers. I get the all-in-one approach, but in my memory, this was seldom the case. The people we have historically dealt with before, had little to do with the operations side of the house. I assume the opposite is true for historical ERP partners. But here we are, assuming all customers would like peanut butter in their chocolate.
Can they start Small?
We do not have any commissioned sales people. so we do not have any motivation to get the customer to “Go Big” right out of the gate. In fact, I would even say we are more motivated to get them to “Go Small” . The ultimate success rate of the “Go Smalls” over the “Go Bigs” is staggering, and inarguable for anyone who is not paid on commission. Regardless of the customer’s ultimate goals, I will always try and steer them down the proven “Go Small” path.
Sales Pitch disguised as Information
For about 90% of our Customers, our RapidStart solution is the way they start with us. To be clear, right now about 90% of our business comes from our RapidStart partner/resellers, but we do maintain a small direct sales effort so we can make sure RapidStart is doing what it is supposed to, from the ground level. While most customers come into the initial conversation wide-eyed at the possibilities, they are also apprehensive about the costs… all costs. While even a customer can agree that ROI is more important than costs, a ROI is not guaranteed, so costs will be the primary initial factor. RapidStart allows us to completely eliminate this key factor, the one that keeps 80% of the deals from moving past that initial phone call. As a result, our close rate is about 85%.
The typical path
It is actually rare now that I would even proceed with a customer who does not see the wisdom of starting small with RapidStart. Why would I want to put our firm’s reputation at risk on an path that has a dubious success rate, when I have another path with an almost guaranteed success rate? “Steve, you say, guaranteed success is a pretty bold statement!”
Walking back Bold Statements
Okay, I don’t want to sound like a “Benioff”, so let me clarify that bold statement. First of all, the higher success rate is really tied to the “Go Small” approach, RapidStart is just one way to accomplish that, and RapidStart happens to be the way we accomplish it. The proof point is in the Churn Rates. “Churn” is where a customer buys Dynamics 365 licenses, and then cancels a short time thereafter. Why did they cancel? Tons of reasons, but usually it is the realization that the effort failed. It failed because they either could not get it launched, or could not get it adopted once they did, or realized that the cost to get it launched was going to be too high.
Celebrating the sale of licenses
Before you go running around the office high-fiving everyone on your 20 seat Dynamics 365 license sale, you should know something… you haven’t accomplished shit. Save your celebrating for the one-year anniversary, if the customer is still active. When we were still able to track it, projects that started with RapidStart had zero churn. There are too many now, so we lost touch of this metric, but I would expect it is still hovering around zero. So I’ll hang my bold statement on that.
How do I buy a Yacht by going Small?
Buy a small Yacht. You can trade up, as your customers grow up. When you think back about every customer that you were able to convince to part with a large sum of cash to get going, on a project that ultimately failed, how does it make you feel? It’s not a trick question, the sales world is full of sociopaths, and most of them have big yachts. But for the rest of us, it is not something we are proud of. I like nothing better than reaching out to an old customer and hearing that things are great!
I have been told that my posts are too long, among other critiques of my blogging. But since about 10K of you are reading each one, I am inclined to ignore the advice. But I will start trying to shorten them up. I had planned to continue on what happens after “Go Small”, but I will save that for a future post. You’re welcome.