This is the first in a series of articles in which I will focus on the customer centric sales and marketing strategies required to successfully sell eDiscovery, Information Governance, Big Data analytic tools and cloud computing infrastructure into the enterprise. The first article will focus on the history of eDiscovery sales and the expansion of the target market for eDiscovery tools vendors from law firms and service providers to the legal and Information Technology (IT) departments within the enterprise.
It wasn’t that many years ago that litigation technology was performed almost exclusively by law firms and litigation service providers and included nothing more than a scanner that digitized paper documents so that the documents could be electronically reviewed for trial. The ultimate client (the entity that paid the bills) was the enterprise. However, there was actually a multi-tiered channel that included sales and marketing from scanning technology vendors to either litigation service providers or law firms and service oriented sales from the litigation service providers to the law firms. Please note that for the purposes of this initial article I am not going to address the relationship between corporate legal departments and their outside counsel as there was very little technology sales and marketing activity involved in that relationship. Legal departments sent matters to outside counsel based on their legal ability to manage these matters and not based upon their technical capabilities.
The Scanner Technology Sales Cycle
The sales cycle between the scanning technology manufacturers and the litigation service providers and the law firms was not particularly complicated nor long. Scanning technology was a commodity with very little technical differences between products and therefore the sales cycle was based primarily upon relationships. As such, the most successful salesman within this segment of the industry were the ones that developed and nurtured the best relationships. It wasn’t any more complicated than that.
The Litigation Service Provider Sales Cycle
The sales cycle between the litigation service providers and the law firms was also not particularly complicated or long. And although it was more of a regionally based service oriented sale than the scanner technology sale, litigation services were also a commodity and therefore the sales cycle was also based upon relationships. As such, the most successful salesman within this segment of the industry were also the ones that developed and nurtured the best relationships. In fact that are some epic industry myths that there was a contest among the litigation services sales professionals to see who would bring the best donuts every Friday to the secretaries of the litigation support organizations within the law firms. It wasn’t any more complicated than that.
The Technology Paradigm Shift
With the accelerating increase in the amount of Electronically Stored Information (ESI) over the past 10 years, scanner technology has gradually taken a back seat to what is now referred to as Electronic Discovery or eDiscovery. From a technology perspective, eDiscovery is the process of identifying, collecting, normalizing, analyzing, culling and reviewing potentially relevant ESI. These eDiscovery requirements provided the opportunity for a whole new group of technology vendors to enter the market. These new vendors developed technologies for ESI collection and computer forensics, Electronic Data Discovery (EDD) processing, Early Case Assessment (ECA) and Electronic Document Review. Consequently, this new eDiscovery technology and associated services created the need for the next generation eDiscovery sales professional.
However, since law firms and service providers were still the target market, many (if not most) of the new eDiscovery technology vendors hired (poached) the best sales professionals from the scanning manufacturers and the litigation service providers because they had the best relationships (books of business) within this target market.
Unfortunately, what many of the new eDiscovery vendors found out is that the sales professionals that they had hired from the scanning manufacturers and litigation service providers had great low level relationships within the industry (to successfully sell scanning projects) but had no technical backgrounds, no higher level relationships and no real professional sales skills to be able to successfully sell technology.
As such, many of these vendors found that their sales and marketing teams struggled with the technical aspects of this new sales cycle such as product positioning, developing use cases, communicating value and business buyers as opposed to users and competitive analysis. They also found that because their sales teams had sold almost exclusively based upon relationships, they did not process even the rudimentary sales process skills to respond to create meaningful forecasts, or navigate through and report on the status of a standard Solution Selling or Customer Centric Selling sales process.
These early times in the eDiscovery market were known as the Wild West as buyer’s within law firms and even litigation service providers didn’t understand eDiscovery requirements or reasonable pricing and therefore were susceptible to the promises of slick but most times unknowledgeable sales professionals regarding the capabilities of eDiscovery technology and services. There is no doubt that this was a very dysfunctional market. Nevertheless, as is the case with many other emerging technology markets, there was lots of wealth created for technology vendors, litigation service providers, consultants and even law firms as they rode the eDiscovery technology wave.
eDiscovery Technology Moving to the Enterprise
What was ironic about the sales cycles within the eDiscovery market as it evolved is that it was still a closed ecosystem with the majority of the transactions occurring between eDiscovery technology vendors, litigation service providers and law firms. In fact, there are some from within this ecosystem that would argue that there was nothing wrong because the technology vendors and litigation service providers were meeting the needs of the market and all parties involved were making lots of money. The problem was that no one was taking into account the needs of the enterprise, the ultimate end-user and the entity paying the bills for this ecosystem to exist.
As an example, it was not uncommon for an Early Case Assessment (ECA) vendor in this Wild West to charge a litigation service provider $75K to become a preferred partner and then charge another $750 per GB to process ESI. It was also not uncommon for that litigation service provider to mark up these costs as they performed services for outside law firms. And, in turn, it was not uncommon for the law firm to mark these costs up again when they billed their enterprise client. Everyone in the ecosystem made money at the expense of the enterprise.
