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How to Sell Enterprise Resource Planning (ERP) to Small and Medium Business (SMB) ClientsTip! The bottom line is that website success should be driven by good solid business planning, planning that goes beyond merely getting your site high on the search engine results pages. Instead, look at what it is you are really trying to achieve from a business perspective and make sure it is SMART. 1. SMB market situation
Big competition -The SMB market is characterized by a lot of competitors, who are trying to be market leaders. The competition is tough and we have to fight hard to get a sale.e Little earning - At the same time, it's a market that gives us a little earning. It is very hard to drive a consultancy firm living only from the earning from small a midrange customer. Decision making about 1 year. The decision making does not come overnight. You have to have patience and ensure awareness. You have to keep pushing the same winner buttons: branch specific, state of the art solution and low cost price. ½ day to convince the customer. When the SMB customer wants to se you be sure that you are on immediately available. The SMB company doesn't wait for you. You got typically ½ day to get yet another invitation into the world of the SMB company and to get the sale.
This leads and trigger white lies - It's a hard market and we all know that when we're pushed enough we start to make our little white lies. So everybody without exception makes these white lies or conceals the truth. 2. The characteristics of the SMB customer
Hardworking - They work 24x7x52. They know more than anybody that success in the SMB market requires hard work Humble - They have a very humble approach to the way of running business. Proud - They have built their business and are proud of it and remember we are only invited into. Simple minded - they just love simple solutions. Often they cannot afford the luxury of endless meeting to make decisions They know the art of survival - They know more than anybody the art of survival. The must be flexible and continuously change according to their business environment Tip! The opportunity to bring people of many different backgrounds together for a common purpose is one of the hallmarks of the internet, and it is certainly on display in the pages of the average business planning blog. Their business is their life. Once I heard a sales man propose daily fines if we didn't succeed in meeting the go life deadline in time. He didn't understand that they were more concerned about surviving the implementation. An implementation drains the business for energy and if its fails it will kill the customer. 3. SMB customer's perception
It's legal to say that Enterprise Resource Planning (ERP) is not good - Even persons on the street seems to know. We're working uphill right from the start. Too big - It can be difficult to maintain the overview of ERP since there are too many functionalities and constant changes. However, it is necessary to understand what is available and how it can benefit them. On the other hand it takes the customer 5 min to ask for the very deepest functionalities the ERP
system. I feel sorry for the other systems. They must give up much sooner. You're lost in the ERP system - Nobody seems to know what is going on, there are too many bad stories and you cannot control development. Not user friendly - ERP much be repeated again and again. The new customers haven't heard the good news. Too expensive - It is an old story. Now it is cost effective. Tip! One of the best methods for getting the business planning help that you need is to contact an attorney. Yes, this may be more expensive, but when it comes to setting up and running your business, having someone with a legal edge to it may make it go much more smoothly. 4. Enterprise Resource Planning (ERP)
Superior Industry specific ERP template - It no problem to stand up and say: I believe that this is the right solution for you dear customer. The king of functionalities - This is it, I'm still amazed when I make new discoveries. ERP covers the latest best practices and process need for a specific sub industry. The best documented system - this is in fact a unique selling point. You will get all the support you can get - Some of my colleagues just have to learn to ask within our organization or ERP politely. Just ask politely and you will get the help. Respect - Everybody respects the ERP system. We know and the customer knows that this is state of the art. Often it is chosen in the preliminary phase only as a reference system to ensure that the cheaper system is good enough. Tip! Another part of good business planning is to find a mentor from whom you can learn. In the world of business, finding a mentor is one of the most important things any new businessperson can do. You have to earn the trust - You don't immediately have the customer's trust. You have to earn it. 5. Presales issues
Do not only use salesman. You cannot sell an ERP system with PowerPoint presentations or CATT's alone. The customer has met too many liars. Trust - show the system. The customers want to see the system in action in detail! They want to see it before they can trust you. Be honest so it hurts - You have to be very honest and that may hurts. Then the customer will trust you. The point is that you don't have to lie. Remember that you have the best solution on the market in your hand. Trust it. Show the pain points and challenges - Show that you know their business by indicating paint points and challenges that can be eased by using the system. Often they are amazing of the possibilities in the ERP system. Tip! Developing a Strategic business plan is a crucial element in determining your ongoing business success. You can maximise business growth and minimise risk through effective strategic and contingency business planning. Emphasize template. Repeat again and again that this is a template and that the major decision already has been taken. We don't need 1 year of analysis phase. Narrow the scope down. Continue to control and focus on the scope to keep on narrowing it down. Don't make it bigger every time the customer has a question. Fixed price - This shows the customer that you really believe in what you're selling. 6. How do you present the system?
