I love a good kickoff meeting.
There’s so much potential! It’s a chance to get everyone on the same team to accomplish a common goal. It’s a chance to plant seeds for not only a successful project but fruitful relationships. It’s a chance to listen.
The kickoff meeting I was in last week? Hated it.
For context: it was an analytics overlay provider kicking off their software as a service (SaaS) engagement with a new client. They had just finished setting up the software and were engaging their users for the first time. The building operators, chief engineers, and property manager were all in attendance, ready to go.
Ninety minutes later, those potential users had barely spoken. The meeting was completely one-sided, where the software vendor was focused on the details and features of the tool. Nerdy details about potential energy savings opportunities they discovered, how each fault detection rule works, and how the users can customize the rules to their hearts’ desire. Ninety minutes without one single indication of whether or not the tool will actually get used by the team. Let alone how it will get used.
I left with this uneasy, underwhelmed, unimpressed feeling. I knew the meeting sucked, but I couldn’t quite put my finger on why. The next day, I interviewed my friend Tyson Soutter for the podcast (coming this Thursday). Something he said brought it all together for me. The reason for my dissatisfaction just clicked.
“Point number 2 is making sure you're selling something that has continued value. So if you sell energy savings projects with some sort of digital thing, what happens in year two and three, when you stop saving energy?
We’re in a cutthroat industry when it comes to (operational) budget. Capital expenditure (CapEx) is something that once you get that decision made, it's made and you get the project. Great. All is good. You don't have to revisit it that often, maybe to justify the cost once. But operational expense (OpEx)—that is a cost that you need to be able to show value year on year, every year.
If you save or add a huge amount of value to a customer (in) year one and add no value in year two and three, you're gone. They review their budget, they look at the line items on the OpEx, and they say, why are we spending money on this?”
Overlays are often sold on energy savings. It’s the go-to because there’s a hard ROI there. They’re also sold on nerdy features like connecting disparate systems or being easier to deploy than competitor X or Y.
But to be viable in the long term, an overlay needs to go beyond energy and nerdy deployment details. As Tyson says, you need to be able to show value, next year and every year. And if you’ve made it through the kickoff meeting and haven’t thought about how you’re going to do that—how you're going to become sticky—that’s bad news to me.
Stickiness is an icky word for a beautiful concept. As our industry transforms from project-centric to SaaS-centric, stickiness is the name of our new game. You only get so many chances to get it right—the longer you go without a stickiness strategy, the higher your chances of failure. If you’re a vendor, no stickiness equals churn. If you’re an internal champion for new smart building technology, no stickiness equals no progress: the software will collect dust on a virtual shelf.
Consider this though… stickiness is nothing new to our industry. You all know the old way to be sticky: lock the customer in and throw away the f*ing key. Proprietary protocols, programming tools, databases, etc. Those were all extremely sticky! But those days are over. When everything is software-based and the data is easier to open up, it’s easier to switch than ever before.
Even if the lock-in strategy is still viable in some situations, let’s agree that it’s no longer good enough. The market is becoming more results-oriented—smart building solutions need to drive more value because building owners and operators are being asked to do the same. They need to level up themselves, so their technology and service providers need to level up with them. Examples:
So if lock-in and stagnant results are dead and gone, what’s the new stickiness?
Luckily, that awful kickoff meeting is not the norm. There are plenty of examples of new stickiness to learn from. Let’s run through how other vendors are doing it, then walk through some examples. Here’s my running list of the new forms of stickiness:
In summary: add more value. Next year, do it again. That’s the new price of admission.
Some examples from the podcast and other recent conversations:
Outside of our industry, there are endless examples as well. Look at Spotify, who replaced my childhood hobby of creating mixtapes and burning them onto CDs. Despite my *mad skillz*, their playlists are just plain better and they keep getting better the more I listen. Then they added podcasts, simplifying my life by negating the need for a dedicated podcast app. Then, they started adding original podcasts that I couldn’t get anywhere else. And my SaaS fee has stayed the same.
I realize of course that this is easier said than done. Our industry just got into SaaS and is just getting used to buying it. We’re much more comfortable with buying/selling objects (like an elevator) or doing one-time construction or retrofit projects. Our SaaS adolescence (SaaS-olescence?) became clear to me several years ago, when I was helping a building owner implement an overlay software provided by JCI. The JCI salesperson who sold the SaaS contract didn’t stick around for very long—once he got a taste of selling software, he quickly changed back to selling RTUs and chillers. They’re easier to understand and easier to sell, he told me. Making that jump is difficult.
That’s because instead of selling a tool/product/project/device, selling SaaS is about selling an outcome. And that outcome is always shifting and getting more difficult year over year. But that’s also the beauty of it.
Let’s summarize. Becoming sticky is about three things to me:
When I think about it this way, there’s a spectrum from negative vendor lock-in and stagnancy and value in a single workflow or single data type to full enablement of anything the owner wants to do with the data and with all stakeholders.
You become more sticky as you move along the spectrum.
What do you think? What am I missing here? Have you been in meetings like that?
