Here are a few good reads on the impact of the fiasco with some snippets below:

Investors.com 

"Hardware purchases will be postponed, software upgrades will be postponed and customer projects will slow. This is not a time for (corporate customers) to take big risks. No big spending decisions will get made."

"Total revenue for the Indian outsourcing market is down 31% this year"

"Disruptions and uncertainty for U.S. financial markets are likely to delay some new software projects until the fourth quarter or next year"

ZDNet.com

"Right now, there are four clear survivors: Goldman Sachs, Morgan Stanley, Bank of America and J.P. Morgan. Tech spending elsewhere may go kaput. "

"Infrastructure consolidation projects will last for years. In IT spending surveys demand for consultants hired by the project remains strong. "

"Project managers will be in demand. Systems integration skills will be critical and you’ll need project managers to consolidate all of those applications and data centers as well as rearchitect systems. "

Ganesh Nagarajan of Zensar.

"The preliminary analysis of the current situation indicates that the impact will be short term and company-specific and though all strategy planners will continue to keep a watch on any further downstream impacts"

Computerweekly

"Tactical software and hardware spending will be hit first, followed by the more-strategic IT services in the long run"

"Software as a service could be a winner from this as could any model where people pay on consumption rather than up front cash"



Yeah, I am lazy!

Ray Wang provides an interesting perspective on what customers are demanding from ERP vendors. 24×7 support, transparency, SLA based services and better pricing are some of the factors he brings up. I can see similar demands on the services side of the business as well. Below's a list of some of the stuff I see happening:

- Pay-as-you-go pricing for "horizontal" BPO processes.
- Committed year on year productivity improvement.
- SLA based reward/penalty clauses.
- Ability to "own" applications rather that just get by the day.
- Transition at zero cost to the customer.
- Usage of reverse engineering tools to improve the quality of transition and possibly move towards "ownership" faster.
- Ability to 'transform' the shop through improved and streamlined processes.
- Quick rampup and rampdown.
- Well defined "unit of work" based productivity.
- Virtual offshore development centers to minimize security risks and lower switching costs.

The language wizards at Oxford define "commitment" as

commitment
  • noun 1 dedication to a cause or policy. 2 a pledge or undertaking. 3 an engagement or obligation that restricts freedom of action.

Let me give it a little sales twist by defining "client commitment" : Clients showing dedication to your cause. Make a pledge to give you business. Get into an obligation that prevents them from going to competition.

Just writing that sentence made me feel wishful. Getting a client to say yes, means so much for recognition hungry sales people, one more step towards that magical close. At least in the complex world of software services sales, "closing" often equates to "getting commitment". Of course, the level and the type of commitment would vary depending on where you are in the sales cycle. At the very outset, a commitment to give you a hearing is victory. At the apex, a commitment to pick up a pen and sign on the dotted line is victory. A sale is nothing but the culmination of a series of client commitments -usually of increasing promise to the seller. The specific techniques one would use to gain client commitment would be contextual, but there are some common principles that are a must to get to the magic 'Yes!'.

Show value: Whether it is an introductory call or a formal RFP presentation, never go to a customer meeting without being in a position to offer something of value. I don't mean that a fifty page formal presentation is needed every time. But there should be something you give the customer that would make him want to speak to you again. It could be an alternative perspective on the problem at hand. It could be a case study story of what the competition is doing. It could be an industry analyst's viewpoint on a problem the client is interested in. It could be anything, but the common thread is value. When you ask for commitments without showing value, you make the customer think "He wants to make me buy something that I don't even know will help me. What a looser." When you show value and then ask for small commitments, you make the customer think "He wants to give me more value. Fair enough. What do I have to loose? Let me check this thing out." When customers associate your advances with value, they will become open to commitment.

Build a personal rapport: People like to buy from people they like and that applies regardless of how good your service is or is not. Be a 'smiley', be warm and be ready to look beyond people's titles. A CEO is as human as any of us. Sometimes, especially at the outset, clients will try to rebuff your advances. They still see you as a 'salesman' and not as a human being trying to make a connection with another human being. Relax and keep pushing. Have a few conversation threads ready to go. These topics need to be light, off work, something people would be passionate about and should help you engage at a person to person level. Reading a lot about a wide variety of topics surely helps. The wider your intellectual scope, the more things you will be able to speak about and the better your conversations get, the easier it will be to build rapport.    

Focus on the context and not your expertise: Keep the focus on the needs of the clients, rather than your expertise. It is easy to think that something that your company has pioneered will be of value to the customer. You will have people in your company trying to 'push' a solution on the customer. Push them back. Yell, cajole, coax. Do whatever. But never let anyone reach out to your customers with a "solution" without understanding the context and the needs. When people see that you are genuinely interested in spending time to understand their needs, that you really feel the pain from their perspective, they will be more open to making a commitment.

