10 Lessons About SOFTWARE SALES You Need To Learn To Succeed

1. Selling to Your Existing Customers Will Make You More Money

The best leads are your existing customers. They already know you, like you, and trust you. Chances are they wouldn't have become a customer if they felt any different about any of these things in the first place.

Your marketing should be designed to find more potential customers like your current customers and to drive them through the sales funnel.

2. Prospects Will Lie To You

There's a school of thought that says you should "believe nothing you hear and only half of what you see". When it comes to finding new customers, this is as true as it gets. If your potential customer would truly be better off buying your product, they wouldn't be wasting your time. You need to think long-term - or even move on to someone else.

3. Your Sales Funnel Is Broken

No prospect is going to magically appear at the bottom of your sales funnel ready to buy. Many will enter it but very few will make it all the way through.

Your sales funnel is only as good as your weakest point of contact with a prospect. If it's your marketing, you need to find more qualified leads. If it's too high a price, you need to lower it or deliver more value up front to justify that price tag. Either way, the solution is rarely easy and it most certainly isn't quick.

4. Your Best Customers Are Generally Not Your Highest-Paying Ones

Your best customers are your most profitable ones. They're the ones that come back time and again, refer others to you, and who evangelize you without prompting. However, your highest-paying customers will often be those who look at your price tag and walk away without so much as a second look.

It may seem counterintuitive, but the fact is that your best customers simply won't cost you as much money to acquire and they'll have more value to you once they're convinced of what you have to offer. Don't confuse "best" with "highest-paying", as that will result in a lot of wasted effort and lost money.

5. Getting Your Software Deployed Is The Most Difficult Part

Getting your software deployed is often the longest and most difficult part of the customer engagement cycle. It takes months to convince prospects to actually buy something, which means you'll need an even larger pipeline than you previously thought.

Once you've gotten as far as having a contract signed and options selected, that's when things start to get really hairy. You may think the real work is over now that they're using your product, but you would be very wrong. Just because you built something doesn't mean anyone else knows how to use it and so problems will arise.

6. Bad Software Deployments Are Very Expensive

You may need to let go of some of the functionality you wanted in order to get it deployed by an appropriate deadline, otherwise your engineering team can spend weeks making last minute updates and scrambling to meet unreasonable demands without falling behind on other projects. Some features will never be used at all.

The former costs time and money while the latter results in an unfulfilled customer who is likely to churn. The best bet is to build what they need when they need it, even if that's months down the line (so long as you keep them updated on your progress).

7. Your Sales & Marketing Budgets Must Be Proportionate To The Size Of Your Paying Customer Base

Your sales and marketing efforts must be proportionate to the size of your paying customer base. If most of your recurring revenue comes from a few customers, you can't just sign up two or three new ones every month - they're not going to pay for all that extra overhead.

If you're spending $1,000 per month on sales and marketing to get just one paying customer, you need to find a serious revenue model overhaul. Grow your subscriber list by selling to more people at a lower price point or selling upmarket by providing higher-value services for your current customers.

8. Your Vision Determines Your Success Or Failure

Your vision for your software company will determine your success or failure, nothing else. If you can't see where you're going, how will anyone know where to go with you?

You need a strong sense of what it is that makes your software company unique and provide ample evidence to back up why it's necessary to have. People won't care how great you think your product is until they understand why it's so much better than everything else already out there.

9. You Can't Build A Software Company On The Back Of One Product

You can't build a software company on the back of one product alone, no matter how successful it is. There are too many things that can go wrong, so you need to hedge your bets.

You don't want all of your eggs in one basket - focus on building up complementary products that work well with each other. While it's great to have a constant stream of revenue coming in from the software you already have, that money comes at the cost of future development and support.

10. Marketing Is A Long-Term Investment

Marketing is a long-term investment that takes months to really start paying dividends. You can't expect it to work overnight, otherwise you won't know what works and what doesn't. It's something that needs to be done repeatedly without fail before it starts working with the same efficacy again in the future.

Perfection takes time to develop, don't expect it overnight. It's not something you can do once and be done with - it's something that must constantly evolve in order to maintain any sense of success. You won't know exactly what works until after you've tried it, so make sure you keep your eyes open at all times.

Bonus: You Will Make A Lot Of Bad Decisions, Learn From Them

You will make a lot of bad decisions in your life, that's just the nature of trying new things and experimenting with anything worthwhile. Perhaps you've wasted time on some features or marketing channels while others have paid off handsomely for months at a time.

Even so, you need to know which of your efforts have been successful and what hasn't. That means you should build a good analytics system in-house or hire someone to help you figure out where customer acquisition is coming from, where retention happens, etc.

Those are the 10 things I wish I knew when I first started my software company. If you've got anything to add, feel free to post them in the comments section below. I'd love to hear what you think, along with any personal experiences you've had which helped shape the way you currently look at software companies.

We can all learn from each other's mistakes, so don't be afraid to share yours. After all, it's the only way to learn from them in future.