Bill Gates has a lot to answer for. Every office computer has a spreadsheet application on it. Any task involving numbers is done on a spreadsheet.
Selling contact center technology, I am frequently told, “No problem, they’re only using spreadsheets.”
A professional colleague told me that when people replace existing technology, either they are looking for a solution that does more for the same price that they are already paying, or for something that does the same as their current solution, but for a lower price.
Since everybody’s computer already has a spreadsheet application on it, they see it as a zero-cost application.
How do you compete against a zero-cost application?
Know Your Enemy
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Sun Tzu wrote: “If you know the enemy and you know yourself, you need not fear the result of 100 battles.”
Now we’ve identified spreadsheets as our “enemy,” what are their strengths and what are their weaknesses?
The Strengths Of Spreadsheets
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Their greatest strength is that they are essentially free. Even if a company does buy your solution, they are not going to give up their spreadsheet licenses. They use spreadsheets for so many other parts of the business, so there is no saving by adopting your product.
Spreadsheets are the legacy solution. People have designed and amended their files over the years to meet their needs exactly. People feel as comfortable using spreadsheets as they would wearing their favorite pair of slippers.
The final strength of spreadsheets is their flexibility. The average Excel user regularly uses about 5% of its full functionality. Spreadsheets’ formulae address all aspects of mathematics and contain many tools for analyzing and processing data. Most software cannot emulate all the different functions that spreadsheets have to offer.
The Holes In The Spreadsheets’ Armor
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Spreadsheets were originally designed to make calculations and save them in files. These calculations could be shared by sharing the file.
More than one person can work on a spreadsheet at the same time, but it has its challenges. The key challenge is that the number of users working on a spreadsheet at any one time is limited for practical purposes, to two or three. If you create a database table in Excel, it’s not possible to have 100 users making real-time changes to it simultaneously.
Security is another headache. Spreadsheets can be password protected, but that password protection cannot be integrated into an identity and access management (IAM) tool. The password is unique to the spreadsheet and not to the user If 100 users use the same spreadsheet, then 100 users know the same password. Alternatively, each user can use their own spreadsheet and then regularly merge the files. This requires a lot of manual work, which is prone to error.
Automation is possible within spreadsheets, but it’s complicated. Not many people know how to write macros in VBA. If your product has a functionality that would need a macro to replicate it, then it’s unlikely that your customer’s organization will have someone who can write that macro. On the other hand, if your customer’s spreadsheets use macros to perform certain functions, it’s pretty unlikely that your product will perform the same function as the macro. I have often worked with customers using spreadsheets with macros. When I ask how they work, they will tell me that the person who wrote the spreadsheet has moved on. No one in their company knows how it works, but they have to keep using it.
Replacing Spreadsheets — Including The Value In (Return On Investments) ROI Calculations
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As discussed, people look for solutions that do more for the same price that they are already paying, or for solutions that do the same as their current solutions, but for a lower price.
The trick is to understand what are the units of work being done on the spreadsheet and to attribute a financial value to them based on the manual labor. This is usually based on the time it takes to do the work. If you can show that your product can do the same units of work in a shorter period of time, or with the reduced attention of a human worker, then you can estimate a cost saving.
This manual work can include the costs of someone checking the work, and also the costs of rework to rectify mistakes.
The second way to calculate the ROI is to look at the consequences of non-compliance. Keeping customer data on a spreadsheet is not very secure for the reasons mentioned above. It is likely to violate data protection laws. You can also factor the likely penalties, fines, and legal costs into the ROI.
The wrap-up
If you’re selling to small and medium-sized customers, spreadsheets can be a fearsome incumbent to beat. You need to reveal the effect of the spreadsheet’s weaknesses on the business while being ready to handle objections based on the spreadsheet’s strengths.
Are you competing against spreadsheets? Why are your customers considering replacing them? How are spreadsheets holding them back? What do they hope that your product can do that spreadsheets can’t? How does the value your product creates compare to the value spreadsheets generate?
