By Matt Ball
In the world of start-ups and scale-ups, pilots are talked about all day, every day. Many customers don’t want to commit to what they see as an ‘unproven technology’, or they want to dip their toe in the water of transformation to better understand how technology will change their business before investing more heavily. A very reasonable approach, and if we were them we would be doing the same thing…
However, pilots can often become ‘problem projects’ for technology companies, with a lack of clarity regarding what was originally expected, where the pilot should end and when the actual ‘business-as-usual’ should begin. We refer to these projects as ‘orphaned pilots’, or ‘zombie pilots’: they end up walking the halls of the client in question looking lost and often a little bit scary. Don’t let this happen to you!
Conversely, pilots can be the ultimate way to land and expand quickly and relatively painlessly with a large corporate customer. In addition, a pilot can also be a fantastic vehicle to kickstart successful partnerships, rapidly expand these to become multipliers for sales and marketing, and thereby create delivery engines for future projects. So let’s get started and explore a few of these scenarios….
Defining a Pilot
What’s the number one rule of pilots? Contrary to what Chuck Palahniuk may say, you should definitely talk about pilots. A lot. The real key to pilots is to agree all the criteria and measures of success up front, so everybody is clear on:
- What is the objective of the pilot? How long will the pilot last?
- How will the pilot be measured? KPIs and Milestones are essential!
- Who is responsible for the pilot, both on the technology provider side, and on the client side?
- Who is paying for the pilot, and how much are they paying?
- What happens when the pilot is a success? How much will it cost to graduate from the pilot to a full launch?
- What happens in the unlikely event that the pilot is not a success?
If you can prepare your pilot with these considerations in mind it is much more likely to succeed. In ChannelCreator’s experience, it is crucial to clarify what happens when the pilot succeeds. A pilot should automatically graduate to a full contract, and ChannelCreator often advocates pilots being structured more as an ‘onboarding’ or ‘learning’ period of 3 months prior to the commencement of full billing. If the customer will not commit to automatic graduation to a full contract on attainment of the agreed KPIs and milestones then you should be challenge them. Why are they investing in the pilot if they don’t want to do the real thing?
When considering pilots, also think about when to stop offering them. Some technology scale-ups become ‘pilot junkies’ and are still offering pilots to their 20th or 30th customers. Bear in mind that when the ball is in the back of the net, you don’t have to keep kicking it… Know why you are offering pilots, and at what point you will stop offering them. Consider limiting the number of pilots you will do to 5 or a maximum of 10. If customers ask you after this, just say no!
Taking Pilots to Partners
Once you have your pilot model defined and you know who you’ll be offering them to, why, how long, for how much, and to what end, you can start considering partners.
Many technology businesses like to keep their pilots ‘clean’ by not involving 3rd parties. Although this can sometimes make things easier, there are many ways that pilots can be used to expand and enhance your business, even at a very early stage.
Imagine you have a business with 5 prospective pilots. Each of the end clients has a digital transformation consultancy that provides them with advisory and systems integration services. Now imagine that each of these potential partners is engaged in discussions about the pilot, and invited to participate in integration or some aspect of deployment. They know the client well, they have already covered the buying centre and have dinner with the relevant execs every month. Just think what these relationships might do to support the success and expansion of your pilot project into a full deployment, especially if the partner stood to gain from that expansion.
If you have 5 pilots, it’s always worth exploring whether you can use these pilots to:
- Partner with the incumbents, who might well be scared of you, will want to partner so they can keep close to what their client is doing, and will often want to be able to innovate with new offerings to this and other clients, OR
- Engage your ideal partner, or in other words the partner that best aligns with your proposition, and has the largest and/or most relevant customer base for your product or service. Introduce them into the project and use this as leverage, as discussed later in this blog. There’s more info on how to define ideal partner profiles in this blog.
Once you have a pilot and a partner to deliver it with, it’ll be crunch time. Don’t take on too many at a time, and ace the delivery. Bad news travels fast, and it travels faster when both a client and a partner are involved. However, good news and a successful pilot project will result in more projects, more resources trained and an ever-closer alignment with your partner, so it’s certainly worth the extra work.
Finding Pilots with Partners
When ChannelCreator runs a partner ecosystem validation project, one of the main goals is to find partners that already have projects in play, and customers that are about to decide on a project. We have a blog about running validation projects here.
Market dynamics suggest that between 3% and 8% of buyers are in the market for products and services at a given time, regardless of sector. This means that if you speak to 10 partners and each of these has 10 customers that fit your ideal customer profile, you should expect to find between 3 and 8 customers that will need what you have in that audience. Obviously we don’t live in a perfect world, so it doesn’t always work that way, but from ChannelCreator’s experience around 10% of the audience of a prospective partner will respond saying “I was just talking to a customer about this last week…”
What does this mean? If you build an audience of 50 partners serving customers that fit your ideal customer profile (ICP), you can expect around 5 of them to have prospective customers that need what you’re offering, and to which you can jointly pitch. There’s more on the ideal customer profile here if you’d like to delve further into this.
Pilots with partners don’t have to mirror the pilots outlined above. If your technology offering is fully baked, a pilot project with a partner should simply be a showcase of how you support them in delivering their first project. You should aim to do so in a way that reduces the risk and complexity for the partner, whilst helping them to get familiar with your technology or services. It’s essential that there is a clear benefit to the partner in collaborating on the project so consider carefully what’s in it for them, such as partner margins, or a clear route to the partner selling more of their core products or services.
Once the partner is up and running, you can put together a Go To Market (GTM) plan with them to drive more business, starting with a case study on your fantastically successful joint pilot!
‘Never do a direct deal again!’
In ChannelCreator’s projects, the ultimate objective is always to build a channel ecosystem that acts as a significant multiplier in terms of sales, marketing and lead generation. ChannelCreator usually employs a ‘pincer movement’ in which direct outreach is targeted towards groups of prospects that are either customers of ideal partners, or will be very attractive to ideal partners as prospective customers.
To accelerate partner onboarding, ChannelCreator recommends you use late-stage prospects from outbound activities to ‘activate partners’. It works as follows:
- Bring qualified deals to partners and in return ask them to bring you 4 new customer pitches over the first 12 months of your partnership
- Partners will sometimes push back, but where they do, negotiate alternative sales or marketing commitments in place of the above
- When the deal closes, ask the partner to sign your partner agreement and include all commitments in a schedule to the partner contract
- Create a partner enablement and GTM plan for each partner based on a standard blueprint, and encourage all partners to train sales, marketing, consultants and developers, and implement a marketing plan to promote your offering to their customers and to the market at large
The long term objective of partnerships is to become ‘the intel inside’: become part of the DNA of your partner’s business so that every proposal, every marketing campaign, every solution designed includes your technology or services.
Although pilots are not always the answer, they can be a hugely powerful tool in onboarding customers and winning and enabling partners, so get out there and start using them to their full potential!