Whether you are using a pure open source strategy or a hybrid approach such as “open core” (open source foundation with high-value closed source add-ons), a significant component of your bookings is tied to support subscriptions. Too often, early stage open source companies put a significant amount of thought into attracting community downloads and not enough thought into what they should be doing between the download event and the production deployment of applications based on their solutions. Impending deployment, of course, signals to an open source sales rep that his chances of selling a support subscription are pretty good.
Most commercial open source deals are won or lost in the tender early days following initial download. During this period, your services strategy and execution will either propel your deals forward or hold them back. Some open source vendors, especially those financed by venture capital, avoid services like the plague. Old school thinking holds that services are a low margin business, and utilization rates are difficult to maintain when your customer base is thin. I say get over it; if building a company were easy, everyone would do it.
My point here is that services are the best (if not the only) way to engage deeply with customers who are looking at your software. Consider the benefits of deep engagement using services:
- If packaged properly, you can actually charge for many of the services people need during Discovery and Evaluation. Even if you’re only covering your costs, moving the time-to-money event inward is a big psychological win.
- By making your experts available to customers in the early days of engagement, you increase the probability of a successful experience and compress the time-to-deployment window (thereby achieving subscription sales earlier and with greater consistency).
- The engagement of your experts will provide you with a uniquely deep understanding of your customers’ real needs, priorities and timetables. This “tribal” knowledge plays directly into the sales process and, in some cases, will be the competitive lever that swings a contested deal your way.
- As customers turn the corner to deployment, you will be very well positioned to ask their permission to write case studies about their applications.
What are the best services to offer during Discovery and Evaluation? At Active Endpoints, we had great success offering web-based training during the early days of customer engagement. JBoss (both pre- and post-acquisition by Red Hat) has had excellent uptake on its Developer Support subscriptions. EnterpriseDB has seen strong traction with some of its packaged service offerings. You need to match the services you offer with the profile of your prospective customers and the maturity of your market.
Define your services strategy; organize your team; build and deliver your programs; adjust based on what you learn. Excel at this part of your business and you will achieve positive outcomes.
What services strategies have you used to deepen customer engagement?