“This detection process doesn't detect toxic customers, it detects corporate customers at large companies.” (comment)
recommended by 2 users | 2010 | spolsky on: How to detect a toxic customer | customers & sales | original thread |
spolsky on Dec 9, 2010 | on: How to detect a toxic customer | view on HN

This detection process doesn't detect toxic customers, it detects corporate customers at large companies.

It's fine for a small startup to cater to small startups, but the big companies have big budgets, and eventually, you'll be making 80% of your money off of them, so learning how to deal with them can be helpful.

1. Big companies often have purchasing departments actually do the purchase. They are trained to expect discounts and the people in the purchasing department know a lot more about asking for discounts than they know about software, because that is their specialized role in the organization. If you politely tell them that you have one price for everyone, they'll still purchase, because the purchasing department ususally doesn't have the power to stop the purchase.

2. Those 80-question checklists usually come out of the following, typical corporate process:

* A team of people identifies a need for software

* The team meets to agree on everything they need

* The junior person on the team is tasked with evaluating 12 possible products to see which one is best

* That person makes up a spreadsheet and sends it to each of the vendors hoping that they will do his homework for him

* The vendors who have decent presales support or sales teams fill out the spreadsheets by marking everything as "Yes" or "Yes with a footnote" and get the deal.

This also explains the "multiple questions that can be answered from a website" -- it's a sign of a person who has been put in charge of evaluating multiple products, not a sign of a toxic customer.

3. Multiple contacts through multiple channels are usually the sign of multiple interested parties at the client site. You can't sell to big companies without touching multiple people. One of a salesperson's most important jobs is helping the customer themselves get organized and make a purchase. A good salesperson helps the person who wants your software navigate their own corporate purchasing politics.

Summary: while it's fine to turn away truly toxic customers, and you are welcome to decide that you'd rather sell to the starving startup founders on Y-combinator who would rather spend 2 hours scouring your website than deal with a salesperson, the corporate customers turn out to be remarkably price-insensitive, once they make a purchase they will keep paying you maintenance for years long after the product is not even in use, and they're just as likely to leave you alone as the small guys, but they do have "multiple stakeholders" and if you want to sell to them you need a process that matches their reality.

2 users recommended this comment. What they said:
swombat Nov 9, 2012 | on: How to Detect a Toxic Customer (2010) | context

I presume this came up because it was auto-tweeted from swombat.com (this got retweeted today: http://swombat.com/2010/12/9/how-to-detect-a-toxic-customer ). If so, it's worth pointing to Joel Spolsky's response to this:

http://news.ycombinator.com/item?id=1987223

Definitely worth a read alongside this article.

jh3 May 18, 2015 | on: Ask HN: What are some of the best HN comments that you've… | context

bdunn on justifying your costs as a freelancer: https://news.ycombinator.com/item?id=8705179

patio11 and the Fair Credit Reporting Act: https://news.ycombinator.com/item?id=7135833

spolsky on detecting toxic customers: http://news.ycombinator.com/item?id=1987223

tptacek on naming your company: http://news.ycombinator.com/item?id=4684845

The journey of Flappy Bird: https://news.ycombinator.com/item?id=7207943

Programming is terrible: https://news.ycombinator.com/item?id=6469360

On being a consultant: https://news.ycombinator.com/item?id=6443135

Why Do So Many Incompetent Men Become Leaders? https://news.ycombinator.com/item?id=6263458

Are designers crazy? http://news.ycombinator.com/item?id=5002262

Why learning to code is so hard: https://news.ycombinator.com/item?id=4933178

"I don't understand": http://news.ycombinator.com/item?id=4930262

death and regrets: https://news.ycombinator.com/item?id=4540459