Enterprise software marketing: Sell the value, not the box

Enterprise software marketing: Sell the value, not the box

Summary: Many startups (and even large software companies) focus on features instead of customers. Stanford professor, Steve Blank, redefines how a software startup should approach... everything.

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Many enterprise software startups view success as a simple equation: build a great product and the world will line up to buy. There are two problems with this logic. First, it assumes that great product always drives great success; and second, this thinking leads to feature-oriented, rather than customer-centric, decisions.

The tendency to focus on features rather than customer needs is understandable. After all, the team pours its life into refining the idea, building features, designing the UX, testing, and all the other incredibly demanding tasks associated with launching a product.

The drive to perfect features before achieving a profound understanding of customer needs, pains, and business context comes from the mistaken assumption that technology, like idealized love, can overcome any obstacle. This mindset pushes many startups to believe their core mission is creating a great product.

In a blog post and video, entrepreneur and Stanford professor, Steve Blank, challenges startups to rethink the fundamental nature of their challenge and goal. Instead of pushing for better product and technology alone, Blank defines a startup as:

A temporary organization designed to search for repeatable and scalable business model

Viewing startups this way has profound implications for every aspect of the company: culture, people, marketing, product, and virtually all other areas of planning and operations. If building a sustainable business model is your absolute goal, then all decisions should reflect that reference point.

Here is Steve Blank's short video in this topic, created as part of the Kauffman Foundation's Founders School:

Blank's perspective has three important implications for enterprise marketing and sales. Although tailored to startups, these points are equally valid for people in large or established software companies, who may forget their real job is satisfying customer needs and creating delightful outcomes for buyers: 

  1. Customers are king. There is no substitute for spending time with real customers in your target market. Although the old adage, "the customer is always right" is often wrong, never forget that your company has little value outside the benefit it provides to customers. When it comes to selling, theories about the world are meaningless unless real customers actually buy.
  2. Markets don't buy, people do. The term "market" is an abstraction designed to generalize about groups of prospects or customers. In the zeal to identify target markets we may forget that individuals, not markets, issue purchase orders. Strategize for the market but sell to the person. 
  3. Sell value, not features. In enterprise software sales, feature wars push combatants toward commoditization — as software vendors leapfrog each other's feature lists, buyers learn to pay lowest dollar using missing features as the lever. Instead, build value by selling the meaning, not the box.

The best enterprise startups internalize the customer's mind so thoroughly that the resulting product actually anticipates customer needs. Products that meet this high standard are virtually always grounded in a deep and profound understanding of the customer; it rarely happens by chance.

In my experience, startups who don't get this message drift from one solution to another, never getting the traction they need. And large companies who focus on features, rather than real value, end up looking like their competitors in an endless cycle of non-innovation.

Also Read:

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CIO / CMO impact: Three disruptions that demand your attention

Dreamforce 2013: Three startups to watch

Enterprise software and the curse of vendor sameness

Topics: CXO, Enterprise Software

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  • The Power of Business Model Generation

    Steve Blank is a proponent of Alexander Osterwalder’s view of what constitutes a business model, its role in increasing the likelihood of success for a business, how to create it. Deb Scofield, another Osterwalder fan, applies the same approach when working with entrepreneurs.

    She discussed this when she was a guest on a CxOTalk show. http://cxo-talk.com/deb-scofield-owner-mills-scofield-llc/

    In particular, she emphasized the importance of understanding how the customer views the value from a proposed product or service, and getting out of the office to see and meet prospective customers.
    LisbethS