Is a $99 sale worth it? How about $240? If selling your B2E product takes a few phone calls, perhaps even a face-to-face meeting with a prospect, to then only walk away with a tiny purchase order, does it make good business sense to offer such small licensing options? Likely it will cost your company more than that to pay you, process and implement the order. I think conventional wisdom in B2E is that the little sale is not worth it. Today most investors and entrepreneurs would rather give product away until they find a way to monetize in a big way, than they would pay a sales force to initiate what could potentially be classroom level, small dollar sales. Conventional wisdom is wrong.
K-12 buyers are unique in many ways. They have zero sum budgets where a penny saved is oddly enough a penny lost. They are fragmented and scattered, with pockets of earmarked funds, distributed purchase authority and labyrinthine chains of command. Lastly and most importantly, ROI is not measured in dollars, but rather in student performance. Unlike our businesses, they struggle to measure their ROI against an ever-shifting set of requirements and yardsticks. And that climate makes K-12 buyers extremely cautious buyers, more so than any other industry I’ve worked in.
The chief thing that successful B2E companies do well is prove their worth to cautious buyers. This can be achieved in a myriad of ways, and as many as you can layer into your go-to-market strategy, the better. You want to build a reputable brand to lessen risk for the B2E buyer. You want to focus on quality and service. You want to offer good options to sample, pilot, and ease into your product. Small license options are one way to achieve that.
Think about COSTCO. If you shop there, I guarantee the first thing that will come to your mind are the free samples. You can’t get down the center aisles without eating a smorgasbord of product samples. And this is incredibly smart! There is no “small” anything at COSTCO. Any purchase is a commitment. And if you are not sure you’re going to like pomegranate-blueberry juice, you are probably reluctant to buy a 24-pack of it. Now think about your product’s smallest license size. Does it enable a B2E buyer to ease in gently to a commitment with you?
If you sell a relatively commoditized product, say orange juice, feel free to sell it by the case. You have the benefit of customers looking for you instead of the other way around, and lots of happy referrals to vouch for you. But you’re dealing with other problems, such as competition, mandate shifts, and budget cuts for your category. A more “bleeding edge” product on the other hand, won’t have to worry about competition, and since it’s recently conceived, the mandates and budgets all align. But you buyers are a little afraid to try it. You are the pomegranate-blueberry juice of the B2E industry. You are going to break in to the market one maverick classroom at a time. Does your license model allow that to happen?
A couple of weeks ago I received a very important purchase order…of $240. I happened to be on the phone with a B2E friend when it arrived in my inbox. I said, “I just sold the state of NH, but no one but me knows it.” She laughed and knew what I meant immediately – this was the beginning of a new kind of implementation that was going to be a test case for using our product for something that state is struggling to find a good solution for. I know we are the answer and one good use case is all I need to start the ball rolling. “Ring the bell,” she said. “These are the victories we look back at and realize that’s when it all came together.”
Take a look at how you’re making it easy for a cautious buyer to get to know you, and get to trust you. You can always expand with customers that you have a relationship with, but if you’re unable to gain a beachhead because you’re either asking for too large a commitment, or under the powers-that-be’s radar by giving your product away free, likely there will be a more nimble vendor already landed on those shores and expanding across that school system. Go ahead and take a chance with small license sizes and have a little patience. Success for B2E’s can be measured in more than just dollars, customer count is equal to, if not more valuable.