Trust - show the system, they need to see it working in real life. Focus on enduser functions. When you show it, focus on enduser functionalities. Customers often have a perception that the system is very poor in this area. Even though you might think it is so simple, show it anyway. You get acceptance right away. Tip! The business model to be applied pretty much decides how much return can be earned and this is why proper business planning is crucial. Start from scratch and build up the trust. Build a relationship of trust and a common ground of understanding from scratch. Show simplicity - Keep it simple. Don't show 8 different approaches to a problem. Show only what you believe in is best for them. Be straight forward - Show how easily the ERP solution solves even the complex issues. Answer "razor sharp" every time - When you get a question, answer "razor sharp" every time. Don't say: "well it depends". What kind of functionality
do you have in mind? You are the master. You are the one bringing in the best practice show it. You must be the expert - The preseller must have basic SAP knowledge -
he must even be a standard expert. Don't sell programming in the presale phase. You will not get the sale. Demonstrate excellence - Show that you control the system - not the other way around. Tip! Much of the apparent drudgery of business planning comes from the poor, if any, processes adopted in business or corporate planning. Business planning does not have to be complex, but it does take process, thought and data. 7. Case study
Big consulting firm visit - A customer initially had a visit from a big consultancy firm. They did what they are good at: selling relative expensive ERP solutions, typically in a consulting engagement. But this is wrong in the SMB business area; the cost for such a solution is far too high and that scares the SMB customers. We on the other hand can offer ERP, which is industry specific and can give the customer a cost effective solution that matches their business need 85% more. Presale - simplicity. Keep the simple. Again and again you have to repeat that for yourself. Demo Think in core processes. When you prepare you demo. Don't be tempted to use complex solutions. This is a game that makes the reality show like "Temptation Island" look like kindergarten. Go for the simple solution even though it doesn't fulfill your ambitions. The customer loves and understands simplicity. Show whole core processes. Make them understand that you know the business. Show it all the way. They win - Then you win - a win win situation. Tip! Strategic business planning will take you from thinking about starting a business to actually doing the things you need to do to get a business going. The longer you put off your strategic business planning process, the longer it is until you launch. 8. The Seven sins in the SMB market
1 ~ Lust - Sell a solution to their business issues, not a solution to your vision. Often the consultants and presales want to implement a solution just to be able to work with the new functionalities in the ERP system. That's one of the reasons why ERP implementations are getting out of control 2 ~ Greed - Level you earning - friendship. Don't sell a total solution from the start. Make a quick start. Be friends making longterm partnerships with the customer. Then you can make more money on the longterm. 3 ~ Gluttony - The "big" has enough money. When we work in the SMB area we don't make special programming. We must use standard functionality and use it to the extreme. 4 ~ Pride - Don't be arrogant. I heard lots of stories about, how we have lost sales not because of the system but because we act arrogant when we meet the customer. Why do we do it? We are good. Apparently we aren't good enough to be humble and respect the customer. 5 ~ Laziness - Hardworking consultants. When we work in the SMB area we must remember that this is not a place for making easy money. We have to work hard to succeed in the SMB area. - We have to be not only an SD consultant but a logistics consultant with FI/CO common knowledge. Tip! When it comes to starting a business, there are few things as important as first hand knowledge. The opportunity to sit down with a business owner who has already been through the startup process can be quite valuable, and it is this atmosphere the business planning blog attempts to create. 6 ~ Anger -Lies are unnecessary you don't have to lie. So stop. Be the trusted advisor all through the implementation and after sale time. Then you have a customer that trusts you. 7 ~ Envy - You have to show that you are worth you money. You have to be not only the consultant, but also the project manager and the change management consultant. In the end it makes the high wages of the ERP consultant justifiable for the customer. He gets value for money in driving his business. Not just a consultant that makes a system setting For more information
To learn more about the IBM's Serivces for Enterprise Resource Planning or any midmarket offerings, contact Henrik Scheel (Hscheel@ch.ibm.com) the Business Unit Executive for Services for Europe, Middle East and Asia for SMB. The Sales Guide is result of intensive collaboration and sales exercise from IBM's own SMB Sales force and our Value Added Resellers such as EDB Gruppens, SerCon, InSA and SAP Consulting Italy. Tip! When you start your strategic business planning early you have the time you need to get all the elements of your business prepared before launch. 90 days is a good timeframe to give yourself for strategic business planning. Henrik Scheel joined IBM in 1999, when IBM acquired MAS A/S. At that time, he was responsible for the ERP / e-business market segment in the Nordic Region and closely involved to introduce the Enterprise Application Service portfolio in IBM as Executive Assistant to the Senior Leadership Team. After this Executive Assistant position which is IBM's executive fast-track program, Henrik held numerous leadership and management positions, before assuming his own Profit & Loss in 2003 as the Business Consulting Services Unit Executive for SMB in Europe, Middle East, and Asia. |
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