Cloud PLM and SaaS sales mindset

Cloud PLM and SaaS sales mindset

cloud-plm-sales

I want to talk about PLM sales today. If you want to succeed in sales, a mindset is a right starting point. But, enterprise sales needs a special mindset. PLM sales is very special case. These days SaaS / cloud software is setting new rules for enterprise software. How does it influence and change PLM sales? What advantages cloud PLM can get compared to a traditional PLM products and sales model?

Few days ago, I posted about how to stop blaming engineers for PLM sales problems? In my view, engineers are on average bad sales people. Therefore, to put engineers in the spot of selling PLM and blame them for wrong articulation of PLM value is a bad idea. There are thousands of books and article on the topic of how to sell to enterprise organizations. It is a good reading for coming Memorial Day long weekend.  Today, I want to talk about cloud PLM sales – a new category that has a chance to change the way we sell PLM.

I can see two aspects of cloud PLM sales. First is related to a new reality of our world – internet, online connectivity, social networks, virality. How does it help to sell PLM? It certainly helps to create a new level of awareness about what your product does. If you didn’t setup your product twitter account, blog and other social channel, do it now! But, it doesn’t change a fundamentals. Despite all social channels, selling to enterprise is still very much old-schoolers game. In my view, there is no PLM vendors that discovered a new way to sell PLM until now. You can read more in my earlier post – PLM, Viral Sales and Enterprise Old Schoolers.

Second aspect is related to the fact how PLM companies are managing enterprise sales process and new business models. My attention caught the A16Z blog post – If SaaS products sell themselves, why do we need sales? The article gives you an excellent perspective on the details of sales process. I like the comparison of enterprise sales to the process of getting a bill passed in Congress. Certainly true. Although PLM is not a new category in the market, I would consider PLM sales challenge to create a unique value for every customer as something real PLM vendors are facing every day. PLM sales are competing with many other activities in manufacturing companies and it is literally hard to take it through the all three steps of decision process – why to buy PLM, why to buy PLM from a specific vendor and why to buy PLM now.

SaaS sales are facing the same level of sales difficulties. At the same time I’ve been thinking how cloud PLM can get some advantages over a traditional PLM product sales. And the point of “customer facing activity” form A16Z blog is clearly resonating here. This is a passage to pay attention in my view:

SaaS is a winner-take-all market involving a “land-and-expand” sales strategy. However, landing doesn’t necessarily mean expanding and winning. Staffing your startup with customer-facing resources — professional services, customer support, etc. — at this stage is an investment that will pay off not only in expanding your footprint inside that account, but in building the most powerful sales tool there is: a good reference. And while new clients are great, the best place to sell something is where you’ve already sold something.

You may ask me how is that related? Here is the thing… Landing should be an easy process in SaaS PLM compared to a traditional PLM sales process. And this is where cloud PLM can provide a clear differentiation. A traditional PLM approach is to sell on a premise of changing the way customer is doing business and manage product development processes. When it is done, you can setup PLM system and prove it. But it is a very lengthy process. Opposite to that, you can think about cloud PLM first sale as a “land” process. Do it for the most painful problem customer has. This is why PLM sales should be more technical. Land it to the customer for a cost of zero dollars. After all, you can leverage elasticity of the cloud as a biggest advantage. After you done, work on expand option. New subscription business models will help you to provide a new way for customer – pay per use.

What is my conclusion? Moving to the cloud, doesn’t mean PLM can sell itself. After earlier attempts, it looks like wrong sales strategy. At the same time, landing small feature to solve the most painful problem for a customer can be a right step to start. The challenge is to have enough customer facing resources that can help to discover it and land an initial solution with very low cost and super fast ROI. In my view, it is a completely different mindset from what we had before in PLM and enterprise. It is a time for PLM vendors to retool sales teams with new skills. Just my thoughts…

Best, Oleg

Image courtesy of Kittisak at FreeDigitalPhotos.net

 

Share

Share This Post

  • I think you’re spot on here Oleg. Companies sometimes need help. It’s part of the way things will probably always be; leaning on the advice of others that have gone where you want to go is a way to accelerate your changes.

    We’ve seen over and over and over again what you say in your conclusion being the biggest thing that we can offer with true Cloud PLM / SaaS. People are starting with one process in a very reasonable way and showing success with that. Once you have a little success it’s easy to justify the next step.

    Contrast that to on premise where you need big servers and a huge CAPEX investment… you almost need to commit to the whole thing before you start…. then take that with a complex deployment that spans years… you start to question the ROI and end up scrapping the project. This is why most PLM has failed in the past. Just can’t get the return before you end up losing interest.

    Great write up. Thanks.

  • beyondplm

    Brain, thanks for your comment!

    Actually one question about CAPEX. I’ve heard few times from customers they are actually preferring CAPEX and not OPEX for several reasons – mostly financial policy and organization expenses. What is your experience with PLM 360 customer base?

    Best, Oleg

  • When we first started selling cloud this was a big topic (4 years or so ago). Especially for really large organizations. However, now we so much cloud software buying out there companies seem more accustomed to it. I haven’t heard that argument in a while.