Tag: Sales

Enterprise SaaS prospects often ask for trials, access to sandbox environments and/or Proof of Concept’s (PoCs). The dogmatic advice is usually to turn these down and push customers toward Annual Recurring Revenue (ARR) contracts. ARR is always the goal, but often there is more nuance than that.

The right answer is ‘it depends’. I think i’ve probably ended up saying yes 15-25% of the time, and about 80% of those have gone on to become long-term ARR customers. Here’s how to assess a PoC opportunities and make them successful.

Where the conventional ‘No PoCs’ advice comes from

PoCs can be costly and ineffective for a number of reasons;

• In Enterprise SaaS, prospects are rarely assessing vendors only on feature set. They get value from Customer Success, Services etc too. A sandbox or light trial doesn’t give an accurate test of vendor capability
• You will want to make a success of any PoC you undertake. This causes distraction for your Account Executives who want to stay close to the deal, and your Customer Success and Services teams asked to make it work
• In Enterprise SaaS, Time to Value can be long – with months or even years needed to see full impact from your software. PoCs are often too short to get to this value
• To get to impact, significant input and change management can be needed across multiple people and teams on the customer’s side. Think about a Fortune 500 company standing up a new employee survey tool. To see impact, they will need to involve Internal Communications and interface with hundreds or thousands of employees, then spend time understanding and acting on the results. Customers are often unwilling to put this effort into something which isn’t seen as permanent, or which they have only minimal buy-in into.

When they work, they work really well

Done right, PoCs can be a powerful tool to help the customer get confident with your impact as a vendor. They can offer a glimpse of what will be possible with a full roll-out of your tool in a short period of time, and can help prospects overcome indecision or risk-aversion.

This happens when you’re doing a PoC for the right reasons, you design it in the right way, and you deliver it well. They also teach you more about how your customer buys and the internal landscape, they can also let you do more discovery ‘on the inside’, let you improve your multi-threading

The ‘last minute’ PoC flip

A PoC ask can come up as early as a first call, or be frustratingly last minute when you felt like you were close to signing.

PoC requests late in a sales process are usually either caused by;

• Having an inaccurate view of all decision makers in a deal, usually caused by a gap in discovery. Your champion has either overstated their purchasing power or just got it wrong, and someone else (usually higher up) has decided a PoC is necessary.
• Having an inaccurate view of where you actually were with your deal. You thought you were close because you thought you were speaking with an economic buyer, but actually you were speaking with a champion. You’d convinced them, but they now need to sell internally.

You can mitigate these issues by improving your discovery and taking a critical approach to defining and testing your Champions and Economic Buyers.

Where you do have an accurate view of the buyer’s internal landscape and the PoC ask comes late in the sales process, it’s usually a bad sign. Most of the time it’s caused by a lowering of the prospect’s conviction level – usually from an internal change in their company. It’s hard to avoid this when it happens, and you’ll need to decide (using the criteria below) what you want to do.

Earlier requests for PoCs

Your first job is to understand the ‘why’ behind the request. Why does the prospect feel that the best next step for their assessment of the impact of your software is to use it for a few days/hours/weeks/months?

Sometimes it’s a good answer, and sometimes it’s a ‘computer says no’ answer that you just have to deal with; “Our CIO has enforced that we can’t purchase any new software without a trial period” or “This RFP dictates that we will undergo a 6 month paid Proof of Concept period with the selected supplier”

Most of the time, there’s a bad answer, like:

• Indecision masking as an ask – “It would be great to play around with it and see if we think it’s a fit” – if you say yes to this, expect the indecision to continue long after the Sandbox access has been granted
• A lack of authority or multi-threaded buy-in masking as an ask – “I’d like to run a trial with my team. If that goes well, we can speak to other areas of the business” –
• A nice way of saying they’re not that interested – “This all looks great – why don’t we start with a trial?”

These are all bad prompts to start a PoC – but good insights and prompts for further discovery and qualification.

Is there another way to solve for their indecision?

There are often better ways to help the prospect through their curiosity, indecision, hesitation, or lack of buy-in from their peers.

• Curiosity about what it ‘really’ looks and feels like: In-depth tailored demos, recorded walk-throughs, mapping their workflows to your tech, etc.
• Wanting to make sure you’re good to work with: Introductions to their would-be delivery team, Customer references, review sites, analyst references
• A lack of buy-in from elsewhere: A robust business case linked to a pre-existing initiative, in the customer’s own language, a digital sales room that can be used to share rationale across the business, more time spent with the customer in (productive) meetings, etc

Checklist for a successful PoC

If you’ve done worked through any objections masking as PoC asks and you genuinely believe that:

1. A PoC is over 75% likely to lead to a multi-year ARR contract
2. The multi-year ARR contract is a big win for your company (measured by size, or logo, or other)
3. There is no other way to get to the ARR contract

Then it might be time for a well-structured PoC. You want as many of the following as possible to be true. Ideal world it’s 100%, realistically, 85%+

• Do you have clear success criteria that can only really be solved with a PoC and have been agreed with the whole buying committee on the customer side?
• Does it align with your current business goals (e.g Traction/ARR Growth/Market expansion/New product learning/Marketing story proof/Use of flashy logos on your website)
• Are you fully multi-threaded, with the full buying team on board? Including Champion, Economic Buyer, User, IT team, Procurement?
• Have you agreed on the structure of a longer term engagement – including price and duration? Better still – can you structure this as a break clause into a longer term contract?
• Is there clear ownership of the success of the PoC from a single person on your team?

Edit/Update: I shared this post with a friend who mentioned that his team use something called a ‘PoC pledge’, which asks prospects to pledge (in a non-contractually binding way) to take certain actions like reviewing terms, kicking off InfoSec and getting the right people in the room. Seems like a neat thing to try.