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Marketing to the "do nothing" crowd?
In recent months we have noticed an increase in prospects choosing to "do nothing" with a purchase (ERP system). They know their current system isn't working and won't grow with them but doing nothing is easier than committing to something. Has anyone else faced this and how have you overcome it?
Thank you,
Daniele Fresca - IQMS
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9 Answers
Jeff referenced the potential negative impact of needing to rush a systems project due to quickly developing customer requirements. This underlines the vulnerability a client has not knowing what their requirements would be were funding available to implement a system upgrade or replacement.
For the "do nothing" crowd, I would assume that a lack of bandwidth or simply not knowing how to manage the process of defining implementation is as much a limiting factor as not having budget.
If this were my challenge, I would try marketing a limited consulting engagement to facilitate outlining project requirements. The value to a client being: if they know what they need they could better calculate ROI and are therefore more likely to get a project funded.
I'd want the message of the content/collateral to be "Define ROI and get your project funded" "Creating Tangible ROI" "ERP Upgrades: compelling cases for ROI"
"Hidden cost of legacy systems" etc.
This may not make solve immediate budget issues for prospects but as a vendor you are at least closest to their issue and more likely to capitalize when funding is available.
"Do Nothing" prospects face two real issues: The risk that a customer requirement will force them to undertake a systems project that they have not planned for and the risk of missing out on the operational efficiency that they would otherwise gain from a new system. Those are the points I would stress in my marketing if I was selling ERP software. The hitch, as you know, with the ROI argument is that it is up to the customer to achieve the ROI from your solution. If I was a busines owner, both of these issues would concern me, but the customer requirements issue would be the most critical concern.
Hi Daniele! You and IQMS may be facing an issue that has nothing to do with the technology or with funding per se.
It is the organizational and leadership gap between corporate executives and the management level. That is, the gap caused by lots of director-level folks losing their jobs during the bad economy.
Normally, execs develop the strategy, the directors interpret it and craft implementation plans, and managers oversee the execution. Absent directors, managers struggling with outdated ERP may be too far removed from the executives to be able to make their case. Other managers may fear that suggesting expenditures during hard times would be a career-killer.
I urge you to assess whether such aspects may be at play in your "do nothing" opportunites. Also do what Jeff and Stepehen suggest.
Doing nothing may have to do with the calculation of return or the missing level of management and economic times. It also may have to do with the real fact that any project to be undertaken during difficult economic times with a missing level of management is suicide. With the history of implementation and upgrade risk any system brings to a business there are very few good windows of opportunity. Basically the customer has to be relatively cash rich and not mind spending countless months and millions of dollars to implement and retrain their reluctant workforce. Business changes faster than traditional enterprise systems can keep pace with...plain and simple.
There are new enterprise systems that deliver simple, powerful and easy to use Apps on top of existing systems, processes and technology. These custom-built, single purpose Apps are mobile and cloud based - including internal clouds. Users interact via browser, outlook and excel. Change management evaporates, technology is no longer a barrier but now an enabler, and innovation in every aspect of a business can deliver revenue, margins and collaboration. Since we've removed technology barriers, custom no longer means long or expensive. With our Innovate in a Week program you can rapidly design, execute and measure any initiative, strategy or opportunity. You set the target and define the benchmarks for success. If the results prove beneficial, as Stephen said, the investment can be made with the proceeds.
Great discussion guys. With the fact that many distributors are paying high maintenance for legacy systems that have been sunsetted, business owners need to consider the cost of doing nothing.
Stacey,
If the legacy system has been sunsetted does the customer have to pay maintenance anymore? They certainly can continue to run their current version without direct vendor support, right? If so, doing nothing can become even less expenseive...perhaps a bit riskier...but less expensive.
Steve, unfortunately, the answer for many customers is yes. In many cases the customer has only a license to use the software. They do not own the source so that legally, they cannot continue to use the software with out paying the "support" charge.
Stacey,
My experience with software licenses are that they have a term and are not tied to maintenance. I understand they don't own the source code. I just did't realize contracts contained terms of use tied to maintenance being required. These poor customers -they have to pay maintenance just to be able to continue to run the software for which they already bought a license. No wonder customers are so upset with their software provider.
Exactly!
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