View from the Edge

Evaluating Technology Vendors, and Where Your Dollar Goes

In this issue, CarriersEdge co-founder Mark Murrell looks at what you can learn about technology vendors just by watching their sales reps.

A little while ago, I had an opportunity to do a presentation to a group of fleets and talk about how to implement technology effectively. Since I normally talk about driver training issues, or best practices gleaned through the Best Fleets to Drive For program, it was a nice change to be able to geek out and talk about tech for 2 hours straight!

The first part of the presentation was specifically about evaluating products. Since it was a broader talk about safety technology in general, we didn't talk about specific products. Instead we focused on how to compare similar products from different vendors and pick the one that's going to be the best fit for a particular organization.

There's a lot to consider when going through that evaluation process, but there was one section that seemed to create a lot of "Aha" moments for the audience - when I talked about what to watch for in sales reps.

I had started by talking about how a fleet's relationship with a technology vendor will end up being much more important over time than any particular set of features, so choosing the right product (whether hardware or software) is less about picking features and more about picking a vendor that's going to be supportive over the long term.

One of the things I said to watch out for is "slick" sales guys. You know the type - the superstar sales guy who's all about charisma, who uses your name 20 times in every conversation to show he's taking an interest in you personally, who touches the bottom part of your arm periodically because psychologists say you can make a connection better if you do that. The kind of sales rep who offers box seats to the game, wants to take you golfing, and has a standing reservation at the local upscale steakhouse. Those guys are a bad sign.

Now, I love a free meal as much as anyone else but I know that this kind of sales rep means trouble when it comes to tech products. And they mean trouble for two simple, specific reasons:

  1. The product should stand on its own and be sellable without requiring sales gimmicks
  2. All that salesmanship is expensive, and it's being paid for out of your license fees

The first reason is pretty straightforward - good tech stands on its own and doesn't require a shtick to sell it. There are certainly complex products that need a sales rep to help customers understand how to make the most of them, and that's fine. However, when more of the focus is on salesmanship and convincing you to buy, it generally means that the product isn't very good. Taking you out for dinner and building personal rapport, instead of learning about your business requirements and demonstrating how their product supports them, is an example of a sales gimmick designed to distract you from the product and get you to buy something because you like the sales rep.

The second reason is one that people often don't think about - if the vendor is spending money schmoozing you, they're not spending it on their product. Over time, that becomes a huge problem.

Consider two different vendors, with two different business strategies:

  • Vendor A has a traditional, sales-focused strategy where upwards of 50% of the license fee is allocated to the sales cycle. (I've seen situations where it's as high as 80%, but for this example we'll stick to 50%.) That includes salary and commissions for those charismatic sales reps, and expenses for dinners, events, etc. Of the remaining 50%, 20% goes to customer support and 30% goes back into the product.
  • Vendor B has a product-focused strategy and allocates only 15% of the license fee to the sales cycle. They spend the same 20% on customer support as Vendor A, but the remaining 65% goes back into the product.

Which vendor do you think is going to produce a better product over time? Which vendor is going to have quicker turnaround on bug fixes, and be able to add more new features to support your evolving business needs? It's probably not going to be Vendor A.

The issue of bug fixes highlights another difference between these vendors - even though they're both allocating the same amount for customer support, they'll have vastly different outcomes. Because Vendor B has a larger R&D budget and can fix bugs more quickly, their support reps won't be constantly dealing with the same issues over and over. As the baseline quality of the product improves through the natural cycle of field usage - bug report - bug fix, their support people will be able to focus more on helping customers maximize value from the product. Vendor A, on the other hand, will see its support reps chasing their tails because known issues take longer to get fixed (if they get fixed at all). That leads to frustration in the support team, which quickly translates into poor experiences for customers.

This is a large part of why I said that the choice of vendor is more important than the specific set of features in place at any given time. If the vendor is focused on their product, and reinvesting a substantial portion of their revenue back into the product, then that product is going to improve exponentially over time, and the total customer experience is going to improve along with it.

As a result, it really pays off to watch how different vendors manage the sales process and try to develop a sense of where their focus is. You can certainly ask what portion of your fees get reinvested into the product, but most vendors probably won't disclose those details. That's okay, though, since it's easy to tell by watching their actions through the sales cycle, and talking to their customers about their experiences with customer support, and the frequency of bug fixes and new features.

In a future article I'll talk more about what else you can learn about a vendor by talking to their customers (and even people who aren't customers), but for now watch for the things I noted above and see if you can spot the differences!

View from the Edge is a periodic review of best practices in risk management, driver development, and technology for the trucking industry, produced by CarriersEdge.

CarriersEdge provides interactive online driver training for the North American trucking industry. A comprehensive library of safety and compliance courses is supplemented with extensive content creation and customization options, full featured survey tools, detailed management reports, and the industry's first dedicated mobile app for driver training.

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