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Confessions of an Ex

-
Enterprise Salesperson:
What I Really Meant When I Said ________.

By Doug Mitchell

Copyright 2008 All Rights Reserved©

West Des Moines, Iowa, USA • 515.309.1531 office • www.mitchgroup.com
Contents

Introduction ..................................................................................................................................... 3

Glossary ....................................................................................................................................... 6

Chapter 1: My solution is the one that best meets your needs ..................................................... 7

Key questions to ask your ESS ..................................................................................................... 9

Chapter 2: My solution does not require much of your company's IT resources ........................ 10

Key questions to ask your ESS ................................................................................................... 12

Chapter 3: My solution is supported well .................................................................................... 13

Key questions to ask your ESS ................................................................................................... 14

Chapter 4: My solution will save you time and money ................................................................ 15

Key questions to ask your ESS ................................................................................................... 16

Chapter 5: That will take 2…maybe 3 weeks to develop ............................................................. 17

Key questions to ask your ESS ................................................................................................... 19

Chapter 7: Here are my prices ..................................................................................................... 20

Key questions to ask your ESS ................................................................................................... 24

Chapter 8: Here are my contract terms and conditions .............................................................. 25

Key questions to ask your ESS ................................................................................................... 26

Conclusion ..................................................................................................................................... 27

Author Biography .......................................................................................................................... 28

Reviews and Comments ................................................................................................................ 29

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Introduction
The title of this book came to me as I sat in my home office planning the
strategic direction of my new business RentalMetrics. Each new idea
quickly summoned the "Make sure this is not an enterprise solution"
mental checklist. That is, I was checking to make sure I'm not building a
bloated, over-featured, and "dead before it starts" solution that would
inevitably be my undoing.

I've been down the enterprise solution rabbit hole a few times now.
Granted, all have been tremendous learning experiences including global
travel, nice hotels, and meetings with very interesting business people. But
I'm confident stating that the
Salespeople are not lying, enterprise solution sales sand
they are simply framing box is a place in which I no
longer wish to play. Please
the truth in a way that
accept that my irreverence and
closes the deal and sardonic commentary about the
provides a big payday. enterprise stems from my own
personal experience over the last
14 years, and I wouldn’t trade
that for anything!

I'm not suggesting that I’ve lived a life of lies. There are no perfect
solutions for the enterprise and never will be. It's up to the sales
professional to convince the target that she's got the best possible solution,
despite the facts. Is lying requisite? No. Salespeople are not lying, they are
simply framing the truth in a way that closes the deal and provides a big
payday.

My enterprise experience crescendoed when I was asked to write a
business plan asking for $1 million in venture capital funding. Thirty days
later...we had a cool million in the bank. We planned on getting 6-figure

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license fees and hefty maintenance. We'd grow according to the typical
Venture Capital dreamland numbers.

2000 2001 2002 2003 2004
Rev $ 50,000 1,000,000 5,000,000 20,000,000 IPO
we need amazingly $1500
Exp $ out of control to ramp low chairs who cares
Profit hemorrhaging
(Loss) cash bleeding breakeven sick cash cash out

It sounded great...but like many ES companies, we overestimated the
market size for clients willing to pay big fees. We had NO CONCEPT of how
much it costs to acquire enterprise deals. When a target in NYC says, "Can
you be here at 3PM tomorrow?" you say yes. That 1 hour in-person
conversation often cost in excess of $5k not including lost life minutes from
doing red eyes.

After 2 years of moderate success we were still hurting. When things finally
turned the corner, it was because we'd figured out how to:

Deliver smaller chunks of relevant content to small and medium
businesses
Deliver the content in a hosted environment
Deliver the content in way that required almost no set up and very
little ongoing maintenance for us or the client (i.e. automated
process)
Deliver the content for a monthly all inclusive fee that was attractive
to a much wider swath of the market

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It was just a bit too late. We'd spent the million bucks trying to become
the next enterprise sales company versus trying to deliver what the
market wanted. We took a buyout deal a few months later.

I learned more in those 2.5 years and with that $1 million than I could have
living 20 years in a Fortune 500 cubicle. No regrets.