That all changed with the downturn in the economy. Chief Financial Officers (CFO) of most enterprises worldwide began looking for ways to cut costs and stumbled upon the legacy methodology and outrageous costs associated with enterprise legal departments outsourcing the majority of their eDiscovery work to outside counsel and litigation service providers.
In an article that I published on June 7, 2012 titled, “2012 Study of Global 250 General Counsel on eDiscovery”, I pointed out that that top pet peeves of the General Counsel from the Global 250 over the past 12 months were:
- Annoying eDiscovery Vendor sales people = 65%
- Outside Counsel’s refusal to take responsibility on eDiscovery = 50%
- Lack of Support from Information Technology (IT) group = 50%
- Anyone that states that litigation in now all about technology = 75%
- Outside Counsel and LPOs Knowingly Low Balling Cost Estimates = 85%
- LPOs dropping the ball on eDiscovery Projects = 75%
- eDiscovery Cost Overruns = 75%
- Small Suits that Cost More to Process than Settle = 50%
And, the top frustrations of the General Counsel from the Global 250 over the past 12 months were:
- Cost of eDiscovery not declining as rapidly as expected = 95%
- Outside Counsel Not Providing Adequate Support for eDiscovery Requirements = 75%
- Dealing with eDiscovery Software Vendors = 80%
- Rapidly Changing Technology = 81%
- Increase in the Amount of ESI = 90%
- Legacy LPOs Not Providing Adequate Support for eDiscovery Requirements = 75%
- Lack of Understanding of Internal eDiscovery Requirements = 65%
And, I believe these frustrations have been boiling for a few years resulting in the enterprise exploring the options to bring eDiscovery in-house.
Selling into the Enterprise
Selling into the enterprise presents a whole new set of sales and marketing challenges that many of the eDiscovery technology vendors and litigation service providers were not prepared to address. They didn’t have marketing organizations that knew how to create messaging directed at the enterprise and they didn’t have sales professionals with any experience managing a complex customer centric technology and services sales cycle into the enterprise. In fact, it has been my experience that in some cases these organizations didn’t even know what they didn’t know. This fact is reflected in the results of the 2012 study of General Counsel from the Global 250 as 65% indicated that their top pet peeve from the past 12 months was having to deal with annoying eDiscovery sales people.
Selling eDiscovery technology and services into the enterprise requires an in-depth knowledge of the combined requirements and pains of the Information Technology (IT) and legal departments; including email archiving, Enterprise Content Management (ECM), document retention policy and implementation and Governance, Risk and Compliance (GRC) or Information Governance policies and systems. It also requires the skills to bring together many different stakeholders from these different and oft time disparate internal organizations, describe use cases and communicate value propositions to C level executives. It will also requires an understanding of the enterprise buying cycle including both procurement practices and contract negotiations. Enterprise buying cycles can be long and complex and therefore successfully selling eDiscovery technology into the enterprise will also require sales professionals that can document and communicate the status of these opportunities to their management and maintain the respect to be able to marshal the appropriate internal resources to support their efforts.
It wasn’t that many years ago that litigation technology was performed almost exclusively by law firms and litigation service providers and included nothing more than a scanner that digitized paper documents so that the documents could be more electronically reviewed for trial. The sales cycle during these early years was relationship based, simple and short. However, with the accelerating increase in the amount of Electronically Stored Information (ESI) over the past 10 years, scanner technology has gradually taken a back seat to eDiscovery and associated services and the target market has expanded to now include the IT and legal departments from within the enterprise. As a result, sales cycle have become much more complex requiring the skills of a much more sophisticated sales professional.
Some sales professionals have successfully ridden the eDiscovery wave from scanner technology to the current world of eDiscovery. However, many have not and therefore, in conjunction with some of the “sins of the past” the entire eDiscovery market has suffered from a lack of respect in the eyes of the enterprise. Therefore, over the next couple of weeks, I will be writing a series of customer centric sales and marketing articles for eDiscovery vendors and litigation service providers on:
- How to become solution-focused versus relationship-focused
- How to have situational conversations versus making presentations
- How to ask relevant questions versus offering opinions
- How to target business stakeholder and decision makers versus gravitating toward users
- How to relate product usage versus relying on product demos
- How to empower buyers versus attempting to sell to them
- How to diagnose before you prescribe
In addition, I will also be writing several additional articles on:
- Marketing positioning and messaging eDiscovery technology
- PowerPoint presentations that work
- How to use Customer Relationship Management Systems (CRMs) such as salesforce.com and Zoho CRM to manage a customer centric sales pipeline and create more accurate forecasts.
eDiscovery technology vendors have developed some very exciting technology that has the potential to be very valuable to the enterprise. However, until eDiscovery technology sales professionals learn how to successfully sell into the enterprise, many of these vendors and the associated service providers and consultants are never going to get the chance to even present these eDiscovery technologies to decision makers and actual buyers.