The time value of money states that if you have £1,000 now, it is worth more than receiving the same £1,000 in six months or a year’s time. After all, you could invest that cash into new products and sell them for more than you paid, ending up with a larger amount of money instead of letting that cash stand still and do nothing. But what about the money value of time, otherwise called opportunity cost?
When you are working with IT experts as your customers, you can often find yourself getting into conversations around their skills and how they could deliver everything that you offer yourselves. The message here is why should they pay for your time, when they could do all this themselves? This is a classic case of opportunity cost. To answer this question, you would typically go into what else the team could achieve with their time and skills, and where you can help them to extend their reach.
There is a personal element to this as well, however, whilst you could argue successfully that your customer might be able to achieve more using your service, are they willing to hand responsibility over? Are they concerned about their own roles in the future? Are they worried about bringing in a third party that they have not worked with before, as any mistake can be a career-limiting decision? Or is it more personal than that, and they have a personal connection to the technology that they don’t want to give up? The truth is that it will be a mix of all these reasons, but pride in their own skills and knowledge can be the biggest intangible factor in any conversation.
Selling to experts is both personal and professional
Understanding this mix of personal and professional drivers can be the difference between a successful sale and a missed opportunity. To approach this and increase your chances of success, you have to look at your overall positioning.
The traditional model for open source companies is to sell support and services. When something goes wrong and the experts can’t easily fix that problem, then the glass will be broken and the call will go out for help. This creates a perception that you are there for emergencies or as life insurance only. For those expert contacts, you can be seen as a last resort rather than the first person to ask around potential opportunities.
The perception here is that you are someone to call on when your customers have failed – for those who think of themselves as experts, this can lead to a sense of injured pride, whether that feeling is real or not. You're also not demonstrating any value around ongoing partnership and helping that customer/company achieve their business goals, and see how you're an integral part of it. Instead, you're just ‘there in case of emergencies’.
Yet this business model around open source is under threat, as cloud providers will often offer an open source package as a managed service that can be bought as a subscription. Customers are happy to pay for that cloud service and get what gets termed as support with it. Yet many organisations need much more in-depth and full featured support to meet their goals. For companies selling services there is a lesson here that individuals are happy to pay for long-term value when it is linked to infrastructure but may not pay out when it is linked to people. This mindset is one that any seller will have to bear in mind when selling to experts.
Changing perceptions around support
This matters because it affects how companies operate over time concerning software opportunities, and with open source in particular. The open source community evolves over time; contributors and committers will discuss what the community around a project wants to see, and then develop those features, bug fixes, and updates. All of this takes time, and it needs to be paid for too. Open source communities have to be remunerated for their work, and compete with other providers that can take advantage of the software for themselves.
This takes ongoing and predictable revenue, which is harder to create when you are engaged in ‘break-fix’ work. So how can you get out of this box, and work with the experts at your customers? You have to focus on how to create more long-term value as part of your approach. Putting in follow-up sessions for deployments as standard can be an opportunity to find and display the value of that knowledge, and lead to more ongoing services revenues. From there, you can create more proactive managed service opportunities through regular collaborations on assessments and performance improvement services.
This change in approach is a tough one. It has to be something that is embedded across your entire organisation. It will affect how you design your business around compensation, and the kind of people that you recruit. Your approach to customer success and how you nurture those customer relationships becomes essential.
Alongside bringing on your own experts, you will have to look at the people skills side of the coin and identify those who are as adept at handling relationships as they are with technical support. This is an expansion of the approach that cloud service providers have already implemented and puts it to work for the benefit of the open source community that does the day-to-day work around projects.
Putting the channel at the heart of the cloud marketplace economy
Over time, your approach around selling to experts will shift. Rather than being in a transactional relationship, or responding to the business equivalent of the Bat-signal up in the sky when something breaks, you can deliver more value over time. This will also support the open source community as a whole, ensuring that this approach to creating software that benefits everyone can continue in the future. This will help you sell your services now, and help that customer get value in the future.
