Archives For tco

I’ve been saying this for years – detection is the most important part, and your managed services program is a critical component of the detection strategy.  I just finished up today’s webinar – the second session of, Accelerating Managed Services Sales.  Both sessions, March and April, where full, with a waiting list.  This article on Global Payments underscores the problem with most security problems – if you read the quotes from the experts cited in this article you will see the recurring theme, Firewalls and Perimeter security don’t do it.

In today’s session on managed services sales I presented several mistakes being made in the sale of managed services offerings. The biggest one is putting the focus on ROI – Return on Investment, or TCO – total cost of ownership.  Is there a TCO savings?  Probably – or maybe even a forceful “YES”, but don’t lead managed services sales with this.  Risk is the motivator here, and companies are losing the battle according to last week’s FBI reports.  If you’ve read my book, From Vendor to Adviser, some sound bites worth remembering from the above article include:

  1. The Heartland Payment Systems breach exposed 130 million credit card numbers – credit card data is still vulnerable.
  2. The Payment Card Industry Data Security Standard (PCI DSS) is highly prescriptive in nature, but simply complying does not ensure credit card security.
  3. The perimeter-based approach is not sufficient and fails to protect critical data and internal resources that bypass these point solutions.
  4. Firewalls, antivirus and [intrusion detection and prevention systems] are no longer enough to protect against rapidly evolving zero-day and insider attacks.

Remember, sound bites build credibility, however, as I explain in my book From Vendor to Adviser, they do not sell.  They help you relate to executives as long as the source is credible in the eyes of the buyer – so steer away from Infoweek type sources when gathering these sound bites.

Join me on April 9th – 11th for a deep dive into the world of selling highly profitable security solutions and you’ll also get a one hour one-on-one session with me to review your business and create a more effective strategy for selling more profitable solutions.

Sign up here! Making Money w/ Security (just 5 seats left)

© 2012, David Stelzl


Illustrated By David Stelzl

One of my first experiences with selling cars came early in my marriage when we decided to sell our Dodge van.  The vehicle was in great shape, no major problems, and well taken care of.  I listed it in the newspaper, and a few days later  received a call from a potential buyer.  He was a business owner, running a restaurant, and thought he might be able to use this van for his work.  After driving the van, he agreed it was in good shape, but then started complaining about modifications he would have to make before this van would really meet his need.

There’s an old Proverb that says, “It is good for nothing, cries the buyer.  But when he has gone his way, he boasts”.

The Strategy

In this case, the buyer gives hope that the sale is done, but then starts picking apart the product in an effort to bring the price down.  My car buyer had me believing I had made the sale.  Once he saw me mentally counting the money, he knew he had me.  Instead of paying me, he was looking for sympathy, adding up the costs of modifying the product to meet his needs. In the end, I gave in and sold him the vehicle for much less than it was worth. I felt taken once he left, and I am sure he was boasting on the way home.   I see this in business today.  Buyers will waver back and forth, moaning about changes or features that aren’t just right, looking for sympathy and price cuts.  The seller then feels bad and caves in.  Even the best sellers are taken by these tactics when the buyer plays his part well.

The Counter Strategy

1. First, it’s important that you know what your product is worth.  I knew the blue book values of my van…so I had this one covered.

2. Don’t try to shoe-horn your product or service into situations where it isn’t really a good fit.  In my case, I was not doing this – it was the buyer who called me, yet  I do see sales people trying to make their expensive products play in the SMB, while smaller companies accept projects that they are just unqualified to do.  In both cases, the pricing is often inconsistent with the real value of the project.

3. Don’t mark your close probability at 100% until the deal is done.  When I get a verbal commitment, it’s 90% – if an economic buyer gives the verbal. A verbal from an IT person, representing a new client, should be considered 20%.  In the case of my van, I was thinking 100% when he said he liked it.  I became emotionally involved in the transaction and gave into his tactics.   Looking back I realize this buyer was a shrewd businessman.  He knew what he was doing.

4. Stand firm.  If the buyer starts whining, go back to success stories, or offer to provide additional consulting with additional fees.  Nothing really works out of the box in the IT world, so assume there is work to be done.  If he can’t afford it, offer some less expensive options.  Chances are he is just working you on price.

© 2011, David Stelzl

August is almost here, and I want to thank Cisco for sponsoring me to speak to a select group of their partners…Seating is limited, but if you sell Cisco and plan to attend either the BlackHat or Defcon conferences this year, you can register here to attend this special session on selling security solutions.

We are meeting at the Rio on August 4th – in the evening; the location of this years BlackHat conference.  I’ll be covering some of the strategies and materials I personally use as I meet with executives all over the US, showing them why companies, no matter how much they spend on security, continue to be victimized by hackers.  I will also show you how my clients are leveraging this material to gain access to decision makers, and how justification is created to move forward.  Please plan to join me – I look forward to seeing you there!

