Case Study:
Reversing Declining Revenue by Revitalizing Sales & Marketing

Fortran*, a developer of specialized software products had experienced steady growth during the ten years since the two founders left their engineering jobs to develop a revolutionary new product. Fortran’s products were used by giant industry and government customers as well as midsize consulting companies. After gaining a significant position in their target market, they decided to develop marketing programs, hire professional sales reps, and add international distributors to expand their business.

The Challenge

Then came the big surprise - a significant drop in new software license sales followed by the resignation of part of their sales team. With the drop in new sales came a significant shift, from pleasantly profitable to uncomfortably losing money.

After being called in to help solve this serious problem, our first step was to review the entire sales & marketing process. Our initial conclusions were:

  1. Poor expansion of usage in large customers
  2. Very poor conversion of prospects to customers
  3. Overly dependent on economic health of one industry vertical
  4. Sales team improperly trained
  5. Pricing and discounting model part of the profitability problem
  6. International distributors were not proactive
  7. Company focus on product brilliance versus value to customer

The Solution

Determining that solving problems 1 through 4 would have the most effect, especially in the short term, we explored each problem in more depth and began implementing solutions.

1. Poor expansion of usage in large customers

While Fortran could list an impressive collection of giant industry and government customers, the usage rate of their product within those large customers was very, very low.

The solution was to identify influential users in major customers and have them sponsor a free training seminar for their department. In addition to training new potential users, Fortran staff demonstrated specific problems that could be solved by their product. These demonstrations sparked interest in using the product in new ways and resulted in significant new projects for Fortran.

2. Very poor conversion of prospects to customers

Basic lead generation was acceptable in that a substantial number of potential customers were downloading a 30-day free trial copy of the program. Unfortunately, the conversion rate of prospects actually buying the product was essentially zero.

The solution involved:

  • Ensuring prospects regularly received communications highlighting how other customers were solving specific problems with the product
  • Sales reps trained to understand the problems customers were trying to solve rather than just understanding Fortran’s product
  • Early contact by the sales rep early in the 30-day free trial period to qualify interest and invite them to a web based seminar
  • For highly qualified significant prospects, a custom demonstration was provided

3. Overly dependent on economic health of one industry vertical

All major customers were in the same vertical industry sector that was prone to significant economic fluctuation. By analyzing customer and prospect data, we were able to identify additional industry verticals that could utilize Fortran’s product without significant technical additions. Selecting potential companies, we initiated a “partnership discussion” wherein the partner would assist us in identifying key needs for each market.

4. Sales team improperly trained

The sales process had been for the sales rep to contact each prospect near the end of the 30-day free trial period and ask if they were ready to buy. The sales team had limited knowledge of the product and no knowledge of the type of problems that customers were trying to solve with their product. The solution included development programs to have the sales reps:

  • Understand typical customer problems
  • Ask intelligent questions about problems to help qualify customer needs
  • Become proficient at winning larger complex sales
  • Understand how to use technical people as part of a team selling effort

The Result

  • For new licenses, successfully reversing an annual 25% decline, sales increased by 35% over a two year period
  • Annual revenue increased by 15% even though the largest customer (due to turmoil in their industry) dropped to number four on the list of major customers.
  • Usage at targeted major customers went up by a factor of 200%.
  • Fortran received the largest contract in their history.
  • From the training, new teamwork approaches, and increased focus, the sales staff improved their productivity significantly thereby postponing a need to invest in more staff.
  • A major multinational corporation became the new partner to assist in creating a new major vertical market with very healthy economic growth
  • A significant reseller was selected to be the lead partner for an embedded version of the product sold to additional key market verticals

 

 

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