Keep irritants for the SOW: One of the worst practices in this industry is mixing up proposals and SOW's. Too often SOW's try to sell and proposals try to derisk. De-risking in a sales proposal is like telling your prospective wife about all the things that can go wrong if she marries you and then hope to get a yes. Good luck! There will always be uncertainty and risks in most complex software sales situations. De-risking too early and too explicitly is the fastest way to derail your sales wagon. It will give the impression that you are too conservative, closed, unwilling to work through issues and basically make the whole thing transactional.

Be honest: Be candid about the mistakes your company made in similar situations. Show the customer how your company worked with clients to resolve these issues. This is a huge step towards getting commitment. By being honest you show the customer that you truly understand the deeper issues involved and that you have been there before. By speaking about how you solved these issues, you build client confidence in your ability to deliver despite odds. The client will see you in a different light from the run of the mill salesmen.  

What are your thoughts on getting the client to commit?

Seth blogs about the importance of intagibles- those things that have no numerical value but are priceless- enthusiasm, speed, peer pressure and generosity.

One of the intangibles in selling software services especially within an account (farming as oppossed to hunting) is 'image'. What does the customer think about you? At one end, he can think of you as a thought leader who can be relied on for ideas. At the other end, you might be seen as a great executor who can get things done. He can see you as a flexible partner who understands him and is willing to work through problems patiently. Or does your customer see you as an able and strong willed "Rottweiler" type personality? No one image works for all situations and neither can one be a chameleon, switching colors at the drop of a hat. It is however helpful to know one's natural style and then be prepared to flex depending on the context. You can even choose people in your team who can complement your natural image! Here are my thoughts:

What image works in your situation? I'd love to hear.

Asking questions to a customer can sometimes be daunting. You need to get the customer to like you, but if you don't qualify the lead, sales productivity goes for a toss. Asking questions on decision making authority, budgets and long term plans at the outset can put off some customers. Here are some nice ways to ask the tough questions.


Figuring out the decision making authority:
 - "Besides you, who else would be interested in this solution?" This question is better than the more direct "Who is the decision maker?" question as it gives importance to the person you are taking to while you ask for more details. It also de-personalizes the question by focusing on interest in the solution as opposed to decision making authority itself. The flip side is that the customer might end up giving you a list of names that you might need to sort out.  
- "I would like to give you a comprehensive presentation on our solution and also discuss commercials. Besides you, who else should I invite to the discussion?". Putting commercials into the question would likely get you the name of the person who signs the cheque.

Figuring out budgets:
This is one area where direct questions sometimes are like a complement to the customer. So shoot straight. "How much do you want to spend on the solution?". The "you" is critical as you are putting the customer into centre stage. If you feel awkward, you may want to try this:
-"An online trading portal is a large, multi year initiative for most investment banks I have dealt with and many of them have a staggered budgeting process. Would your budgeting cycle permit a large fixed price quote?" Depending on the answer you can ask further questions to get an idea of the number. The idea is to avoid a direct numbers question. Ask for a range rather than a number. Also make sure the number is the amount they want to spend on services rather than the entire budget.

Urgency of the solution:
This area should always be explored after you have done enough digging on the problem itself. Jumping to the solution timeline without "building up" the problem can backfire. Assuming you have done the groundwork, try something like this:
-"The trading platform is clearly important for your business and will start paying back from day one. We have delivered a similar solution in under twelve months for a large swiss bank. How soon are you looking at a solution going live?" This question reinforces the need, plays back the benefits and builds credibility before popping the timeline.

Asking qualifying questions can be tricky and requires practice. But knowing what questions to ask and how to ask them is a must for sales success.

Dinesh Goel of TPI says "Corporations deciding on a sourcing strategy need to answer the “chicken or the egg” question: what comes first - the fix or the move?" "Fix" here means improve efficiency and effectiveness. "Move" refers to outsourcing. He goes on to propose the following framework for making the decison:
  

It would be interesting to place the fix first /move first dilemma in the context of the larger sourcing problem. What to outsource and what to retain in house is a more fundamental problem. You obviously want your own people to work on the more strategic stuff. But what if your strategic stuff is all messed up and you don't have the skills needed to fix it. You might then opt for a Move (bring in a vendor)-Fix (let him change the model and also empower your people)-Move back(take your baby back and manage it with the newly empowered people) model. In this case you would go in for a transformational partner rather than just someone who can just drive efficiencies. I think of it something like sending your kid to a great boarding school.

To cut a long story short, the whole move-fix/fix-move puzzle needs to be viewed in the larger context of what is strategic to your business, whether your people have the skills needed and what type of a partner to engage to transform the areas that need 'fixing'. Once you have this nailed, you can go on to decide whether to fix first or whether to move first.

Brad Trnavsky drives home the importance of expecting to win in every interaction you have with the customer. "If you are picking up the phone and saying to yourself 'I hope this works out' or 'all these leads suck there is no way I am going to schedule an appointment' guess what??? You WON’T schedule an appointment!"

I can't agree more. Selling is tough especially in these times. The fact is you are likely to loose more interactions than you will win. But you never know at the outset how an interaction will end up. This means you need to play to win every time. That can be hard. Here are some ways to motivate yourself to always play to win.

