Why Selling Software Is So Difficult

Software is a complex product and in order to make a sale you need to not only successfully identify and solve a problem for a specific set of customers you also need to reach and educate them on the value of the product in the right sequence with the right information at the right time in the right form/media with the right offer.

It gets complicated. But at some point you need to figure out where in the software marketing and sales genus you reside. Here’s a back of the envelope calculation of how many different combinations there are. (By the way, this is assuming you’ve already reached product/market fit.)

Industry:
Let’s say there are 150 meaningfully different industry types when it comes to software sales

Size of the company:

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  • 1 employee, <$200K
  • 2-5 employees, $201K-$600K
  • 6-100 employees, $601k-$20Million
  • 101-1000, $20Million-$500Million
  • 1001+ employees, $501Million+

Stage of technology adoption

  • Early adopters
  • Visionaries
  • Early majority
  • Late majority
  • Laggards

Point in the buying cycle

  • Problem identification
  • Criteria creation
  • Search and evaluation
  • Selection

Category of software/business need
Using the list of categories under business needs at Get App, the number is about 150

Delivery

  • Saas
  • Hosted
  • On premise
  • Hybrid

Payment

  • Freemium
  • Free trial
  • Monthly billing
  • Yearly billing
  • One-time license fee
  • Pay as you go based on usage

Lifetime value of a customer

  • <$100
  • $101-$1,000
  • $1,001-$5,000
  • $5,001-$50,000
  • $50,001-$500,000
  • $500,001-$1,000,000
  • $1,000,001+

Buyers vs users
Are you talking to the buyer, the end user or is the buyer also the user?

SO. Based on the above there are over 1.1 BILLION combinations.

Obviously that’s an absurd number, however it does demonstrate the huge number of possible ways to segment a market such as software buyers and that the media, messaging, timing and methods used need to match up with that segment. It’s key to take this into account whenever considering a strategy, tactic or recommendation.

What works for 37 Signals won’t necessarily work for you depending on your target market.

You are not going to use the same strategy to reach an enterprise sized CRM buyer in the oil industry as you would a mid sized employee scheduling buyer in the fast food industry — that much is clear. However, if you have two nearly identical targets whose only difference is that they are at different stages of the buying cycle, you still need to treat them slightly differently.

By the above definition, a company might be targeting 100 different segments of customers in various stages in the lifecycle and while you won’t be able to create custom communications for each and every one, your strategy and communications need to cover a number of possible segments.

The trick, however, is that the better you are able to define and target an extremely specific segment across all of these dimensions the easier your job will be of marketing and selling because it will help dictate how, where and when you reach out to your segment.

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