Build vs Buy, or tips for selling to larger companies/enterprise

just because you can do anything doesn’t mean you should do everything

- Andy Gadiel, Twitter

When you are selling to larger companies (and sometimes smaller ones too), a potential argument that might be raised either internally or with your sales pitch, is why they should buy your product instead of building it internally.

This post will look into the arguments from both sides and how you can address them. It has been written jointly by myself using the example of our server monitoring product, Server Density, and Oren Michels, co-founder & CEO of Mashery, an API infrastructure provider.

Before you even consider making the argument for buying your product, you need to ask yourself a few questions to tailor the pitch to your customer.

Q1: What does it look like from their standpoint?

You need to understand what your (potential) customer is going to get from your service. Are you selling them “great server monitoring” or “free revenue through an awesome addition to their existing product offering”? Are they interested in your product because it is something they will be using internally to manage their own infrastructure needs or something that will be given to their customers?

Once you know what they are getting from the arrangement, you will be able to properly understand what value you are adding.

Q2: Cater your licensing model to their situation

If you are selling for their own internal use then the licensing model will be different compared to if you are selling for them to resell your product, or even provide it integrated into their product offering.

The ROI question they are going to be asking is “when does building it pay off vs. buying it monthly”.

Some key arguments

We do this all day, every day. We are the experts.

The product you are selling is part of your core business. You will have spent time, effort and money developing it over a long period of time and have staff dedicated to continually working on and improving it. Your potential customer will be asking how easy it is for them implement, how long it would take to match your features and what resources would be needed to keep it maintained.

If it is something they need right now then there’s a clear case for buying because of the resources required to implement something in-house.

“In the same way you let the experts handle your e-mail servers (e.g. Microsoft Exchange) and phone systems (e.g. BT), we can handle your server monitoring.”

Everything is managed and supported by us

Providing a hosted service means the infrastructure is already in place to handle demand and future growth. Fixes to problems can be quickly deployed and the system is supported. The customer does not need to dedicate someone to ensuring everything remains operational as that is handled by you. This is one of the selling points of managed support services.

“Mashery will dynamically scale to support load spikes and long term growth so you don’t need to fire-fight sudden demand or pay for under-utilised capacity.”

You should be working on your core business

Choosing to develop something already available now has opportunity cost in terms of what else could be worked on instead. It takes time to get a team up to speed on something new and the time-to-market will be much greater than if an existing solution is brought in right now.

Costs

What is the true cost of building in-house? Internal resources are not free.

Taken from the Mashery website:

Conclusion

Selling to larger companies is always difficult because they have a lot of decisions to make before committing to one product. Whilst the above can serve as a guide, the important thing is to prepare yourself for each situation so you can have the right things to say at your fingertips when you need them.