I was with a vendor the
other day that said he needed a “demonstration of intent” to take
to his management before he was able to engage with us.
The “demonstration of
intent” is that in-advance commitment vendors like to have before
they commit resources to any prospective project at a
customer. It comprises, usually, a small amount of money up front
(“to meet costs”), or a letter that indicates that upon
successful conclusion of what-ever-it-is, there will be a deal on the
The thing about such
requests is that they often come in advance of any proof of tangible
value. A presentation or case study is not such a demonstration.
My answer to these
requests, usually, is “we don't pay for pre-sales”. And why
should we? The burden for demonstrating value – in our specific
context – must necessarily be
elsewhere. We don't have the bandwidth, anyway, for speculative
investigations of things that might
think it important, at this point, to characterise a definition of
pre-sales. It's any situation in which the primary objective is to
demonstrate to us
there is value that ought be pursued. When someone proposes, for
example, a new way of using data that will enhance revenue or cut
costs, proving those claims is just a cost of doing business. Of
course, any kind of proof that relates specifically to us is going to
cost money. It'll cost us too: we have to invest time and other
resources to help.
don't be asking for money to “meet costs”, because it is likely
that we'll ask for money to meet ours.
people, of course, will argue that this kind of thinking means that
smaller companies (who simply don't have the money to invest without
commitment) are locked out of deals with a larger organisation. That
probably true, and its too bad. Its why smaller organisations tend to
have smaller clients to start with: the costs of getting in the door
rapidly accelerate the bigger the potential customer.
By the way, I also
raise an eyebrow when the term “proof of concept” comes up, which
is another way of saying pre-sales.
A pilot, on the other
hand, is something quite different. The purpose of a pilot is to let
us see how a particular new thing will work in our specific context.
It teaches us the lessons we need to operate it successfully if it
goes ahead. And it lets us uncover any technical or procedural bugs
we'd need to address during a ramp-up.
A pilot is not about
proving value. It is about demonstrating that operationally
we can do whatever-it-is.
speaking, a pilot is pretty much a full implementation of the new
thing. We like to make sure that our partners (which is what a vendor
would be, if we are actually going to do a pilot) are in a situation
where they, too, are getting something from the arrangement at this
point. Though it might not always be money.
have one further point to make on this subject. And that's about the
amount of investment vendors have to stump up to introduce us to
like every other business, have budgets we must adhere to. Most of
the time, they are decided far in advance. And usually, there is no
fat in them at all. We are asked, year on year to find cost savings,
in fact. We make our investment decision based on the value and
capabilities we have now, or know about about at budget time.
when someone shows up with something unique, there is often a
scramble to make anything happen. Sometimes we actually can't
make anything happen. I often wonder, when I sit across the table
from a potential partner whether they realise this, or think we're
playing a negotiation game.
can assure you we're not.
necessary to be candid about these things. And for vendors to
recognise that the price of getting something into a large customer
is directly proportional to how quickly they want it to happen. A
sales cycle of a year or more (which fits in nicely with our
budgetary cycle) can be circumvented, but only where practically
everything gets paid for up front.
is the key thing from our point of view: if we try to slot something
into a programme out-of-cycle, it means we'll have to cut something
else. Presumably, since it got into the budget in the first place, it
was quite important.
is a brave person that deprioritises something everyone has agreed is
essential in favour of something that practically no-one knows about,
or is new or especially novel.
is another term I sometimes hear from vendors: “we will do
something but you need to have skin in the game”. Since when did
investing our time and resources in working with you not become skin
the game? We have skin in the game from the first meeting.
let me close with a summary that might be helpful. We'll talk to
anyone that can help us build our business. But be ready to prove you
can do so. And recognise that any new thing we do will likely require
us to negotiate a compromise somewhere else.