How to Cope with a Dysfunctional Customer Organization

By Geoffrey James

One of the greatest challenges software sales reps face is the organization that is so dysfunctional that selling it more technology might do it a disservice. While software sales reps tend to be optimistic about the ability of their technology to help transform an organization for the better, most reps have run across organizations that want to use technology to reinforce processes that are ineffective and likely to become more ineffective when automated.

The history of email illustrates this paradox. DEC and Wang were among the earliest adopters of email. Unfortunately, both firms suffered from an entrenched corporate bureaucracy that, prior to email, used a constant stream of paper-based, strategic interoffice memos to hamstring the sales organization from selling products that customers actually wanted. Rather than making these firms more productive, email empowered the clueless central bureaucracy to take even more control of the sales process, propelling both firms into a downward spiral.

Today, such problems most likely occur with technologies such as ERP and CRM. Companies with awkward sales processes often believe that applying technology to these processes will make the organization more productive. The reverse can be the case, though, when the processes are seriously broken. A firm with an inadequate customer support capability, for example, can create a complete disaster if it increases sales to new customers who require massive support. Similarly, many CRM efforts fail because the main motivation behind the installation is mistrust of sales and a lack of respect for the sales force’s ability to make decisions.

When confronted with a highly dysfunctional customer you must choose between three strategies.

1. Sell anyway. Bite your tongue and make the sale, even though you’re well aware that your software might actively do them harm. The short-term advantage is that you’ll make your numbers; the long-term disadvantage is that both you and your firm probably will become a scapegoat when the situation degenerates. This is not to say you should always walk away from these deals, but only that you must be aware of the long-term consequences. The worst thing you can do is to go into denial, convincing yourself that your software can do the impossible.

2. Recommend necessary changes. Take the high road and explain exactly what customers need to change to use your software effectively. The advantage to this approach is that you’ll be a hero if customers actually follow your advice, assuming your software really can deliver as promised. The disadvantage is that customers’ problems might be so entrenched inside their culture, as was the case with DEC and Wang, that change literally might be impossible.

3. Walk away. Why waste your time with customers who, even if they buy, are destined to fail? If you take this approach, exit the account gracefully by explaining that you’re not certain your company can help and don’t want them to waste their precious resources. Customers probably will be relieved and grateful and, more importantly, become all the more willing to do business with you in the future when you have a software product that they can use effectively.

From the book Business Wisdom of the Electronic Elite (Crown Business, 1996) by the newsletter author.