Ask HN: How to become a technical sales engineer?
So I really enjoy explaining complicated technical products in terms a customer can understand, having done so through my own SaaS projects, I've also worked as a developer before.
I'm very much attracted by technical sales engineer position, how can I land myself that role ?
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[ 10.6 ms ] story [ 1720 ms ] threadhttps://sysadmincasts.com/
So how did it lead you to a sales engineering role or other opportunities? Do you ever mention it in your interviews or resume? How do you explain how it demonstrates your abilities for sales engineering roles?
Did you create the screencasts just to build a portfolio or do you have a general interest in this area?
You should upload it on youtube and monetize it as well (but I've not done this but seen other people uploading screencasts on there with success).
A lot of companies have trouble filling sales roles, and adding your technical expertise is a huge advantage. I'd imagine any smart hiring manager would at least talk to you.
I've been considering an entry level sales job to fill that gap before thinking about this role, but is that not necessary? Could it be possible to go into this role directly with only an engineering and some entrepreneurship experience?
well my email is john@appsonify.com if anyone wants to talk.
Entrepreneurship is sales experience. In fact, it's the best kind.
Lots of people can develop a product, but getting people to use it (and pay for it!) is really hard and requires sales skills. It's even harder when no one has ever used the product before, and you don't have the benefit of a big brand or glowing testimonials.
Someone with your skills and a passion for sales will be a lifeline to many companies. If you don't end up as a Sales Engineer, you could also be on an implementation team (meaning like a customer advocate, not like IT implementation). There are lots of things you could do.
You need to be competent in the technology niche that you wish to work in.
You need to be interested in understanding the problems people are trying to solve, including the business, cultural, political and legacy technology background for those problems.
Having done that, you then architect the "solution" and present it.
Typically the client wants to pay far less, wants it much sooner and throws in a bunch of new constraints. So you go back and re-architect, repeat. A fast sales cycle is 6-9 months some can be multiple years and the technology moves along as they dither.
It helps to have client-side experience before crossing over to the vendor-side.
I start by attending industry trade shows and other industry specific events (i.e., conferences). Typically the upper management of these companies (VPs and Project Executives) attend these events since some of the events are in the day time and regular people have to work at that time. These events are great for networking and gathering new clients because the people who you meet are either the decision-maker or they can quickly introduce you to the decision-maker in their organization. One thing that I learned from selling to companies is that you should start as high up the organization as possible. A new employee or some in middle management is much less likely to pass your message along to their boss.
The most difficult part of enterprise sales is setting the right price. Typically enterprise software does one of two things. It either (1) increases revenue or (2) decreases cost. For both situation you need to quantify the client's current process - what they are doing now without your software. I typically measure labor hour saving per year per employee or new revenue generating potential per year. Then I calculate the new condition if the client were to use my software. The difference between the current condition and the new condition is the amount of value that the software is creating for the client. And finally, the price that I charge them should be a percentage of the new value that has been created. The price also needs to be high enough to cover all the cost (sales, development, marketing, and operations) and profit(20% to 60%).
Basically: If (Price < Value_Created && Price > Cost + Required_Profit){ Deal} else {No Deal}
What I have found is that most software engineers under price their products. An engineer might think along the following lines: "It costs me about $1000 to host my servers on AWS per year. If I charge $5000 then I would be highly profitable."
The problem with this way of thinking is that the person does not consider the value that they are adding to the client. The client doesn't really care about how much it cost you to build your product. They only care about the value that you can add them.
I can go on further if anyone is interested or have any questions.
What percentage do you charge of the value provided by the software? In my case, I save a company $100,000 worth of labor, what portion of that value is fair to take, and at what portion does it no longer make sense to purchase (obviously if it's 90% of that you are charging, it becomes too expensive for little gain)?
I'm sure you have competitors in this niche, how do you make sure that your prices are competitive?
Would love to talk to you more about this if you don't mind and get your personal opinion on my software (can you email me at john@appsonify.com), and how to price it properly.
My biggest and most expensive lesson I learned this year so far is that you must target decision makers with budget and people with the right long term fit.
So the million dollar question becomes, how to find these golden nuggets. Is there any other way besides going to conferences? Although I would love to hear more on the specifics of what worked for you and what didn't. How do you pitch your product without coming across as an annoying door to door sales guy?
Please, I encourage you to continue writing more about your experience in this domain, would also love to personally talk to you via email.
The exact way to price software is a bit more complicated than what I described in the earlier post so I am going to explain in greater detail. You always want to start by evaluating the value added of your product because this creates and anchoring effect to that number, raises their willingness to buy (After all everyone wants a great deal), and creates a sense of urgency (now that they know how much they can save, they want to do it right away). The higher the value added number the better the anchoring effect. By starting the anchor at a high number, the client might will still be happy to pay for the percentage of value that you demand even if it might seem absurdly high from a different perspective. Remember that selling is highly based on psychology and unlike physics, psychology is not path independent. The way that you frame the conversation and the path that you take can make a big difference.
