Software companies want you to focus primarily on the software itself, no matter what industry you are in. Many builders also focus on the software system and the features and benefits. But one of the most important features is the company itself. Imagine buying a house without even asking who the builder is, or perhaps, was, as in past tense.
Don’t do that. The correct software system ‘buy’ has to include what or who the company is.
There are many questions companies are not going to just answer easily and more that would be totally inappropriate to even be asked. Just like any builder wants to retain some information if possible, and will only answer some questions when asked, software companies are the same way. But you can get an even better idea of whether your investment of time and money is well positioned if you ask a few more strategic questions!
Here are 10 sensitive ones that will tell you a lot.
1) What is your MONTHLY churn rate?
Talk about sensitive. How many customers do you lose, is a big deal and a very touchy question. While it is true that companies could easily lie, at least you will know what the likely truthful response is so, if you don’t get that, you might want to change your expectations about getting honest answers to other questions. If you are buying software and do not realize that companies come and go for all types of reasons, you are being naïve.
2) Have you been involved with lawsuits?
Trap Question. It isn’t just what the answer is, but how they answer it. Also, if you are talking to a few companies most of them will quickly just say no, but there might just be one that stutters over it and boom, you pretty much got the answer.
3) When I call technical support, who will I talk to?
It’s actually a big deal. One common answer is a ‘dedicated support rep’ or an ‘assigned manager’, which may sound good, unless you have a lot of experience. Those are the wrong answers because everyone is out a day here and there or goes on vacation, then what? You get a stand in? A better answer would be a team. Software systems for this industry shouldn’t be so difficult that only one person knows your set up, or could help you.
4) What is your Support Satisfaction Rate?
Every company, just like your own, wants happy customers. Some companies work very hard to get and keep those happy customers. If you didn’t even ask the question, you are letting crucial information slip through your decision-making hands. Like reviews for products, restaurants and all sorts of products and services, the percentage should be pretty high. Since we all know keeping customers is less expensive than getting new ones, a satisfaction rate of 90% is not really all that good. 95% is more reasonable and probably a minimum level of expectation. Perfection isn’t attainable either. A rate of 97-98% is excellent.
5) How many hours per month (or year) is your system down?
There is some psychology behind this. Anyone buying software thinking the system won’t be down, ever, is just not very aware of how things work. However, the software should not be down very much. The average is one hour per year! So, how they answer is important. If they don’t know, they are either not well trained or not honest. If they do answer in vague terms such as, “Oh, like not much” or “A couple hours or something” means they are either an amateur, actually dishonest or just don’t know and in either case, they may not be a very worthwhile choice for you. If they sound like they are making up this answer, they are likely making up other answers.
6) What are your 2 primary user personas?
Every company has and knows who their target market is. They don’t want to tell you BEFORE you tell them who and what you are. But ask! If they tell you broad terms such as, “for builders”, this is amateurish. Even terms such as Remodelers and Custom Builders are broad and are just who their target market is, not their primary user personas. If they cannot narrow it down or they are adamant that their system is ‘for everyone’, they are either an amateur or possibly not honest and just trying to throw you in a large funnel to see what sticks.
7) Do you turn down, or not accept, customers, and if so, why?
Well of course you might think nobody wants to admit they turn down customers. But that is not true. They do. They should, and you should too, at least for the right reasons. If the software company says no, you probably need to end the conversation. If they say yes, then they are honest. If they tell you who, what type or why, you can more accurately determine if there is a match for you or not.
8) What is your ratio of sales people to support people?
A ratio of 1 to 1 is great, even 1 to 2 is okay, but if it is 1 to 3 or worse, that is probably not acceptable. You would not be in business long if you had 2 sales people and 8 people that just did warranty, right?.
9) Will You Price Match Your Competition?
In the case of software, there is no such thing as exact apples to apples. If the sales person is an amateur, they will say “Yes”. If they are more experienced, but still not very good, they will say, “I will find out”. Only if they know they do not have to match their competition and they know (and they should know) they are providing more value than their competition, can they honestly and with integrity answer you, “No, we don’t price match our competition, but there are some very good reasons for that. May I elaborate?”
10) How often do you roll out new features?
Again with the reverse psychology, the amateur sales person, or poorly run company, responds, “All the time”. Well, ‘All the time’ is the exact wrong answer. If they have so many things they have or need to have come out, they must certainly be new or not have designed the software intelligently in the first place. If they are coming out with a release every few months, that is an okay answer.
I hope this helps. My intent is to help builders run a better business and raise the bar for professionalism in our industry. Use these questions to make better informed decisions.
Remember, if you have no system of record, you will have a record of no system.
Here is to your success.