Understanding Software Sales from the Tally Experience
Understanding Sales from the granddaddy of Indian Software, Tally
It is safe to say that Tally is the grand daddy of all Indian Software Products, the only company to have discovered the holy grail of selling software to Indian small businesses at scale.
So when one of the key architects of the Tally sales network, Deepak Prakash (Tally employee #3) came down to Mumbai to do a iSpirt Rountable, there was little chance I would miss this. And Deepak Prakash did not disappoint.
In typical Delhi banter, Deepak walked us inside the mind of a top performing sales executive and how the goals of an entrepreneur and sales person, while contradicting from the outside can be wonderfully complementary if managed right.
In the era of online marketing and social media, old world sales seems like a relic of a bygone era. But not in India. In a country full of contradictions, traditional sales still has its charm and companies that want to sell in India, must understand the nuances.
The most recurring theme Deepak’s talk was Empathy. The ability to listen and ask good questions. This applies to both, the relationship between the customer and the sales person and the sales person and the entrepreneur.
Deepak talked about the importance of knowing the sales person and making sure their aspirations are aligned with the company’s aspirations. If the aspiration of the sales person is to buy a car or buy a house, then the person must be able to see that this job will be able to fulfil these aspirations.
Aspirations of changing the world have to be translated to the sales person. Being in sales is a crushing job. Most of us a wary of sales people and feel they are intruders. Hence it is very important for someone who is managing a sales team to constantly boost the ego of the sales person, It helps to keep up the “shabash” and back slapping.
If the sales have not been good, its not a good idea to bring it up the first thing in the morning. Mornings should be positive. Its best to have an evening call and close the day’s issues.
Once the sales process is stable and repeatable, it is important to standardize it. Deepak calls it productising the sales.
Getting the words right is very important. It is necessary to always talk in the language of the customer. While calling the customer to renew, saying that “their account is going to ‘expire’” can send wrong signals. Avoiding use of jargon, having a clear pitch and script was at the heart of the sales process. A good sales person is always well prepared should never be in doubt of what to say in any given situation.
One of the key learnings for most of the fellow startups was market segmentation. Deepak shared that they way Tally attacked a new market. For example if they were targeting automobile dealers, they would first have have their own sales people break into 10% of the market and once the network effects started, i.e., they have enough references and word of mouth going, they start handing it over to a reseller or partner network.
In Deepak’s words “I will eat the elephant, but piece by piece”
At one point, Tally realized that it was impossible to keep growing the sales network. Not only was it expensive, it was also difficult to mange large sales teams. Hence it was imperative for them to start building a partner network. The first Tally partners, were the customers themselves. Tally trained the partners with their standardized sales processes so that they could in turn pitch the customers. Their loyalty to the partner network is such that even for each online license sale, their partner (as selected by the customer, or nearest) gets commission. On being asked, when was the best time to start a partner network, Deepak answered, when there was a repeatable (productised) sales process.
While the going was good Tally opened sales offices in London and Singapore, but they did not turn out to be successful. But Tally was doing some organic business in the Middle East. To learn about the market, they had hired a top consulting company. While they shared a lot of insightful data, their final advice was that this market was not worth entering.
But Tally saw that they still sold in the Middle East despite not having a sales focus. So they went against their advice and setup an office in Dubai. When they looked closely, they realised that most of the accountants in the Middle East were of Indian origin and they were responsible for bringing Tally into the Middle East.
Once this was established, Tally went aggressively pitching their “no accounting codes” strategy and product tweaks for the local market (like flexible accounting periods and 4 decimal places).
There were many other topics Deepak touched upon like hiring (good sales people are great listeners), Tally’s approach to piracy (don’t inconvenience the customer), managing targets, bringing in influencers (charted accountants in case of Tally) and being clear of what you want (Tally was clear they did not want to go for enterprise customers).
Some of Deepak’s stories reminded me of the Jagdeep Sahni scripted “Rocket Singh, Salesman of the year”, which I think is a brilliant, highly underrated Indian movie for startups.
The Key to selling software to SMEs in India
One of the things Deepak wanted to share with the startups, something that Bharat Goenka, the founder of Tally has also spoken elsewhere, is that the buying patterns of small businesses in India are like enterprises in mature markets.
They are used to being sold things rather than they pro actively going and buying stuff. Deepak wants to warn software companies (and their VCs) that they need to plan for scale (more than 10,000 customers). This is not a market for half measures.
While the session was delightful and insightful, I don’t think startups should try and emulate what worked for Tally.
Tally was a product of an era where there was no internet and software adoption was in its infancy. They succeeded because they had the right strategy, risk apatite and execution for the market they wanted to succeed. Also once they hit critical mass, the role of the sales person was only to ensure availability, because the customer already knew they they wanted Tally.
There is a reason the roles of travel agents or insurance agents is shrinking every day. The internet is a wonderful for discovery, learning and distribution of software and startups should go on this path. While sales may be necessary for enterprise, it is too expensive for small businesses.
We understand that today, the Indian small business may not be ready to buy without being sold to, but this is changing fast. We are happy to wait and perfect the online game, so that when the markets open up, we have to most compelling offering ready.
Postscript: It was great catching up with some of the other software companies based in Mumbai.
I want to thank Shiraz Ahmed of ITAZ for sharing some of his learnings that were relevant to me. Also special thanks to Avinash and the iSpirt group for keeping this going, Sandeep of Emportant for setting up the roundtable and Anshulika of Wishberry (another inspiring Mumbai startup) for hosting the event.
Rushabh is a software developer and founder of ERPNext. He usually writes about the startup experience, open source and the technologies he is working on.