The Sales vs. Expertise Scale
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@DustinB3403 said in The Sales vs. Expertise Scale:
The distinction here is that a single user, is a uniformed consumer(usually). An enterprise is a highly informed consumer.
I don't think that it's the level of informed that is the factor, but the level of diligence. No matter how uninformed someone is, they still know how to acquire information. It's whether they place value on good advice or not that appears to be the key factor.
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@scottalanmiller I disagree, a uniformed person, likely knows that they can go out and research the product. And likely does give it a 15 minute google review. But they won't and can't afford to pay someone $150/hr to tell them which dish washer to purchase.
It's the scale of economics in play. A single purchase doesn't warrant the extra spend.
An enterprise though, is going to be buying way more than a single dishwasher, and will want to know which last the longest, cost the least to maintain and so on. So they'll pay someone to provide the expertise.
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@DustinB3403 said in The Sales vs. Expertise Scale:
@scottalanmiller I disagree, a uniformed person, likely knows that they can go out and research the product. And likely does give it a 15 minute google review. But they won't and can't afford to pay someone $150/hr to tell them which dish washer to purchase.
I would say very much the opposite. They cannot afford not to pay for critical advice. The less informed someone is, the more value they get from paying for the advice.
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@scottalanmiller I'm not saying that they can't afford to be without the advice, I'm saying they don't have the money to be able to pay for the advice.
They've got $500 and not a penny more to spend, and go in with the mindset of "I can only get this for $500"
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@DustinB3403 said in The Sales vs. Expertise Scale:
They've got $500 and not a penny more to spend, and go in with the mindset of "I can only get this for $500"
Yes, the mindset is wrong, that's my point. Not that they can't afford or don't need the advice. Not paying for good advice often leads to being less able to pay for it against next time.
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@scottalanmiller said in The Sales vs. Expertise Scale:
@DustinB3403 said in The Sales vs. Expertise Scale:
They've got $500 and not a penny more to spend, and go in with the mindset of "I can only get this for $500"
Yes, the mindset is wrong, that's my point. Not that they can't afford or don't need the advice. Not paying for good advice often leads to being less able to pay for it against next time.
But it's not just the mindset, its real world practicalities. Some people can't spend more than X, or risk starving or some other such issue.
You're getting an individual mixed up with a business, a business doesn't starve in the literal sense of needing food.
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@DustinB3403 said in The Sales vs. Expertise Scale:
It's the scale of economics in play. A single purchase doesn't warrant the extra spend.
Spot on. Expertise tends to be a fixed cost. If it cost $1000 to pay someone to tell you the best dishwasher to buy, if you buy 1000 dishwashers it only costs $1 per dishwasher for the expert advice. If you buy 1 dishwasher, it costs you $1000 per dishwasher.
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@DustinB3403 said in The Sales vs. Expertise Scale:
@scottalanmiller said in The Sales vs. Expertise Scale:
@DustinB3403 said in The Sales vs. Expertise Scale:
They've got $500 and not a penny more to spend, and go in with the mindset of "I can only get this for $500"
Yes, the mindset is wrong, that's my point. Not that they can't afford or don't need the advice. Not paying for good advice often leads to being less able to pay for it against next time.
But it's not just the mindset, its real world practicalities. Some people can't spend more than X, or risk starving or some other such issue.
You're getting an individual mixed up with a business, a business doesn't starve in the literal sense of needing food.
Individuals are businesses. Businesses are tasked with getting the best results from the available funds. The more people act like a responsible business, the more resources they have. The more someone needs to not starve, the more important behaving smartly is.
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@Carnival-Boy said in The Sales vs. Expertise Scale:
@DustinB3403 said in The Sales vs. Expertise Scale:
It's the scale of economics in play. A single purchase doesn't warrant the extra spend.
Spot on. Expertise tends to be a fixed cost. If it cost $1000 to pay someone to tell you the best dishwasher to buy, if you buy 1000 dishwashers it only costs $1 per dishwasher for the expert advice. If you buy 1 dishwasher, it costs you $1000 per dishwasher.
Expertise is rarely like that. Small businesses need small expertise. For example, designing a sensible architecture for five years of an SMB might take two hours. Maybe a day. In an enterprise, it might take a year or two of continuous work. Things really do scale, even in the expertise space.
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Another example, a home user might need 15 minutes of advice on their non-PC gear to buy and, at most, 30-60 minutes of advice on their computing needs themselves. But an SMB of 25 people might need a full day of consulting for that and an enterprise might need a full time team.
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@scottalanmiller said in The Sales vs. Expertise Scale:
Expertise is rarely like that.
Yes it is.
Anyway, just read the original thread. NTG fire 50% of their customers? Blimey!
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@Carnival-Boy said in The Sales vs. Expertise Scale:
Anyway, just read the original thread. NTG fire 50% of their customers? Blimey!
Oh yeah. Partially because we give them the benefit of the doubt when accepting them. You can vet heavily before taking on customers, but then you risk eliminating those that are honestly trying to do a good job. We prefer to take some risk and take on too many and let them prove themselves or not then cull them later. It's a little riskier for us, but we don't fail to provide service for someone that just "appears" to be a bad customer and is truly trying to be good once they come on board.
