How Not To Be A Stupid Vendor

I haven’t talked about the technology aspect of personalization yet. Having had some high-profile clients, and having worked for some high-profile companies, my voice mail is flooded with tech vendors trying to sell me their wares. Over the last few years, I compiled a list of do’s and don’ts for a speech I’ll one day write called, “How Not To Be A Stupid Vendor.” Because so many readers of this column are vendors, I thought I’d write a column to help them understand how to approach potential clients. For those of you who aren’t vendors, I’m sure your experiences mirror mine. I hope this column will be a service to us all in stopping vendor spam and wasted meetings!

A phrase I often use in my consulting practice is “Pose the problem. Find the solution.” Most software companies think if they build a solution or a cool algorithm, companies will buy it. Unless they really understand the problems their software is supposed to be solving, the “solution” won’t help in the real world.

Understand your prospects’ problems

A couple years ago, representatives of a company came into my office and told me they’d spent the last year and a half developing a huge national network of computers (this even involved satellites). The network would be able to accurately pinpoint an anonymous browser’s zip code when a user visited my client’s Web site. The entire meeting revolved around their network, the PhD’s on their staff and the expense that went into building their infrastructure. Not once did they discuss what problem the product solved. They didn’t know much about my client’s business, the value (or lack of value) of knowing someone’s zip code, or the fact my client had no data relative to zip code that could possibly enrich its users’ experience. Another point they didn’t consider was how willing people are to simply tell you their zip code if there’s a benefit to it. I have no problem giving OfficeDepot my zip code because I know the company will give me real-time inventory for the stores nearby. Would it be cool if the Web site “guessed” my zip code without asking? I suppose so. Is that quasi-interesting feature (fraught with privacy concerns) worth over $10,000 a month in vendor fees? Nope.

This isn’t to say the zip code company doesn’t provide an interesting service. I can imagine companies that might pay top dollar for that technology. Wireless companies providing location-based information would find it useful. Capabilities already built into wireless networks to take care of that, however. Emergency systems (like OnStar or LoJack) might find a use for that technology. I don’t know if these types of companies were on the vendor’s radar, but I doubt it. They spent millions creating their infrastructure before understanding the business needs of the companies whose problems they wanted to solve.

Understand your prospects’ business model

A community vendor came into my office one day. He wanted one of my clients to implement his company’s solutions. I must say, the idea was cool, the user interface was very attractive, and I liked the company. There was one thing that really set me off. The entire product was based around the idea of an ad revenue share (remember those days?). The vendor really thought it out, too. There were cross-advertising opportunities built into the product. A back-end reporting system made auditing and tracking revenue share easy. I was impressed. There was one major problem: my client’s site didn’t have advertising and didn’t intend to use advertising as a source of revenue. Oops. At the end of the hour-long meeting, I said, “Are you aware the site doesn’t have any external advertisers, and that advertising isn’t one of my client’s revenue streams?” That pretty much stopped the conversation. If the vendor had thought about simply charging my client monthly, or figured out another payment schedule, all would have gone well. But the sales guy was unprepared to think about how his company’s revenue stream could be diversified to work with my client.

Will the Smart Vendor please stand up?

There are smart vendors out there. When a vendor really takes the time to understand my clients’ needs, their revenue streams, and researches their technical infrastructure before meeting with us, I appreciate it. Even if a good vendor’s solution doesn’t fit our needs, I’ll take the time to talk with the reps about why their solution fell short, and share ideas I may have about different directions they could take.

With stupid vendors, I just show them the door — and let Darwin take care of the rest.

Until next time,
Jack