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Why Vendors Fail in Selling Solution Packages

Image by Pete Linfort from Pixabay

Solution Packages deliver synergies between products and services out of the box and lower adoption barriers for disruptive innovations. They are vital for pushing the innovative offering into the market and directly impact the market share of a Disruptor.

They are commonly underutilized. And here is why.

Mistake #1: Starting with the Product

This is typically the case when the package is initiated by Product Marketing looking from the product over the channel into the market. Incentified to sell more products at higher margins, product managers tend to search for complementary products and services to fill gaps of their own offering, e.g., a vertical niche data exchange standard or an extension to meet local compliance requirements. Including them in an offering helps to tick boxes with analysts, but doesn’t necessarily improve the value proposition for the customer.

Mistake #2: Starting with the Competition

This is often the case when the package is triggered by Marketing trying to check boxes for features where the competition currently has an advantage. While the Solution Package then includes more components at lower total cost of ownership it doesn’t necessarily translate into a better risk/reward perception by customers.

Mistake #3: Starting with Finance

Often Solution Packages are built with the intent to increase the vendor’s margin by obfuscating pricing of the individual components, e.g., including professional services or a free-of-charge consumption level. This only works if the total bundle drives a competitive value proposition for the customer. Getting products or services included in a package the customer has no need for will not drive adoption.

Mistake #4: Starting with Sales

Another common mistake is building Solution Packages to drive sales volume while avoiding aggressive discounting. Worst case the customer is oversold and after a while realizes they don’t utilize the Solution Package to a larger extent. This will likely backfire in later negotiation rounds when customers demand to take components of the package back for placing a renewal.

Mistake #5: Silo Organization

Defining, positioning and selling Solution Packages requires intensive collaboration between Product Marketing, Marketing, Sales, and Partner Management. Whenever these functions are established as silos, building Solution Packages is overly complex, takes a lot of time and effort, and often fails to resonate with customers.

What Great Solution Packages Looks Like

Building a Solution Package must directly support the corporate strategy for building market power in a defined Target Market Segment (TMS). It must lower adoption barriers for customers within the TMS to accelerate market penetration.

For this the offering must increase the value and/or lower the risk buyers expect from implementing the Solution Package. Every single component added to the standard offering must positively impact one of these two Buying Decision Influences.

The value must be measurable as a positive impact on the business case, e.g., revenue growth, cost reduction, margin improvement. The risk drivers must be identified and their mitigation defined, e.g., the risk stemming from the integration of the offering into customers’ existing environment via interfaces, APIs or shared data.

The sales team owning the TMS must accept ownership for positioning and promoting the Solution Package. For this they must be trained and appropriate sales incentives must be defined. These sales incentives must drive long-term thinking instead of short-term revenue impact. Sales must clearly understand how selling the Solution Package instead of standard offerings will improve their position in the TMS and within individual strategic accounts and thus drive long-term growth.

Last but not least, partners contributing to the Solution Package must be educated, the joint sales motion must be defined, and they must perceive an intrinsic value for their own business to drive commitment.


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