January 25, 2017
Ep. #4, Building A Cyborg Company
Kyle and Kevin are back, this time discussing the concept of a ‘cyborg company’. What exactly is a cyborg company and how is it relevant...
A well-run SaaS Proof-of-Concept (POC), paid pilot, or trial period can be the key to capturing and converting prospects, especially as you move upmarket. But POCs can be challenging to execute well.
During a session on founder-led sales tactics, Mitch Morando shared how early-stage teams can execute more successful POCs. In this article, learn POC best practices from the session to help ensure that your POCs lead to long-term deals.
While many IC-level developer tools offer free trials that let developers take the product for a test drive themselves, enterprise POCs and trial periods address a different kind of buyer pain point: exploring a potential (and likely significant) in a new solution.
Mitch recommends framing your POC as a “Paid Pilot.” A paid pilot sets expectations for what the period is about: evaluating your product as a long-term investment. Asking your customers to pay a token fee is an important qualifier for long-term successful deals. If they’re not in enough pain that they can’t or aren’t willing to invest upfront, it may be challenging to convince them to pay a significant amount moving forward.
One of the secrets to successful POCs is building and maintaining momentum early on. POCs or paid pilots should be framed in the context of a full year contract, with the ability to terminate at will. Setting the pilot period up this way means that you’ve already jumped through the legal and security hoops that you’ll inevitably face. When the customer decides to convert from the pilot to the full-term contact, you won’t need to slow down to negotiate a details. You’ll be able to keep up your momentum and build on the results you’ve shown during the pilot.
Many POCs are set for a 90 day period. But a full quarter feels like a long time, and the task of implementing and evaluating your product can easily get lost among team’s other priorities for the quarter. Instead, aim for a 30 day paid pilot. A one-month pilot pushes your product to the top of the to-do list and drives urgency for stakeholders. Mitch notes that you can always leave the option open to extend the POC for another 30 days, if needed.
A successful POC doesn’t try to demonstrate the full scope of the product and its impact. It only needs to show the potential value in the long term.
Pick a single KPI that will have a measurable business impact (e.g. engineering time saved, increased revenue) and frame the pilot in terms of that goal. Only pick one KPI; the point is to share the sharpest, most focused vision of success you can, and the more goals you have, the less clear you impact will be. It’s okay if you pick an aggressive KPIs. You don’t necessarily have to meet your goal, you just have to show that you can move the needle in 30 days.
As the POC progresses, you’ll want to communicate the ROI you’ve delivered so far. Steer clear of using an interactive ROI calculators to show this value. You want to minimize the variables and the “what ifs” in the customer’s mind and focus on your actual, measurable impact.
One of the most common mistakes that companies make during their POCs is doing all the heavy lifting for the customer. Enterprise SaaS POCs are about showing business value, and they require an investment of resources from your customer. In order for a POC to be successful, there has to be work on both sides. This is especially true for developer tools, as these often require some work from the development team to properly configure and integrate into their existing workflow. Set the expectation that your POC is a partnership between your team and your customer’s team to ensure that they’re ready to commit the time and resources needed to get it off the ground.
POCs are a tool that helps you build trust and demonstrate what your product and company can do. Designing your POC to demonstrate value as quickly and clearly as possible ensures that POCs translate into long-term ARR. Learn more about building effective early-stage sales practices by reading tips from Mitch on early-stage prospecting, and learn more about the Morando Method here.