A foundation for software revenue acceleration

Posted: May 29, 2011 2:09 PM EST. Filed under: channel marketing, communications, product management, product marketing, sales

In our previous blogpost we discussed how ERP-vendor Navision in its early years managed to achieve significant software revenue acceleration.

Due to the short format, we skipped a couple of background items that we’ll pick up in this and following posts. First of all, it’s evident that the software developer was in pretty good synch with the market. They used experience through their existing sales channel to gain feedback with requests for new functionality – and they used incredible sharpness in translating that into product functionality.

Although the tiny developer didn’t have a PM function per se, the North-to-West flow from the Sales box in our figure, through Product Management & Marketing, to Development worked very well. Any given company might not have all the boxes in our figure as real or conscious functions. But that doesn’t mean that those functions are not being performed – at some level.

What IBM then did very well in this model was to take the product and through a product marketing function, create the communication that the sales channel could use to explain the product’s benefits to the market. In terms of our model, that’s West to East, followed by East to North – both via Product Management & Marketing in the middle.

In our experience, these last two steps are where most software companies fail.

“The usual method” is more like: “Great, our product is ready, let’s hire some salespeople.” This method not only skips the communications part of it – it usually attempts to go straight from Development to Sales, bypassing Product Management & Marketing in its entirety. And the expected sales never materialize, or if they do, it’s through a painfully slow process.

Such attempts to short-circuit the marketing and communications process are responsible for thousands of derailed sales careers, and probably thousands of soured angel and venture capital relations. So why do software developers, and investors for that matter, so often skip such vital steps?

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