The Best Time To Pitch New Products And Services

It used to be that companies thought about buying hardware and software only when they needed to solve a particular business problem, and that tended to happen at irregular intervals. Solving a business problem is still the reason companies purchase technology, but the process has become more regular thanks to a combination of better planning and the prevalence of support contracts.

The sell cycle starts when you make contact with the potential customer to begin selling your product. The buy cycle starts when the customer begins thinking about its needs. Often, the customer's buy cycle starts considerably sooner than the sell cycle as the customer evaluates possible choices. What's more, the buy cycle is frequently triggered by the life cycle.

For instance, a software application or piece of equipment becomes obsolete, or it's no longer supported by the manufacturer. Every time a customer has to spend money on the product, however, a life cycle event occurs. The most obvious example is when a customer is renewing a maintenance or support contract on hardware or software.

Solution providers that can effectively anticipate would-be customers' buy cycles by knowing their product life cycles have the opportunity to focus more on the people who need their products.

Old Approach, New Spin
At least for vendors, life cycle selling isn't exactly a new strategy. Bill Lundell, an analyst at Enterprise Strategy Group, a Milford, Mass.-based analyst firm, points out that the approach goes back to the days of IBM mainframes, when vendors of IBM-compatible equipment tried to time their product introductions to coincide with the life cycles of IBM products.

Today, life cycle selling is taking on a bigger role in VAR strategy because more and more small and midsize customers--prime VAR territory--are purchasing service contracts and maintenance agreements. This increases the opportunities for cycle-based selling because it provides a fixed point in time when the customer has to lay out more money.

"It has to do with sunk cost," says Mike Colesante, president of Terian Solutions, a backup-service solution provider based in Houston. "The status quo is our biggest competitor. Even though our solution is good, it's not good enough to convince [the customer] that the $7,000 they spent a few weeks ago on a new type of drive should be discarded. But when a pending event happens, they're writing a check for new money."

"These [situations] are very clearly low-hanging fruit," says Eran Farajun, executive vice president at Asigra, a vendor of remote backup products and services. "Anytime there's a change in the maintenance status, whether it's a contract up for renewal or a product that's no longer supported, a door is going to get opened. Salespeople love those sorts of things."

NEXT: The science behind refresh cycles.