A software company is an organization that specializes in creating solutions that solve everyday challenges. Some software companies focus on consumer needs, such as creating a mobile app to enable remote banking, like depositing a check from home on your mobile device. Other software companies focus on creating critical business efficiencies, such as streamlining the flow of data and communications between medical professionals, clinicians, doctors, and other staff to ensure they have up-to-the-minute patient details in order to provide the best health care possible.
Both examples have one thing in common: they specialize in creating solutions that solve a customer need or significant pain point. To be successful, the software product must continue to deliver enough customer value, so users and businesses are willing to continue using it or paying for it.
As a company matures, product adoption increases, and new challenges arise. Sometimes the typical growing pains divert focus off creating customer value, which can erode customer loyalty. Unfortunately, most individuals don't understand the impact their current decisions have on their long-term sustainability. Are you unknowingly harming the future success of your software organization?
If software was easy, everyone would do it. There are many things that must be done right to achieve success, but nothing is more important than making sure you meet your customers' most pressing needs.
Happy customers make loyal customers, and when their happiness leads to referrals, your consumer basically loves your product so much that they voluntarily join your marketing team to convince others of your value. Ultimately, customer loyalty generates more revenue and more revenue creates sustainable growth.
If you continually make choices that put your customers' needs on the backburner, you are knowingly or unknowingly putting too much emphasis on today and sacrificing your future success and sustainability.
Just because the road to success is challenging doesn't mean you should give up and walk away. Have faith. Anything worth doing is worth doing right. Loyalty requires daily care and feeding. So, SECURE your future success with a plan that creates and maintains focus on customer value and customer loyalty.
Before we talk about how to SECURE your future success, let's take a look at a few of the basic requirements necessary to operate a software company.
Running a successful software organization can feel like a juggling act spinning out of control. No problem, right? You just need to be successful at the following and then some:
Find an underserved market you are passionate about
Create a solution that resonates with your audience and delivers value customers are willing to pay for
Build a technical foundation that supports the future, at the right price to remain competitive
Hire engineers that write quality, clean, reusable code
Adopt lean and agile methodologies to deliver meaningful changes to your market quickly, with top quality, at a low cost
Make your software so easy to use, it requires no documentation
Create simple, easy to use, elegant user experiences
Hire talented product managers (conductors) to lead the software orchestra, unifying the musicians together in such a way that they share a meaningful emotion with the audience
Stay relevant, create loyalty, and promote additional purchases
Capture qualitative and quantitative engagement metrics to understand product usage
Adhere to compliance and regulations to protect end-user data
Get along with everyone, internally and externally
Don't build up mountains of technical debt
Know when, where, and how much to invest and know when to STOP investing
Oh, and you need to generate revenue and sustainable growth
With such a large list of responsibilities, you can understand how one or two things could slip through the cracks and suddenly you find yourself lost in the weeds, completely distracted from your most important job: attending to customer needs.
Unfortunately, if any of these fundamental requirements go unnoticed for a prolonged period of time, the oversight can impact your future in a very damaging way. It may be time to slow down, reflect on things you can do now to pave the way to a SECURE future.
Take a moment to get yourself back on track with the right mindset focused on customer value and customer loyalty.
Start Off On The Right Foot
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Start off on the right foot. Define your company aspirations, the market you will serve, how you can win, and what makes your product "the best." Define everything that must be in place (systems, features, non-functional attributes) to achieve success. Make a commitment to remain customer obsessed. Share this vision with your tribe so it becomes a religion.
I recommend reading this WSJ bestselling book on strategy, "Playing to Win" by A.G. Lafley and Roger L. Martin (Harvard Business Review Press). While strategy isn't complex, it can be very hard, and this book helps organizations and people make hard choices about their future in order to win. To find out more about Playing to win, visit here Playing To Win Strategy.
Ensure Your Product Management Team Is Structured For Success
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Ensure your product management team is structured for success. A professional product management organization should have a training curriculum, and implement and iterate product, people, and process best practices. A healthy culture will encourage a growth mindset, embrace continual improvement, and foster a culture where failure is a chance to become great.
