TOM INGRAM & ASSOCIATES, Inc.
High Impact Projects
A Newsletter About Solutions and Creating Exceptional Value
Software Company Narrows Focus from
1 Million Prospects to 40 – Closes 30 Sales
in First Year!
After 3 Years of Revenues Less than $2 Million, Sales Soar to $75 Million in 4 Years!
Systems Produce Paybacks for Clients of more than 10-to-1
Stopped Trying to Sell to Information Technology Department – Found Line Executives With An Urgent Need to Buy
CEO Found a Way to Reduce Risk and Capture Financial Upside
A Repeatable Pattern Emerges
Compiled by Tom Ingram, PMPi
Before Jeff Miller took over as CEO,
Documentum had suffered three years of flat
revenues, never exceeding $2 million per year.
After Miller took over, the next year’s sales
increased to $8 million, followed by $25
million, $45 million, $75 million and an IPO in
Granted, these were the boom years – but
this success story carries some essential lessons
which I have seen work in several other
settings over the years. Below is a summary of
these key lessons from several sources,
including a Harvard Business School case
None of this is easy. Documentum went
through a period when it was burning $1
million per quarter, with only $4 million in
cash reserve, and only two new customers.
Success in the intangible, “black magic” world
of software is difficult, and my hope is that you
can take some useful lessons away from this
summary. Following are some of the things that
worked for them.
Narrowed Their Focus from “everyone in
the world that touches complex documents” to
a “rifle shot.” Documentum chose to focus
initially on the regulatory affairs departments
of Fortune 500 pharmaceutical companies. This
narrowed their universe of prospects from some
500,000 to only 40 companies worldwide.
Urgent Need to Buy: Documentum was
able to identify buyers in extreme pain due to
the regulatory paperwork requirements for
submitting new drugs for approval. They
focused on finding prospects that were in a
situation where (1) regulatory requirements
created much pain, (2) prospects demanded a
solution and (3) the solution could represent a
Documentum closed 30 out of 40 initial
target prospects in the first year!
Help for Struggling Software Companies
TOM INGRAM & ASSOCIATES, Inc.
Huge Payback for Customer
Every day that was saved in drug approval
application time resulted in a $1 million
incremental profit for Documentum’s
The system reduced drug
approval application time from 1 year to
approximately six months.
Average profit per day of $1 million times
128 days saved = $128 million in
incremental profits per drug application. A
typical system might cost $4 Million –
Resulting in a 32-fold Payback!
Target Buyer: Documentum discovered
that their target buyer was not the Information
Technology (IT) department! IT departments
are often happy with the status quo – while line
executives are not. They also discovered that
executives and department managers were
really the ones that drove the priorities for IT.
Documentum stopped trying to sell to IT
department buyers and focused on line
executives with a problem and a budget. I will
add that I have seen this to be true in dozens, if
not hundreds, of instances in my 24 years in the
technology and software business.
The boom times of the ‘90s were a slight
exception to this rule. The IT department was
buying a great deal, and companies got used to
selling to the IT department. When reality
came crashing down upon us, and the techbubble burst in the early 2000’s, this aberration disappeared. I will note that this is an
extremely difficult shift for companies to make
because their sales force, including sales
executives, and even the CEO, often have
experience only selling to the IT...
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