You have to be smart about the goals of your project. Having a great idea isn’t enough. In such a challenging space as software products, you need to create a program that stands out and achieves something that no other software can provide. But even if your idea is the next great thing, your staff who helps you get there, and the way it is presented to market may be the determining factors in your ultimate success. Watch this video to gain key insights from our best Q&A on this very topic.
Question: Thanks Andrew. Michael Dudley here. We’re developing software all the time with Ben. The question I always have particularly when you’re dreaming up new products is how are you going to sell it? Have you gone to market with this thing?
Andy: That’s a tough question. It’s amazing if you think of that metric 70% of internal software projects never deliver their business case. I couldn’t imagine how much venture capital is going into software products that ultimately never generate any revenue or return on capital.
I will share with you our dirty little secret. If you read some of the articles in the press about us, they’ll say disruption about our model. A big part of our dirty little secret is we’re a great sales and marketing company. In terms of selling we’ve got pretty good relationships already.
If you imagine the challenge we have, a) general councils have no technology, no legal specific technology, they don’t know how to buy it. The second thing is the end user is the marketing team, Sometimes they try and shift the budget over to the marketing budget. So it is a two step sales process.
So the issue we have is not people agreeing this is the right solution and they should do it, but it is around navigating that is the challenge. We have a number of deals that have had very long sales cycles that shouldn’t have. But ultimately if you want to know our distribution approach, it is simple. We write best practice, we do research on best practice and how to run legal functions effectively.
We have inside sales team that sets up meetings for our commercial directors based upon sharing the newest findings from our research. That’s a conversation not many general councils have because no one else is providing that research. They are interested each quarter to catch up with us. We have senior sales guys who go out and hopefully identify issues that we can bring on board.
Question: Good presentation. How do you retain staff? How do you incentivise staff and retain them?
Andy: The challenge everyone has and I’m the same and you get boring and ask other business leaders that question. I wish I had a particularly compelling answer. My philosophy is two fold. One, I try to present us as a really exciting place to work. Once people understand our story, they’re typically reasonably excited. The mistakes I’ve made are long and many. I think about a couple of things. One is, is this guy really excited about the long term, journey here?
The second is we’ve got a really rigorous interview process. Just prior to this I’ve had a meeting with two of our newest hires. They said, we didn’t think we were going to get the job because there were so many steps in the interview process. Early on I made mistakes because I rushed hires and followed my gut and all those sorts of foolish mistakes. Now we’re highly systematic, we do behavioural testing, we do role plays of the particular role. We sometimes get the last hire in the tech space, I’m not a tech expert, so I get people who are better at evaluating someone’s technical skills than me to evaluate them.
But it’s ultimately the biggest challenge every business faces.
Question: What is the price difference Andy, compared to the traditional way of running that particular product where the lawyer does it?
Andy: It’s interesting, the pricing. It’s something I think a lot about, read a lot about and still don’t have the perfect answer to pricing. We’ve just going live with our newest solution. It’s a bit of a hope and trying lots of things before we get to the right answer. One of the things we’re very conscious of, is at Plexus we don’t want to be perceived as cheap. We want to be perceived as good value. So if you think about lawyers would never trade quality off to get cost.
I think from a business standpoint, grabbing market share by discounting is a short minded approach. What we try to make sure is that the client is aware of what is the total cost of providing this service currently. Quite often our competitor is our client. They’re currently providing this service internally with their own internal legal team.
We step them through a process to think through how many of these activities are you doing a year? How much time do you think your team is spending? How much time do you think your team is really spending because they always underestimate that one? What is the total loaded cost? What is the opportunity cost of the marketing team going back and forth? How long does this take? How much would you value shortening that cycle down to the same day?
We’re a lot more expensive than having an internal person provide the same service. If you look at parity versus another law firm, we’re probably 20% more cost effective. We could discount but we want people to understand this is about value, not cost. We’ve got a fair credible statement now that says all these other guys had the exact same approach as you, no one has ever returned to the old ways of doing this.
Question: It’s fascinating, because when you think about automating and developing software, you would have thought you could automate the process, the default mindset I would have is we’re going to smash the price. That’s how we’re going to go in there and win it. If you see someone doing really well and using technology but not pulling the bottom out of the price, it’s surprising.
Andy: The other thing to say is make sure the client is aware of what the greatest benefit is, because they run the cost. Technology is going to be cheaper but I say to them, look, my Dad had a Nokia 8210 til about a year ago. None of us would want to go back to that although you can buy one of those phones on eBay for $10. An iPhone is so superior in terms of what it can deliver in value.
Question: You’ve got to run a trade promotion and you’re a marketing executive somewhere. It’s normally a two week turn around and you’ve left it a bit late. All of a sudden there is a lot of pressure and stress around that, whereas for these guys their speed of turnaround is radically better.
That’s a wrap. Thank you to the people who have testimonials. If you have not done one, you can see Dave and he will stay for another twenty minutes to facilitate that. Thanks for coming.
Whether it is the final marketing or the process that gets you there, you need to know where you belong in the software industry. Sometimes selling for the lowest price isn’t the message that is going to win you clients. For some designs, competitive pricing is key, but for others it is much more important to prove value and quality in order to beat the competition. No matter what model you are working with, it is going to ultimately be the people you align with that make the difference.
If you are looking to put together the perfect team to realise your software design, get in touch with us right away.