Selecting a Software Vendor: Tips from “Pretty Woman”

A business associate of mine recently began a search for a new payroll vendor.  He identified six well-known companies and requested information from each.  One of the six responded, “I am sorry sir.  Our sales team has a list of companies we want to pursue as customers, and your company is not on it.  We are unable to help you at this time”.  As he told me this story, I couldn’t help but think how he must feel like Vivian (Julia Roberts) in the famous shopping scene from “Pretty Woman”. For those unfamiliar, Vivian, an LA prostitute, enters a Hollywood boutique to purchase new clothes for herself at the request (and funding) of her most recent client. Unfortunately, Vivian still looks the part of her profession when she enters the boutique and immediately draws negative attention from the store’s management. The boutique’s pious salesperson looks down her nose at Vivian and says, “I’m sure we don’t have anything for you,” and all but pushes Vivian out the door. Vivian returns to the boutique with her wealthy client, Edward (Richard Gere) and is given a radically different shopping experience. Vivian becomes a VERY special customer deserving of “serious sucking up”.  What follows is a bit of movie magic pulled from many women’s shopping fantasies.  Julia is wined and wooed by the store manager for a shopping experience of a lifetime.  What a difference it makes when your business is strongly desired!

Maybe the example is extreme, but there is a bit of truth to it. Most business managers agree that “80% of a (software vendor’s) business stems from 20% of its customers.” So, which customers are likely to receive a vendor’s best service? The customers that drive the vast majority of the company’s bottom line? Or the ones that individually contribute comparatively little? Unfortunately, it’s nearly always the former. And when given new business opportunities from customers in the lower-contributing “80%” category, many vendors decide to set aside any notion of service standards. They accept the new business and simply reduce the special treatment that would otherwise go to a more profitable customer. You might recognize this “special treatment” as responsiveness, or flexibility in processes.

So how can you apply this story to software vendor selection?

First, realize that technology must be appropriately implemented in order to be useful. Continuous technological advancements have allowed successive generations of software solutions to offer new features we never even knew we needed!  But often these technological advances are light years ahead of an organization’s ability to incorporate the advances and adopt new practices. So lesson one is look for a vendor that will not just sell you a product, but will help you determine what your company can effectively adopt and successfully use.

Second, consider that 80% of the companies in the market can probably fulfill most – if not all – of your desired specifications, and will likely meet all of your “must have” requirements.  So lesson two is find out who wants your business.  With one vendor, you could easily be just another customer…easily replaced. With another vendor, you could be one of the valued 20% producing 80% of their business. 

In today’s resource-strapped marketplace, vendor flexibility and responsiveness are becoming precious commodities.  Promises of superior customer service are in no short supply, but few companies are getting it right 100% of the time. As customers, we all want to fell valued and special.  Matching the size of your business need to a vendor who will be excited about having your business will help ensure you get the extra-special service you deserve.  Who knows, you might even get the roses and limo as a bonus!

Amy Barnes 
Director of Business Development