Sign up Here (Click) while there are still seats available.

© 2011, David Stelzl

(You might have to turn up your volume on this – the audio is weak)…Why do some deals look good, then stall out?  In this short clip I explain what it is that makes deal justification strong, and where things fall apart.  I invite you to share your comments and experiences.

© 2011, David Stelzl

Visiting Cisco in Mumbai

In a recent sales opportunity we (the seller and myself acting as a sales coach) were charged with providing a competitive quote on unified communications (UC) products.  The company already uses UC, so the quote is simply an upgrade.  The seller assembled the quote, listing all of the necessary hardware, software, and services to move their client to the latest version.  The problem here is, the proposal has no differentiation!  It’s commodity product, necessary services, and a price.  You might say your uniqueness is in your people or your certifications, or perhaps you are the go-to provider for that brand of UC.  But in this case, you don’t have a platform to demonstrate value, so no one is going to see it.  What do you do?

The answer is in the discovery process.  Most of these deals are assigned to a presales technical person.  The sales rep has simply become a relationship manager, adding no value to the deal.  The technical person is generally too technical to effectively interact with the decision maker.  So the sales person and decision maker wait on opposite sides of the deal, the sales person hoping for a “yes”, and the decision maker checking against budget and competitive quotes.  Instead of sitting on the side lines, my client and I put some business level questions together to help us uncover the business needs surrounding this upgrade.

  • How does this prospect use their current unified communications platform?
  • What applications are they using with their phones
  • How do they use collaboration technology – how could they be more efficient if they knew more about it?
  • What are they not using, that would really add to their current business process?

This list goes on, but the point is, IT can’t answers these questions.  They may have an opinion, but it won’t be accurate.  These questions are asset owner questions.  Behind them is the understanding that someone is running a department that would benefit if they knew more about the power of UC.  With this in hand, the seller now has the opportunity to compare their findings with the technical findings their engineer will come up with.  With both in hand, the seller can now advise the client on how to change the way they do business.  Chances are, if the seller spends enough time with the top producers in this company, they will discover some of the secrets behind high performing employees, tie some of this success back to technology, and find ways to improve the current process with the latest upgrades, features, and add-ons available on a UC platform.  This is what it means to provide value – an effective value proposition.

Stay tuned for next month’s Free webinar – mark you calendar for June 8, Leveraging the Discovery Process to Justify New Business.

© 2011, David Stelzl

I was recently talking with an account manager responsible for breaking into a large fast food chain.  He could have brought in his PowerPoint slide deck riddled with company statistics, product offerings, roadmaps, and perhaps a list of customers currently using his product.  If he had, he would have looked just like everyone else calling on that account.  Instead, he did the unthinkable…

Reaching out to the local fast food franchise, he explained his role as an account manager to the local store manager and offered to come down to their location and work for free.  His assigned task the first morning of work was to help unload the eighteen-wheeler that shows up around 6:00 AM every morning.  It took about an hour to unload that truck, along with half of the people working at the restaurant.  But look what happened.

After working there for a couple of weeks, this rep was able to compile a compelling list of operational inefficiencies, from which he laid out a roadmap for improvement.  Calling the headquarters was now an easy task, armed with all kinds of data and recommendations that could turn around any fast food restaurant.  He had best seller material in hand.  He requested a short 20 minute meeting, citing his observations of cars leaving the restaurant simply because the truck was in the way.  He offered software and hardware solutions that would turn this truck around in about 15 minutes, freeing up parking space, making it easier to get in and out of the lot, and freeing up an army of people to go serve customers!  This is what executives want to hear, and this led to a multi-million dollar sale that put him ahead of quota after one short 20 minute meeting.  What are you doing for your customers?

True operational efficiency  can be easily shown if certain criteria exist.  First, you absolutely need to be in touch with you customer’s business, and second, your offering has to affect the business process in an undeniable way.  Business opportunities can be created when both of these are true, as long as you can get an audience with someone who cares.  Armed with the right message, this is not difficult.

© 2011, David Stelzl

Uniquely Yours…

March 29, 2011 — Leave a comment

Photo taken by David Stelzl

As I mentioned yesterday, when someone requires you to deliver ROI or TCO numbers as part of the red-tape process, the sale really isn’t based on ROI or TCO, but rather this is just a protocol the company has for vetting possible providers.  In most cases they will have a format or model for doing this, and your best bet is to work with them, using their models to make your case.  However, don’t fall into the trap of believing numbers are the deciding factor.  They rarely are.   The lowest price only wins when offerings are equal.  So what are you doing to set yourself apart?  Anything that can be documented can be commoditized.  And anything that can be commoditized can be computerized.  And anything that can be computerized can eventually be done on an appliance or smart phone.  Creativity and perspective are yours uniquely.   But make sure they are uniquely great.

© 2011, David Stelzl