Colin W. Kingsbury is the president and co-founder of HRM Direct, a leading SaaS provider of applicant tracking and onboarding systems to mid-sized organizations. Colin brings a lifetime of experience from both in and outside of the software industry, having previously held positions in product management, software engineering, sales, and as a newspaper journalist with expertise in knowledge automation, and has consulted on technology and business practices for Northrop Grumman, Boeing, General Electric, and the US intelligence community. Full Bio
The Seven Habits of Highly-Ineffective Software Buyers
by Colin Kingsbury
To get good at something, it takes practice, and buying software is no different. As a vendor, I’ve had the luxury of watching thousands of customers make a variety of software choices. But while the Web is full of unsolicited advice on how to make good decisions, I’ve noticed a conspicuous lack of information on how to make bad decisions. And since bad decisions are usually easier to make, I thought they deserved an article of their own!
1. Refuse to say who else you’re talking to.
When I ask a customer what other vendors they’re looking at, and they reply, “we’re not disclosing that at this time,” I can hear them thinking, “Ha! That’ll keep him guessing!” And they’re right: It will keep me guessing about what their needs are and whether my product is likely to be a good fit in terms of budget or capabilities. Other buyers think, “If I tell them that, all they’ll do is tell me why the competition stinks” Which they might, and if they do, you can tell them “no thanks.” A good salesperson, representing a good product, will work to draw honest distinctions between her product and the competition’s.
2. Buy the software based on a single demo.
For a long time I was puzzled by customers who would choose a software system to spend the next 2-5 years living with on the basis of a single 45-minute show-and-tell. What I’ve come to think is that many of these buyers appreciate the importance of their choice, but lack confidence in their own ability to make it. It’s no fun shopping for things you feel uncomfortable about, and the natural reaction is to rush into the store, grab the first item that kind of fits, and get out before anyone realizes you don’t belong there. In fact, shopping around is one of the best ways to become educated–and how willing each vendor is to help you now is a leading indicator of the kind of support you’ll get should you choose to buy from them.
3. Make assumptions.
Should you ever catch yourself thinking, “Well, I’m sure this product must be able to do XYZ,” stop and ask the question out loud–the answer may surprise you. Treat every vendor the same, whether they’re the gold-plated market leader or a startup hoping to make you customer #1.
4. Fall in love with a silver bullet.
Over a decade in the software industry has convinced me that the primary market for “exclusive features” is not existing customers, but potential ones. I think it is safe to assume that most of these are either gimmicks of limited utility, or full-chutzpah re-brandings of features everyone else has. This is not to say that all products are the same; rather, that what makes a truly great product is rarely a single “wow” feature but the synthesis of many little ones. Ask yourself how much you’d like the product without that one feature, because that’s probably representative of day-to-day use. And if after all that you still think that feature is essential, ask other vendors on your list what they can offer for that use.
5. Choose based mainly on references.
References aren’t useless. A vendor can usually cough up at least a couple clients to say glowing things. But I strongly believe that clients who focus mainly on vendors with long customer lists in their industry are limiting themselves. Greatness and sustainable competitive advantage come from being more different from your competitors, rather than more similar to them.
6. Compare products using a ruler.
Some buyers place great importance on the length of the feature list, taking it as a proxy for robustness, flexibility, scalability and functionality. If you take five different products that are somewhat well-established in the market, the major differences between them are less likely to be in *what* they do, than in *how* they do it. This is even more true when you consider that most of your usage of the product will likely be in a core set of features which are heavily-covered by most vendors. Put another way, just because two products boast a virtually identical feature set, doesn’t mean you would like them equally.
7. Choose based mainly on price.
There is such a thing as “too expensive;” but there is also such a thing as “too cheap.” There are many ways that software vendors wring out costs, but the two easiest places to cut corners are R&D and client support, neither of which is necessarily good for you as a customer.
Should you find yourself in the position of trying to justify going with a higher-priced vendor, try comparing the cost per user-hour: take the number of users (let’s say 10), the number of hours per day they’ll use the product (4), multiply by the number of working days (240), which gives us 9,600 hours per year. Using that, the cost difference between a product that costs $15,000 per year and $30,000 per year comes out to a whopping $1.56 per user per hour. Another way to look at this is to price the difference in employee-hours based on pay rate. Assuming a full-burden cost of $40 per hour for the team, the $30k package costs 375 man-hours more than the $15k one. With a team of ten people, that works out to just over 9 minutes per person, per day. How many hours of your life have you wasted fighting with software that didn’t want to work the way you wanted it to? By all means take the lower price to your preferred vendor, but make sure to quantify the cost difference for your CFO not just in terms of dollars, but in terms of your most valuable resource: your team’s time.