Business Strategy: Is your software business suffering from complacency?

Business Strategy: Is your software business suffering from complacency?


It strikes me every week again when I publish a new edition of my podcast how much contrast there is between the vibe in the new generation software companies and the established ones. You can feel it in everything – the big idea they are after, the focus they have, the determination to make a transformative impact, their business strategy as a whole.

Business Strategy

I wonder out loud: Why? What is it that makes this difference so obvious? What I often feel when I am working with established companies is ‘complacency,’ i.e., an uncritical satisfaction with oneself or one’s achievements. That’s dangerous. It’s opening the door for the new generation to gain ground and take over. So, the question is: how can you avoid it? It all starts by sensing it. Sensing complacency seems hard, it’s born out of self-talk, and often that takes over reality. Here are three common signals across product strategy, sales, and marketing:

1) “Our customers are not ready for this yet.”

Having an extensive network in the Enterprise Resource Planning space, I hear this a lot. The category itself is a commodity, heavily competing over ‘better and cheaper.’  Too often product managers I talk to fill their roadmaps from the bottom-up with ‘stuff’ their customers ‘need’ and believe the ‘big thing’ is still the move to the cloud. The result: they tell themselves there are not enough resources for the innovation that’s needed, therefore waiving it away with ‘our customers are not yet ready for this anyway.’ Consequently, too many traditional players end up in a vicious circle that seems impossible to break, opening the doors for a new generation of competitors to walk in and take advantage.

2) “We always have to discount heavily in this sector to win new business.”

The second sign of complacency is coming from the sales side and is a direct consequence of the challenge highlighted on the product side: Winning through discounting. They often say ‘Sales is a lagging indicator of the health of the business. If sales go south, you better change’. So, a need for more discounting is often the very first sign something is wrong with the product, the value proposition or the approach of your sales team. Discounting is never done out of luxury. It’s done to buy the customer simply because the value is not clear enough (anymore). It’s therefore not the sector; it’s you where the problem resides. If the value were crystal clear, prospects would line up and be prepared to pay a premium over competitive offerings.

3) “We’re in a commodity market – it’s hard to differentiate.”

The third sign is coming from the marketing side. It’s the believe that because all solutions appear to do the same, one has to communicate about them similarly as well. I have done dozens of messaging heatmaps across various industries – ERP, Blockchain, Digital Banking, Financial management, Field Service planning, Not for Profit, etcetera – and the same pattern appears time after time: Most vendors aim to lure prospects along the same lines: Better, Cheaper, Faster, Features. Guess what happens… The vendor with the largest budget wins. So, for the rest, merely hope you are invited to the longlist for comparison and be allowed to give a significant discount to win the deal.

Do you recognize yourself in this? Acknowledging your company suffers from complacency is your first big win. From here you can turn the ship and start your journey to be remarkable (again).

Need some inspiration to define your step?

  1. Set aside an afternoon in the coming weeks to challenge the assumptions in your business. You’ll be amazed at how refreshing this will be.
  2. Get some fresh ideas on how to differentiate yourself in a commodity market
  3. Attend my free webinar to help your sales team turn prospects into buyers and increase deal value, rather than lowering it.
  4. Join the Be Remarkable tribe for business software professionals and get inspiration from industry peers.

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