Artificial Intelligence is one of the most exciting areas of B2B software at the moment so it must be easy to sell, right? Well, anyone who has worked in AI sales or marketing will tell you that it’s a challenge. Some AI companies try to sell the impossible and more and more often buyers expect the impossible. But setting aside these very high level challenges there are some simple reasons why AI sales fail and some traps to avoid.
Why AI Sales Fail: The POC/Pilot Trap
This is a common challenge. You work for a small AI company and a large company wants to work with you. This is great but they want to start with a free POC. Maybe you’re tempted by their argument that it’s an investment on your behalf, but don’t fool yourself, it’s not. It’s a trap!
Companies ask for free POCs when they don’t understand the value of the product and want to test it out for specific use cases. POCs and free POCs in particular are a failure of marketing. I see this all the time, AI companies that describe themselves as “Machine Learning-Powered AI software to help your company leverage Big data”. Apart from being almost entirely buzzwords, what is this saying to a potential buyer? They don’t know what you do, what problem you solve or even how to use you.
Instead, AI companies that focus on specific business problems, saying for example, “we solve problem X, by leveraging state of the art AI”. Now the buyer has a sense of your value to them.
Have You Fallen into an AI Sales Trap?
Why AI Sales Fail: The Consulting Trap
The AI software company that sells more consultancy services than software is one of the most common occurrences I’ve come across in AI. It’s related to the POC trap in that it relates to lack of focus.
Generally, it starts out with a big company asking you to apply your tools to a new use case, so you need months of development to make it work. But before you know it you’re growing your consulting team to do bigger and bigger professional services projects. There are a number of ways around this. A vibrant ecosystem of managed service providers is a good first step, but the bigger answer is to specialise and try to work on repeatable projects so that each time you do the project, the fewer hours/days of consulting you need.
The AI Marketing Trap
We’ve touched on this in the two previous points but many of the sales problems in AI start-ups are really marketing problems (and I say this as a former Marketing Director in an AI start-up).
Too many AI companies are using marketing that is either too techy or too vague. Marketing that is too techy won’t be understood by potential buyers and vague marketing will lead to projects that don’t fit with your targeted buyers (and generally more consulting). It makes sense to take the time to define WHO you’re trying to sell to, so that your marketing can build personas and generate marketing materials targeting those potential buyers.
AI Sales is tricky at the best of times and it’s made even more of a challenge with tighter budgets in the post COVID era. AI companies needs to refocus their value proposition on solutions to problems instead of on “cool tech” and need to look out for these three traps!