“Deal of the Week” Syndrome

1. Ideas on Business Development | Partnerships | Product Marketing by Bryan Socransky
“Deal of the Week” Syndrome
Many software vendors suffer from “deal of the week” syndrome.
Sales brings in a deal for a new application in a new industry.
It’s always great to get new business but this often ends up being an anomaly with no subsequent orders
for the same application or no additional sales to the same industry.
Total Addressable Market = $2B/year
Deal of the
Target Market = Week = $150K
$200M/years
Things go very wrong when development needs to change their existing roadmap in order to
accommodate the latest deal of the week because usually (always?) these deals require some new
feature or functionality that does not currently exist. Development is working on creating products for a
chosen target market that has an estimated sales potential of $200M per year but now they are being
side-tracked by one deal that is worth $150K. The entire roadmap gets delayed for products that are
being developed to attack a $200M potential just to win $150K worth of business today.
The other similar and equally troublesome situation is when professional services is engaged to provide
customizations and a “special” deployment for this deal of the week. This wouldn’t be so bad if the
customer was willing to pay for the full value of the professional services. But they never do in these
situations. So the software vendor ends up subsidizing the professional services and may even lose
money on the project.
The result of either one of these consequences is that the software vendor acts as a custom engineering
shop with an unpredictable sales pipeline because there is no predictability in where and when the next
“deal of the week” will come from.
The deal of the week ends up being a one hit wonder and the software vendor may even lose money on
it.
Stay focused on your target markets. It is hard to say “no” but often this is the right response.