The software upgrade is unique among virtually all things bought and sold. Software is not consumed, so it need not be replenished monthly like paper clips. Nor is it susceptible to the wear and tear that warrants continual replacement of some items, such as a turbine. As long as its host computer draws electronic breath, software has no shelf life. With customers becoming more discerning in their spending, even satisfied customers are reluctant to go for the upgrade. The challenge is to make the incremental improvement provided by the upgrade appear indispensable. “There’s a fine line with upgrades. Nuisance upgrades, the kind that come with maintenance agreements, are part of the TCO,” says Sheryl Kingstone, program manager for Yankee Group. “The question is if the architectural shift is worth the pain and aggravation of upgrades when it’s practically a new install.”
The first step is to match the needs of your customer with the benefits provided by the upgrade. You should know first-hand the pain points and ongoing challenges your customers face. The words, I wish, on the lips of a customer today could lead to an upgrade sale tomorrow. Having a product that addresses users’ needs, however, is only part of an upgrade sale.
To make a compelling case, crystallize the upgrade as a method for ensuring that your customers’ technology stays up to date with the realities of their business. That puts the onus on you to watch the industry. Don’t just ask clients how their industry is evolving, tell them – with authority. There may be global shifts in process, new regulatory moves or changes in the competitive landscape that the previous version of your firm’s software was not designed to handle. Under those circumstances a change to a newer version might be critical to your customers’ success.
Ultimately, your credibility in explaining your customers’ need for the new version of the software is far more important to them than your need to sell it. Frame the discussion around their needs. Don’t be afraid to remind customers that their competitors will keep moving their technology forward. “A lot of companies have decided to take a we’re-not-going-to-change, we’re-not-going-to-pay-maintenance, we’re-not-going-to-upgrade, or a we’re-going-to-stay-with-it-because-it’s-working-fine approach, but eventually they do fall behind,” says Kingstone.