Article
Rules for running a sales "proof of concept" - by Mike Marg
earlygtm.substack.com
Quoted on this wiki
Every place a page here uses this source, in the order the words come in it.
“Would it be ok if we ran a proof of concept first?” “before your early customers feel comfortable buying, they may ask you for a proof of concept (we will also refer to this as a “POC” for short.)” It’s very easy (and may even feel natural) to excitedly agree to whatever your early customers ask for in order to sell your early key deals. Giving away a proof of concept too easily is one of the most time consuming (and thus, resource and money consuming) mistakes you can make as an early founder or sales leader.
You should never grant a POC to a champion without them having full decision maker buy in. Before giving a potential customer the “keys to the kingdom” you need some assurance that you’re working with the person who can sign the contract, or at the very least, this person is committing that the decision maker is ready to move forward if the POC is successful. “Sometimes, decision makers will want to prove impact in a proof of concept. Meaning, I want to PROVE that our team was more productive with your product, that your product drove a meaningful amount of new leads compared to the old way, etc.” You should never allow ROI to become part of your POC success criteria. First of all, a few weeks isn’t nearly enough time to predictably prove anything, so that means you’re just taking a massive coinflip risk on something that is unlikely to work out the way you want.
This may not be applicable if you’re super early stage, and it is not applicable if a POC happens to be a necessary part of every single sale cycle you run. But at some point, you should not allow sellers to unilaterally decide to grant a POC as a one off. You should have some criteria in place, or an approval process, where a head of sales would need to approve POCs. “This forces sellers to actually think through the purpose of the POC, and first conclude “I can make a strong case for why this POC needs to happen.”” If the prospect doesn’t value the proof of concept, there is a strong chance that they will forget to start it, get distracted, etc. - and a few weeks can easily turn into months of intending to trial.
First, your customer should understand that you only do POCs for customers who are [far] more likely to buy than not. The purpose of a proof of concept should be, very specifically “(a) the customer refuses to buy the product without trying the product first, and has a valid reason for needing to validate the way the product works” (b) the customer agrees that they expect to buy at the conclusion of the POC if all their success criteria are met. I can’t emphasize this point enough. Just like “coffee is for closers,” POCs are for legitimate, expected buyers, not people who are still on the fence.
If the prospect doesn’t value the proof of concept, there is a strong chance that they will forget to start it, get distracted, etc. - and a few weeks can easily turn into months of intending to trial. “Before you launch a proof of concept, you and your prospect should sit down and map out the exact things they’re looking to test.” I think of this a “microcontract” - microcontracts are little agreements or trades throughout the sales process that help you drive accountability.
If the prospect doesn’t value the proof of concept, there is a strong chance that they will forget to start it, get distracted, etc. - and a few weeks can easily turn into months of intending to trial. “Before you launch a proof of concept, you and your prospect should sit down and map out the exact things they’re looking to test.” I think of this a “microcontract” - microcontracts are little agreements or trades throughout the sales process that help you drive accountability.
The bottom line is this: if we prove all the specific things you want to approve, I need to know that you’re planning to buy. The worst possible outcome would be proving all the success criteria, only to have the prospect back away from purchasing. That means you wasted your time. “If a prospect wants to tie the success of the POC to a certain level of ROI, a strong seller would push back and explain that it’s unrealistic to prove ROI after 3 weeks.” A lot of times in sales, you must be willing to go all in on a belief, and risk losing the deal as a result. This doesn’t mean you should be irresponsible- it just means that if you allow certain conditions, you’re so heavily handicapping yourself from ever making a good sale that it’s not worth it.