Is Your Product Bought or Sold?

Seth Godin has written an insightful piece called Bought and Sold that starts with two wonderfully concrete examples:

Residential real estate is sold. You decide to sell your house, hire a broker and advertise and have open houses. The buyer gets the message and responds if interested.

NCAA stars are bought. The high school kids play their best football and scouts come and find them, court them and 'buy' their services.

It got me thinking about the way we sell Spanning Sync—or rather, how it's bought. Our model has been a simple one based on value: we provide a service we believe people will find valuable, charge a fair price for it after a free trial period, and then rely on our satisfied customers to share their experiences with their friends, family, and colleagues. That way no one winds up buying something—or rather being sold something—they didn't want.

So far the model looks to be working. We have yet to spend our first advertising dollar and yet we're on track to have 10,000 paying subscribers by Thanksgiving.

One could argue that we had little choice in whether to sell our service or simply let people buy it given our small size and low price point. Fair enough. But last week I spent time with SAP, one of the largest software companies in the world, and they've decided to pursue the "bought" model—which they call the "pull" model—in selling their newest and potentially most revolutionary product, SAP Business ByDesign.

So why does a company with tens of thousands of employees and billions of dollars in the bank decide not to sell its products and instead let people buy them?

To be continued…

Comments

[Tony Stubblebine]

I love simple insights like this. Somebody should make a list of simple questions that companies should know the answer to.