I think you'll fine @JaredBusch in a similar boat. You either eliminate most customers before starting service, or you have to do so later. In the SMB market, the average customer is pretty bad. You can't keep that dead weight around or you can't provide great service to the remaining customers.
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@Carnival-Boy said in The Sales vs. Expertise Scale:
@scottalanmiller said in The Sales vs. Expertise Scale:
Expertise is rarely like that.
Yes it is.
In IT? What examples do you have? Maybe you are not getting advice from the right places. I can't think of anything in IT that would work as described. SMBs get good advice at a tiny fraction of the cost of larger businesses. If they aren't getting that, then that highlights the importance of getting better advice at an even higher scale - because that advice is out there, scaled for them.
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@scottalanmiller said in The Sales vs. Expertise Scale:
Maybe you are not getting advice from the right places.
This is not about me, but you raise a good point. It costs time (and thus money) just to find the right place to look. So in your example, a home user might only need 15 minutes of expert advice, but where does he find that advice? The search costs money.
In our dishwasher example, where do you find an expert that will charge 15 minutes of his time to help you out?
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@Carnival-Boy said in The Sales vs. Expertise Scale:
In our dishwasher example, where do you find an expert that will charge 15 minutes of his time to help you out?
A dishwasher is not really a business item so it not really a valid example. You can't find expert advice on movies to buy or video games to play outside of consumer reviews. That's a different type of product than your home business stuff.
But if you really want to know, call your plumber or handyman. You should have one for your home, unless you yourself are the expert and getting the expertise internally. In either case, the salesman is not the person to call.
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@Carnival-Boy said in The Sales vs. Expertise Scale:
@scottalanmiller said in The Sales vs. Expertise Scale:
Maybe you are not getting advice from the right places.
This is not about me, ...
It is when you say that you can't get advice. I have no issue getting it and have no idea where the problem comes from or how you are encountering it. If you don't have the ability to get advice in this manner and don't believe that I can either, when I can, the issue is either than you aren't able to get it and that's unique, or that I am able to get it, and that is unique. So given the style of the issue, it has to be about at least one of us. Either what makes me uniquely able to avoid that problem that you see, or what makes you run into it?
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@Carnival-Boy said in The Sales vs. Expertise Scale:
So in your example, a home user might only need 15 minutes of expert advice, but where does he find that advice? The search costs money.
True, the search costs money. But only once, as an expert is something that you need all of the time. Or on a recurring basis, at least. Home users especially need a continuous stream of good advice and not getting it drains their pocketbooks. It could be in the sense of home appliances, plumbing and repairs (I certainly have an expert for my home for this stuff, I could not afford to not to) or in the sense of technology and security.
Take my sister in law for example.... in just a few minutes of consulting we save her over $1,000 a year in bad purchases and wasted money. She could trivially pay $150/hr to an expert to get that advice every year and save a fortune. Finding a person who knows something about IT to pay for that is not that hard and easily pays for itself quickly.
Even buying a single computer pays for the search and the advice.
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So let's look at some advice that we might give a home user, a very basic one like my SIL.
She used to buy computers at about $600 a pop and they'd last about two to three years. They were hard for her family to use and she was always buying extra software to get them to do what she needed and they were never happy with them. Their network gear is always like $150 and they buy it too often.
We moved them from a two year spend of $2,400 to about $300 (because their machines are cheaper and last longer.) And they don't spend nearly as much on software now.
And if they would listen about the firewall, we'd cut that cost in a third or more.
That's a lot of cost savings to justify paying for a small amount of advice.
Same thing goes for televisions and stuff. They traditionally have overspent by thousands because they listen to salesman instead of seeking out actual advice.
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reason for this, to me, is partially induced by the amount of work/materials required in a company to get the job done.
When you start it is really close to what you do in your house, so you go to the mall and buy a router, a laptop and so... you do not think about planning, it is just another piece of HW you need, like the smartphone. You do not hire a consultant to buy a smartphone.
a SMB with no more then 10 people will need not so much, maybe just an intervention now or then, let say to change a burned router every 3/5 years, or a broken disk in a NAS. This stuff is so rare that the SMB do not hire competent people to manage it - they just buy stuff like in their own house-, therefore, the SMB has a relevant degree of ignorance on a topic.
the commercial guy in front of the SMB is (apparently) a huge source of information for the SMB, they do not need to go deeper on tech details: they can't even totally understand what the commercial is exposing.
Now you will say: hay, consultants are there for this very topic: let SMB not be fooled/deviated by bad commercial practices.
Yes, but this implies that the SMB has - at least - a bare minimum degree of knowledge about its own ignorance.
Unfortunately they have not. Everything starts with something small, let say a small 2-disk NAS. Hey it worked! now what, oh we need a small server. Hey the commercial guy has solved the problem last time, let's call him again, he will solve it!
Then you start buy stuff and stuff, in the end IT is not the core business it is just like other tools you need to make the job done. period. what matterst is if you have margins.
Here is where you start thinking about consultats. when margins are hard. and the bigger you are the harder to keep margins high. therefore you start minding about what you are doing. And consultants start here. But it is not the IT consultant. the IT consultant is at the end of the queue, first you start with company organization, with people and procedures, THEN you ask for consultancy on tools.