According to a Product Management Skills Benchmark Report conducted by the 280 Group, on average product managers who work for an organization with a formal product management process possess a 26% higher skill set. The same study shows that product managers with a formal training process have on average 11% more skills, with some as high as 17% compared to organizations without a formal training process. Visit here, Product Management Skills – Benchmark Report to compare your skills to other product managers worldwide.
By investing in your people, you build a stronger team which is the fuel needed to drive future success.
Continually Assess Whether You Are Producing A Quality Product
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Continually assess whether you are producing a quality product. Poor quality will destroy your reputation, lose trust within your organization and customer base, overburden your customer success team, and challenge your ability to close new business.
Fixing bugs, rolling back software, and re-writing code is extremely expensive and prevents you from investing in innovation and from creating solutions that delight customers. It's no different than a builder coming back repeatedly to fix a poor-quality home improvement job. If the job was done right the first time, the builder could focus his time on new value generating projects.
Lost time is lost money, and the additional material costs required to fix quality issues make the situation even more profound. You need quality products and continued innovation to create and sustain customer satisfaction.
So, don't install windows that leak, or proclaim a kitchen without a sink is a completed project. Your customer deserves better and delivering high quality solutions will make more funds available for your innovation budget to help secure a profitable future. Check out my LinkedIn article "We need to be more like Arnie", a tale about how customer value and quality leads to loyalty.
Understand How Implementing Metrics Across The Entire Product Lifecycle Can Become Your Guiding Light
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Understand how implementing metrics across the entire Product Lifecycle can become your guiding light. Implementation of a North Star Metric or OKRs (objectives and key results) help remind your organization about the market problems your product solves and the revenue your organization plans to generate from your solution.
When an organization has cross-functional goal alignment and utilizes metrics to hold everyone accountable, they now have a barometer to gauge success. Most importantly, by continually checking your progress related to quality, investment choices, user engagement, and revenue, you can detect flaws in your hypothesis, and make the necessary course corrections. A revised plan helps redirect your efforts so you can deliver value to your consumer, increase loyalty and sustainable growth.
Run Your Organization With The Grit And Grace To Know When To Stop Investing In Products That No Longer Serve Your Market And Your Bottom Line
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Run your organization with the grit and grace to know when to stop investing in products that no longer serve your market and your bottom line. If you are emotionally attached to the products because they drove your past success, it will hamper your ability to recognize when it's time to "End of Life" or dramatically decrease the investment to optimize the business.
To remain relevant in the future, you must optimize your current core business, walk away from products, concepts, and processes that inhibit growth, and shift investments into ideas and products that will create sustainable growth.
More simply stated, "Create the Future, Forget the Past, and Manage the Present" as described in one of my favorite books on innovation, "The Three Box Solution", by Vijay Govindarajan (Harvard Business Review Press). To view the book, visit here The Three Box Solution
Embrace A Culture That Promotes Creating Customer Value Over Revenue Extraction
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Embrace a culture that promotes creating customer value over revenue extraction. If you create products with a delightful user experience that satisfy the customers' biggest pain points, you are on the right track to building customer loyalty. Loyalty leads to additional purchases and recommendations, which creates revenue and sustainable growth.
There is tremendous pressure to extract as much out of the business as possible, but when that prevents you from delivering value to your customers, then you sacrifice long-term success for short-term revenue gains.
Customers have a choice and can terminate their relationship with you if they no longer receive value from your products and services. Why spend money acquiring customers to replenish those that fell out the bottom only to get you back to where you started? Worse yet, you lost the opportunity to invest in value-creating innovation, because those funds shifted to reacquisition efforts.
Invest wisely, create value and you won't waste time and money trying to plug the hole in the bottom of the boat.
Success doesn't come easy, but if you remain diligent about generating customer value, with a goal to generate customer loyalty, your investments will be directed to the things that drive revenue and growth.
Remember, you have a choice: invest today in your customer and their most critical needs, or spend money later cleaning up bad quality, mounds of technical debt, and reacquisition costs.
The choice is relatively simple. To further support your success, create and continually improve best practices around people, products, and processes. If you sponsor a culture that values input from wise-eyes and fresh-eyes, and use data as your guiding light, you will increase your odds of winning now and into the future.
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