I love a good kickoff meeting.
There’s so much potential! It’s a chance to get everyone on the same team to accomplish a common goal. It’s a chance to plant seeds for not only a successful project but fruitful relationships. It’s a chance to listen.
The kickoff meeting I was in last week? Hated it.
For context: it was an analytics overlay provider kicking off their software as a service (SaaS) engagement with a new client. They had just finished setting up the software and were engaging their users for the first time. The building operators, chief engineers, and property manager were all in attendance, ready to go.
Ninety minutes later, those potential users had barely spoken. The meeting was completely one-sided, where the software vendor was focused on the details and features of the tool. Nerdy details about potential energy savings opportunities they discovered, how each fault detection rule works, and how the users can customize the rules to their hearts’ desire. Ninety minutes without one single indication of whether or not the tool will actually get used by the team. Let alone how it will get used.
I left with this uneasy, underwhelmed, unimpressed feeling. I knew the meeting sucked, but I couldn’t quite put my finger on why. The next day, I interviewed my friend Tyson Soutter for the podcast (coming this Thursday). Something he said brought it all together for me. The reason for my dissatisfaction just clicked.
“Point number 2 is making sure you're selling something that has continued value. So if you sell energy savings projects with some sort of digital thing, what happens in year two and three, when you stop saving energy?
We’re in a cutthroat industry when it comes to (operational) budget. Capital expenditure (CapEx) is something that once you get that decision made, it's made and you get the project. Great. All is good. You don't have to revisit it that often, maybe to justify the cost once. But operational expense (OpEx)—that is a cost that you need to be able to show value year on year, every year.
If you save or add a huge amount of value to a customer (in) year one and add no value in year two and three, you're gone. They review their budget, they look at the line items on the OpEx, and they say, why are we spending money on this?”
Overlays are often sold on energy savings. It’s the go-to because there’s a hard ROI there. They’re also sold on nerdy features like connecting disparate systems or being easier to deploy than competitor X or Y.
But to be viable in the long term, an overlay needs to go beyond energy and nerdy deployment details. As Tyson says, you need to be able to show value, next year and every year. And if you’ve made it through the kickoff meeting and haven’t thought about how you’re going to do that—how you're going to become sticky—that’s bad news to me.
Stickiness is an icky word for a beautiful concept. As our industry transforms from project-centric to SaaS-centric, stickiness is the name of our new game. You only get so many chances to get it right—the longer you go without a stickiness strategy, the higher your chances of failure. If you’re a vendor, no stickiness equals churn. If you’re an internal champion for new smart building technology, no stickiness equals no progress: the software will collect dust on a virtual shelf.
Consider this though… stickiness is nothing new to our industry. You all know the old way to be sticky: lock the customer in and throw away the f*ing key. Proprietary protocols, programming tools, databases, etc. Those were all extremely sticky! But those days are over. When everything is software-based and the data is easier to open up, it’s easier to switch than ever before.
Even if the lock-in strategy is still viable in some situations, let’s agree that it’s no longer good enough. The market is becoming more results-oriented—smart building solutions need to drive more value because building owners and operators are being asked to do the same. They need to level up themselves, so their technology and service providers need to level up with them. Examples:
So if lock-in and stagnant results are dead and gone, what’s the new stickiness?
Luckily, that awful kickoff meeting is not the norm. There are plenty of examples of new stickiness to learn from. Let’s run through how other vendors are doing it, then walk through some examples. Here’s my running list of the new forms of stickiness:
In summary: add more value. Next year, do it again. That’s the new price of admission.
Some examples from the podcast and other recent conversations:
Outside of our industry, there are endless examples as well. Look at Spotify, who replaced my childhood hobby of creating mixtapes and burning them onto CDs. Despite my *mad skillz*, their playlists are just plain better and they keep getting better the more I listen. Then they added podcasts, simplifying my life by negating the need for a dedicated podcast app. Then, they started adding original podcasts that I couldn’t get anywhere else. And my SaaS fee has stayed the same.
I realize of course that this is easier said than done. Our industry just got into SaaS and is just getting used to buying it. We’re much more comfortable with buying/selling objects (like an elevator) or doing one-time construction or retrofit projects. Our SaaS adolescence (SaaS-olescence?) became clear to me several years ago, when I was helping a building owner implement an overlay software provided by JCI. The JCI salesperson who sold the SaaS contract didn’t stick around for very long—once he got a taste of selling software, he quickly changed back to selling RTUs and chillers. They’re easier to understand and easier to sell, he told me. Making that jump is difficult.
That’s because instead of selling a tool/product/project/device, selling SaaS is about selling an outcome. And that outcome is always shifting and getting more difficult year over year. But that’s also the beauty of it.
Let’s summarize. Becoming sticky is about three things to me:
When I think about it this way, there’s a spectrum from negative vendor lock-in and stagnancy and value in a single workflow or single data type to full enablement of anything the owner wants to do with the data and with all stakeholders.
You become more sticky as you move along the spectrum.
What do you think? What am I missing here? Have you been in meetings like that?
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