Is it just me or is the award dinner industry running away with itself? Open any business magazine these days and you’re faced with page upon page of glossy articles and ‘grip and grin’ pictures of award dinners, ‘awardees’ and their so-called ‘awards’.
I‘m about 12% (that’s the Kindle for you!) through Walter Isaacson’s biography of Steve Jobs. It makes for fascinating reading particularly as I’m at the chapter on the birth of the Apple II, the first micro I ever sold commercially (yes, I am that old).
These 3 became known collectively as “The Apple Marketing Philosophy”. It worked pretty well for Apple so should be well worth considering for your own organisation
Microsoft recently posted some stats that broke down the average business software system costs. The most interesting stat was that the actual purchase of the software represented about 5% of the overall system cost and expenditure on hardware was roughly the same. That probably comes as a bit of a surprise to many but, if you examine the figures, it’s actually pretty self-evident.
A business purchasing a new ERP system will expect to get somewhere between 6 and 10 years out of their new software. We have many customers who have been on Navision with us for at least as long as that, and a number who have been with us since the 90’s so we concur with Microsoft’s findings.
Over that period, the majority of the expenditure will be on annual support charges and people costs – installation, training, ongoing development and so forth. So, extrapolate the numbers over the life of the system, and the initial costs of buying the software and hardware quickly drop to a fraction of the total expenditure.
Software companies who understand this should also understand that if they fail to provide good levels of support or be perceived as not providing value for money, then all of the good work done in winning the initial sale will be for nothing. Microsoft also revealed that the average time to win a new software site was 6 months. That could be 6 months hard work wasted if someone else picks up the ongoing revenues.
Looking after customers and constantly monitoring feedback of our services is a fundamental element of our business plan. It has served us well bringing us well over 100 Navision sites and the income from those is set against the cost of a dedicated support department and support systems to ensure we maintain satisfaction levels and customer numbers.
The result is a strong and loyal customer base and a regular stream of defections from competitors. Someone somewhere spent 6 months winning those customers but then passed on the revenue stream to us. Not good business and certainly not sustainable.