Make relationships an end in itself: We all focus on building relationships. You can't be in sales in this industry if you don't. But we often end up seeing relationships as a means to an end. 'Let me build a great relationship so that I can get more business'. Sounds great, but you end up building only those relationships that you think will lead to business and the fact is you don't. People get transferred, budgets and priorities change and yes, even the Cowboys can get beaten. Build relationships does not have to be a chore. Guy has a great post on building relationships. Making relationships an end in itself will not only improve your numbers, but also keep you pepped up because you get that 'Yeees!' feeling even when you don't sign an SOW.

Examine your own negative thoughts: Next time you think "This is not going to work. She's not going to give me any business", go a level deeper and ask yourself why exactly you think so. You'll be pleasantly surprised that you often have preconceived notions or mental projections that are holding you back- projections that have little to do with reality on the ground.

Think non linear: Before you condemn an upcoming interaction as a 'waste of time', think of what good can possibly come from the interaction. In what ways besides you immediate goal can you leverage the relationship? This could be work related or it might just be plain fun. But thinking non linear can surely enrich your interaction and make it more fun. That way even when you don't get business you will still be having fun. Catching a football game with a client who cannot give you business is a good example.

Think lifetime value: View the folks you sell to as 'clients' and not as 'customers'. Paul McCord has a great post on the difference. Think of what value you can leverage from the relationship five years from now, ten years from now. Not convinced? If you are age thirty or above, make a list of five people who were your peers when you started your career. See where they are now and how they could have helped you today. The fact is you can never predict the lifetime value of a relationship, but you can rest assured that lifetime value in many of your immediate relationships is immense. Think long term and you won't be flustered or beaten down by short term setbacks. 

Does your customer make you feel like you are Derek Anderson up against the Dallas Cowboy's Defensive line?  Those who watched last week's royal thumping of the Browns would know what I mean.

Delivery is failing-repeatedly. Resourcing is pathetic- universal problem eh? All the "salesy" commitments you made to get the deal are coming back to haunt you. The customer has stopped a payment and the whole world is baying for your blood. What do you do?

Don't react but validate: It's Monday morning and you are getting ready to go to work. Your cell phone rings and it is the customer.
You: "Hi Laks, How are you ?"
Customer: " I can be better. I just got a call from your project manager that he needs one more week to complete the system testing. The worst thing is that he is blaming it on our SME's! You know how much is at stake here? The business will kill me."
You: "Let me explain Laks. Actually, what happened was that John, your SME went on leave and this lead to…"
Customer, cutting in: "This is RIDICULOUS! I am calling the CIO right now".  

What went wrong? You were actually right. The SME did go on leave and the requirements review did not happen. That indeed was the root cause. On top of it, your offshore team has been working weekends. An escalation is an escalation even if it is unfair.

When you get a complaint, especially when it is on the phone. Don't react or explain. First validate the feelings the customer is experiencing and ask for a meeting. This is not the same as agreeing that you are at fault. Saying something like.."I understand what you are saying. The delivery has slipped and this situation is not acceptable. If I were in your place, I would be just as upset. Can we meet first thing in the morning, at say 8 am and talk about this? I want to make sure this is resolved immediately." By validating the customer's feelings and by giving a commitment to solve the problem you are a). Making sure the relationship is intact - at least for now. b). Ensuring that the buck stops with you. c). Have given the emotional customer the psychological air that he so deperately needs at that time. However, if you had stayed the course of pure logic, you could end up winning the argument but spoiling the relationship. 

Meet the customer face to face: Go into the meeting with an attitude that this is "my" problem to solve. Set the tone of the meeting by showing that you are ready to own the problem, no matter what you think is the root cause. You might be a small cog in a billion dollar company. But act like you own the place. Once you have set the right tone with your openess, ask the right questions. Focus the questions on identifying the root of the problem from the customer's perspective - not your perspective. Continue to validate what the customer is feeling. You will see him opening up and becoming more receptive to you. Once you see this happening, ask the questions that will help you find the root cause from your company's perspective. Armed with this information, end the meeting with a promise to come back with a solution.

Do a deep dive: Call a meeting with all the key people from your team. Set the tone that this is a problem that the team needs to own. Ensure that the team understands that while they need to own the problem, the solution can be a joint one with the customer. Before sharing the customer's perspective, ask the team for their own perspective. Don't forget to give them the psychological air that you gave the customer. You might end up uncovering hidden issues and problems. Encourage the team to come up with creative solution options that not only solve the immediate problem, but address the root cause. Ensure that any actions are documented and owned by the project manager and not by anyone else.

Circle back with the customer: Go back and share the solution options with the customer. Always project the solution as a joint one. This is because almost always there is something that the customer can do to help you do your work better. Share your action plan and ask for feedback. Document the actions in a mail and always follow up to check if the actions have had the desired result. 

Note of thanks: Drop a note of thanks to the customer for giving you this chance to improve the service. Ensure that all actions and commitments - on both sides are documented.   

BTW, If you are a Browns fan you can take solace that you have me for company. Let's hope they do something better when they visit the Steelers.