After 30 years of working in tech across Asia, I’ve seen a lot of ups and downs in these markets. Not long ago, I wrote a blog about what US and European software companies can do to ensure their success when opening for business in the region. Now, as the US wavers between higher inflation and recession, the war in Ukraine enters its second year, and the impact of Covid is still being felt by most industries, it seems like the right time to write about the challenges those markets are facing, and what tech companies can do to help.
The impact of what happens in the US and European economies invariably has repercussions in Asia, but the impact is not felt uniformly across all countries. English-speaking countries such as Australia and New Zealand rely on Western media for their industry news. Battling inflation in the United States can usher in conservatism in that part of Asia. Technology purchases don’t halt but customers spend more time and effort to confirm ROI before closing the deal. Panic and anxiety, whether based on real economic challenges or not, can set in and affect decision-making and investments.
Larger Asian economies, such as Japan and Korea, are more shielded from what’s happening in the west, so it’s business as usual in the current climate. No country is immune to the impacts on supply chain and logistics, but they can take care of themselves to a certain degree. India is experiencing a surge in cloud-native startup companies, but a slowdown in cash flow is working against that growth currently.
How to best serve Asia when the noise amplifies
There are many things you can do to successfully sell in Asia when economic headwinds, real or imagined, begin to emerge. I recommend sales executives and their teams adopt these tips for all economic seasons: prosperous, uncertain, and challenging.
Shift from product selling to solution selling
If they’re feeling the impact of global events, feel your customers’ pain and find a solution. Maybe it’s a downturn in revenue, lower margins or lack of efficiency. When money is tight, a customer’s natural instinct is to put the brakes on, shelve projects, and even let go of employees. But there’s also ways to create new processes and business opportunities that have near-immediate impact to grow their revenue and reduce their costs. Teach your sales reps the art of solution selling: Work with customers, understand their problems, determine which ones you can solve, and show them how much they will benefit. Even in the bullish times, it’s better in the long run to sell business value instead of product features.
But be careful, because everyone claims to sell a solution. The question to ask is, “Will it solve a customer’s problem?” It’s more important to confirm your technology addresses those problems so you can go to the CIO and the CEO with that message. For Snowflake, it’s about finding ways for customers to best access, manage, share and monetize their data.
Deliver value beyond what your technology can
At Snowflake, we have a value engineering team that looks at current technology customers use. We evaluate what it costs, what it delivers, what its limitations are and how that impacts their business. If it takes the customer a week to do business analytics, and Snowflake could enable real-time analytics on a single source of truth within hours, then that could be a valuable alternative for them. In addition to economic benefits and the data insights available in the cloud, moving legacy systems such as Exadata, Cloudera, Teradata to a cloud platform frequently offers significant cost savings and ROI.
Now you have a very solid, customer-specific opportunity that could lower cost, increase ROI, deliver faster decisions backed by data, and help overtake the competition. All the while, the macroeconomic anxieties take a back seat to something real—saving money, growing the business, increasing market share, or all three.
Land and expand
Anyone can sell when times are good. When your technology is really popular, everybody wants it. So it’s not as hard to get those purchase orders compared to when markets are down. Good sales reps don’t stop there. They know a customer’s challenges and opportunities don’t solely reside within the single department or business unit that will deploy the software. They develop solid relationships with initial decision makers, maintain their trust, and gain access to other teams and decision makers at higher levels. That’s the minimum requirement to address a customer’s additional use cases and ultimately provide them more business value.
Have a second act
This is more about product development than sales. A lot of tech companies have their first act. They create this new technology and customers say: “Wow! That’s incredible. Let’s buy some.” Then the software provider has this growth phase and many peak without a second act. They may have had five to 10 years of growth, then that growth inevitably slows and they get acquired or they get replaced.
Snowflake went from a data warehouse as a service offering, to the data cloud platform enabling not just data warehouses but data engineering, data sharing, data app development, data lakes, etc. We’ve since enabled the ability to develop and run apps on Snowflake, among other new use cases. Even if you’re first, the competition will catch up. When they do, you should already be delivering the next big thing to differentiate yourself. And always, always let them know what’s coming next: “You’re buying this now, but the solution roadmap will future-proof this decision.” In that sense, it is always going to be evolving.
