B2B Software Publishers: Your Customer Pays You, but They’re Killing You
This is a trap into which many B2B software publishers fall: you sign a contract with a “big” client—that major corporation whose flood of money is synonymous with success. You intend to listen to their needs and wishes and co-develop the product with them, but you’re afraid of losing them. Soon, the suggestions they make are treated as demands, because if you don’t comply, you risk losing them. So, before long, the client themselves expects you to meet their demands, and—far from the software publisher you wanted to be—you find yourself acting as a “custom” integrator.
Your company thus becomes a design firm, an ESN (formerly an IT services company), in other words, a company driven by sales rather than by the product. Moreover, your company talks about “projects” (something ephemeral, with no book value) and less and less about “product” (a company asset). The product is presented to prospects as infinitely versatile and becomes a hundred-headed hydra, full of client-specific code or falsely generic code (meaning: generic, but in fact written for a single client). On the contrary, you want to—and must—build your product on a strong vision and clear principles; that’s why people will come to you.
B2C software publishers aren’t exposed to this risk, since they target a large number of customers from the outset. They’re familiar only with marketing, market segments, and personas—but not with the names or business names of their individual customers. A B2B software vendor, on the other hand, will rely more heavily on the sales function, the concepts of leads and prospects, right up to the signing of the contract—which may even lead them to pop open a bottle of champagne.
To avoid this pitfall, you must have a strong product—by which I mean your company must be a thought leader in its field. Your product must reflect state-of-the-art practices, even if it means your customers have to adapt their processes to align with those underlying your software.
Example: Suppose you’re selling accounting software, a highly regulated field. For the small business that manufactures and sells delicious canned fish, accounting is obviously not its core business. If, when choosing off-the-shelf accounting software, this small business finds that your tool doesn’t track inventory the way it wants to, it should probably ask itself some questions—because accounting is your business, not theirs. Obvious, you might say.
The corollary is that you must learn to say “no” to certain requests from your clients, because you know your business better than they do. And you must accept that by saying “no,” you’re turning down certain sales—sales that wouldn’t have served you well. Fundamentally, this is therefore a matter of business financing: to be able to say “no” to certain clients, you must have adequate funding.
In this regard, a content strategy can help: regularly publishing high-quality editorial content about your industry helps “educate” your customers and position you as an authority. More than the software you sell, it is the expertise your company possesses that you highlight. Your readers will naturally conclude that this expertise is reflected in the product you sell.