Keep in mind that this only works if both you and the client agree on the methodology and the result of assess value. For best results, you want to have the client do some of the work on assessing the value that way they are "part" of the process. I generally just ask some questions to the client and subtly guide them through this process.
In terms of what you can charge for the software, you have to also consider the organizational dynamics and their current expectations. For example, if the software can save a company $100 million per year and is rather simple it may be difficult for the purchasing agent to part with $10 million per year even though that is legitimately only a portion of the value delivered. In this situation, the upper bound is based on how much the organization can stomach. So in this case, I might be able to get away with $1 million per year (just a hypothetical example) after showing them that this is only 1% of the total value that they are getting.
Another thing to consider about software these days is the cost that the company might incur by building their own custom solution. I usually raise this up if the bill for the software is around $100k to $500k. My talking point here is that since it would cost them ~$200K per developer and they would need to full-time Project manager and a part-time designer, it would be cheaper to have us build the product and service them. Another benefit for the company is that since we are focused on this product, we can innovate faster and gather ideas from other customers -- some of which may be their competitors. Overall they would get a better quality product and for much cheaper than building it in-house. Usually for SAAS solutions the client already knows that they do not want to build it themselves and probably have some horror stories to tell.
So to answer the second question about the competitors, I generally do not focus that much on the competition. The way I see business is that I build a product that delivers a certain value to my client and I sell it for a portion of that value. As long as I stick to this plan, the existence of competitors in the space is not really a big deal. One of the worst product strategy that you can do is to copy a competitor's features verbatim. By doing so you are essentially playing catch-up and creating a me too product instead of creating unique value with your product. If you look closely a software products for the enterprise, due to the specific needs of a company or an industry the "competitors" are actually quite different from each other. Some of the offering solve one or two pain po...
Please DO continue! What you are writing provides transparency in to how enterprise sales and software works.
Again thank you so much for writing such a detailed and insightful answer.
Sent you an email.
Some of my blogs titles might include: - The paradox of choice: how to use psychology to develop your tier pricing.
- Why selling and product development are actual the same thing.
- Why learning is the most important part of any organization and how build it into the culture.
- What is the lean start-up really and how lean isn't just for start-up organization?
- What is value generation, why most people don't understand this concept.
- How to develop sound decisions within organizations.
- The difference between upper management and lower manager and how this affects the sales process.
- Strategy is really about choosing what not to do.
- Pricing and feature set discrimination: how understanding and segmenting your customers can improve your profit.
- Why charging less may do your customers more harm than good.
These are some of the topics (and perhaps many more) that I will write on a blog. If any of these topics are of interest to you, please write a comment below so that I can prioritize my writing.
As for today, I will talk about The paradox of choice: how to use psychology to develop your tier pricing.
If you look at every single SAAS, enterprise, and consumer facing company's website; you will notice that they all have a set of prices and features. This idea is not new and has been a ubiquitous practice. What is often not discussed is why these practices exist from a scientific perspective and how effectively develop the tier pricing model. Most companies either look around the web and copy more established players or develop their own tier offering with much less thought that they should.
Since we know that the price your product is as important as your product itself, being conscious about this practice can significantly improve your revenues.
The first thing to note is that people like choices. I am going to repeat this again: PEOPLE LIKE CHOICES. So given this statement, the worst thing that a company can do is not to give the customer a choice. If the customer does not see a choice in your offering, they will subconsciously create a choice in their head. In this case they will decide between pay for your product or not. If on the other hand, you have a nice set of offerings, the customer's attention will be focus on choosing between which of the offerings that best suits their needs. As you can see here, including choices in your offering changes the type of decision that the customer is thinking about. In the first case, they are focusing on the choice of whether to buy or not. In the later case, they are focusing on which offering to buy. This makes a big difference on your revenue and so you always want the customer in the second state of mind.
When creating a tier pricing model, you can also run into the problem of giving too much choices. Typically beyond 5 alternatives, clients have a difficult time of assessing which one is the best for them. This may lead to frustration and given the difficulty of making this decision, the client might not choose any of the alternatives. This is a classical case of paralysis by analysis. When making a decision, people want to be assured that they are making the right decision. If your pricing strategy can give a sense of assurance, your conversion rate will also be higher. Likewise people also want to walk away from the process feeling happy about their choice. Remember that whenever we make a purchase, we want to feel good about it afterwards. Bonus points if you make them feel so good that they will tell their friends about you.
So in order to create a fine balance between too few options and too many...
If you are interested in reading it and possibly sharing it with others, here is the url: http://doanhdo.blogspot.com/
I will write more posts in the near future on the topics that I mentioned earlier.
Consider that there is a Senior Sales Executive out there today that you have knowledge & expertise to help. Suggest reaching out to Diretors & SVPs of Sales in the SaaS space. Linkedin is a good place to find them. Now gather intel and network. You must talk to these guys, the more, the better.
Incidentally, start reading up on the sales process. Recommend reading The Challenger Sale by Adamson and New Sales Simplified by Weinberg.