Stop Leading with Product and Deliver Better Outcomes
Technology is a tool, just like a hammer or a wrench. Skill lies in the wielder of the tool, value in what gets built.
By Larry Walsh
A channel journalist recently interviewed me about opportunities for partners in the not-too-distant future. His first question: “What are the technologies that partners need to adopt to find success in the coming years?”
My response: “Why are we going with product first?”
Of course, a good reason exists for that question often coming first in conversations about partner success. Vendors love to talk about product, even when they talk about the need for consultative selling that results in the delivery of systems or solutions. Product managers and line-of-business executives get paid on product unit shipments and revenue generated. And they drive partners to focus on products, even to their mutual detriment.
Business technology buyers and users are already gravitating toward products, services, and providers that can deliver better experiences and outcomes rather than just product. Nine out of 10 B2B buyers make purchasing decisions based on whether the supplier can provide a positive experience and outcome in advance.
And yet we continue to focus on product.
Vendors and partners need to recognize that technology is a tool and only a tool. The only thing business users are interested in is what the tool helps produce. Consider this: If a carpenter constructs a beautiful house, do you assign the value of that house to the builder’s skills or to the quality of the hammer?
Yes, the carpenter can’t build a house without a hammer, but the hammer is a means to an end. And the buyers of the house will never care about the hammer used in their home’s creation.
Servers, cloud services, PCs, software applications, etc., are like that hammer. Businesses use these tools not for their intrinsic value but for the value they help create.
So why do we continue to lead with products as a value proposition? Why don’t we – as an industry – talk about the use cases, workloads, and end products made possible by the tools we deliver to our customers? Why don’t we talk about helping customers create competitive advantages through the application of our tools? Why don’t we stop trying to push units and push experiences instead?
The technology industry is fixated on near-term returns, the quarterly number. Wall Street may care about such things, as do corporate executives who are evaluated and compensated for quarterly performance. Customers, however, care about returns, about how tools help them extend their business operations, revenue generation, and profitability.
The experience- and outcome-based value systems used by customers aren’t trivial. If you consider that all products are services, or at least have attached services, the name of the game is no longer to capture a sale. Rather, it’s about capturing and retaining a customer. The total customer lifetime value correlates precisely to the total recurring revenue produced by customers. If you can satisfy a customer by delivering a positive experience, that customer is more likely to stay with your brand. And that leads to higher total customer lifetime value.
Let’s stop pretending hammers have the value of their weight in gold and start talking about what customers want to talk about: making their businesses more efficient and effective through the use of technology tools. And let’s start instilling that value proposition in partners so they’ll focus not just on unit sales but also on customer experiences that lead to longer, deeper, more profitable relationships.