Be a bunny, not a frog
At my previous company, it took us three to four years to get customer CEOs to meet with us. We started with developers and technical users. If they liked the product they would say to their manager, “this is pretty good stuff”, and that would lead to maybe a bigger deal with a discussion at the director level. A year later maybe you’ve got an even bigger project, you’re adding a lot of value, and you might get access to the CIO.
What we found at Snowflake is that we’re getting to CEOs, CIOs and CFOs before the customers are even using our technology, or they’ve just done a couple of small projects with us. And suddenly we’re meeting with the key decision maker that has a $1 billion budget but they haven’t gone through that organic journey to a big strategic kind of engagement. We end up leapfrogging the process.
Customers in this situation often say: “We love the concept and the Data Cloud, and it’s interesting to see what you’re doing with all those customers in the U.S. We want to get there quickly.” We acknowledge their enthusiasm but encourage them to slow down and take the necessary steps to get there: build a center of excellence, acquire executive sponsorship, and deliver a couple of smaller projects first.
Overall, they first have to experience the value of your solution internally, develop real momentum through the success of smaller projects, and then attack that really big initiative. That’s the best way for a customer and a software company to grow a successful and long-lasting relationship. Show value from early on and build on that to grow your partnership with the customer.
Offer the consumption model
Most SaaS companies sell their product as a subscription. They offer discounts on multi-year deals, locking customers into stable and predictable spending. But economic times are never stable. When the headwinds come and customers want to conserve, they can’t really do so under the subscription model.
At Snowflake, we offer discounts for bigger commitments from customers too but we also only offer the pay-as-you-go consumption model. If customers don’t use the credits, they don’t lose them and they don’t get charged until they use them. As counterintuitive as this may seem to a SaaS company’s success, it strengthens customer relationships in ways that subscription models can’t.
At Snowflake, we’ve found this model can actually generate more trust and business in the long term. It also requires our sales reps to engage customers long after the sale is made, enabling customers to understand the value they can derive from using Snowflake for new data workloads and for identifying new revenue opportunities with data. We don’t recognize revenue until the customer uses the credits they’ve bought. This approach avoids any “shelfware” problem and keeps the sales and SE team focused on customer success. A lot of tech companies have a separate “customer success” team. We don’t. Everything we do, regardless of your role in Snowflake, is about making customers crazy happy which naturally leads to consumption.
Selling disruptive technology
Selling a solution that challenges a mainstay technology sector that’s decades old can be as big a challenge as it is an opportunity. Snowflake’s cloud data platform became generally available in 2014. Back then, we targeted our go-to-market efforts towards a single workload—the data warehouse. Nearly everything our product offered was different to how traditional data warehouses operated for the previous 30-40 years.
At first, customers didn’t believe our sales team. When they did, and they bought Snowflake, they tried using it the same way they used the traditional data warehouse we replaced. Just because you know how great your product is, traditional sales methods aren’t enough when offering a disruptive technology. You have to first educate prospects about what’s possible before you can explain how your product makes that a reality. Otherwise, a prospect will understandably dismiss you no matter how great your tech is.
To get started, do your research
Beyond individual customers, software companies can enter new markets that are growing despite global headwinds. Look at a country’s population growth, gross domestic product (GDP), and rising interest in the technologies your company offers. We at Snowflake take a good look at what the other cloud vendors are doing. How big are they in a potential new region? Do they have staff on the ground yet, and what are their revenues? We get a feel for the size of the cloud market and then we typically look for an anchor customer.
A lot of the time we’ll be selling remotely to those countries or often via partners before we establish a physical presence. Then we typically look for what we call an anchor customer, in other words, a big lighthouse client. So, that’s the mix—overall analysis, the market potential, pipeline, the presence and success of the other cloud vendors, and an anchor customer. At Snowflake, we consider all of this data before opening new offices or hosting Snowflake in Asia. Believe in the data and then go for it.