After that experience, I'm sure you're thinking that my next gig would
surely be something outside the enterprise.

Nope. I jumped right back in again.

This time around I felt wiser. I was in a position to grow the next company
in two distinct parallel paths. I counted on revenue dollars from large
enterprise clients to fund development of a non-enterprise model. My role
quickly grew at the company and the high maintenance enterprise world
soon engulfed me...as it always does. Three and a half years later, I exited
the enterprise world yet again with the same issues: high prices, huge cost
of sales, ill defined target market, heavy IT resource demand, and a bloated
product requiring customization for each client.

This book is the summarization of my enterprise selling experience. In it, I
hope to shed some light on the truth behind the suit and tell you:

What I really meant when I said ___________________.

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Let’s get a few things clear before we continue to ensure smoother reading
and understanding of my abbreviations.

Glossary
Enterprise Solution (ES) A software solution that is typically sold as a site
license (e.g. Company X buys a single site license that allows them to run
the core parts of the solution on a single server. It may be helpful to
consider the site license as authorizing one single instance of software to
run on one server somewhere in the company's IT department) aka "The
Mother-Ship", with seat licenses for the users of the solution, aka "The
Satellites" and support sold as a percentage of the total software price, aka
"Payroll". The ES is often quite expensive to buy upfront. This upfront price
loading is where the ES software company recovers the immense cost of
sales associated with the ES including commissions, bonus payments to
company officers, investor dividends, and really nice cars for the President.

Enterprise Sales Person (ESS) Enterprise solutions are typically sold by very
nice looking people, often dressed in suits who are willing to fly anywhere
on a moment’s notice and are always "Going to be in your area anyway".
The ES is often supported by nice looking brochures that are so glossy; they
deflect even the strongest of coffee circle stains. Better ES selling
organizations send two people on the tactical assault mission: One suit.
One techie. The suit acts as translator when the techie (most often in
Dockers with a company logo button down) lays out something intelligent
for your consumption. That back and forth tech translation orgy is meant
to disarm the prospective buyer or baffle him sufficiently into writing a
check for the panacea product that will make his boss happy with him...or
close out the never ending 6-Sigma project from hell.

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Chapter 1: My solution is the one that best meets your
needs

When I said, "My solution is the one that best meets your needs," what I
meant was that I'm going to do my darnedest to shoe horn my product into
your world so that you'll buy my stuff versus the competitors.

Don't get me wrong, I really did have my eye on what’s best for you...but I
wanted to grow my business just like you. Our company didn't grow 60%
a year by sending you to the competition so you'd be wowed by their sales
team.

Enterprise software is SOLD not bought. The key is having enough of what
matters to you in my product to build a case for saying yes. I have told
some that my product is simply not for them. But, for most, I was certain
that if I stayed in the mix long enough I'd convince the target that my ES
was the perfect solution. Only in rare circumstances did I try to convince
you otherwise.

The ESS is not lying or mistreating you. Few organizations actually have
consultative sales people that conduct a real sales qualification process.
Thus, most are happy to talk to any company that expresses even slight
interest in their product (because that could mean a payday).

In my last enterprise role, I was blessed to work with a target market of 60
companies. I immersed myself into the target market and became an
"expert" in their pains...their issues...their change drivers. When you
bought my ES vs. Company X's, you did so because I "got it" immediately. I
spoke your language. I related to you and your teams issues when the
other guys just talked about technology or features.

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So was my ES the best one for you? If your relationship with me and the
product gave you what you wanted...then yes. Remember, you weren't
buying a product. You were buying the way that product would make your
organization run, the way you'd feel when your boss gave you a bonus next
quarter for saving 20% on your bottom line. You don't buy products
because they have this or that. You buy them because of what they'll do
for you and the ecosystem you operate within.

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Key questions to ask your ESS
1. What 3 companies are your fiercest competitors and what would
they say they do better than you? If the answer is, “We have no
competitors,” shuttle the ESS to the door.

2. The last time you lost a deal to your competition, what were the
main reasons given? If the response is snotty or the ESS attempts to
discredit the prospect that ultimately said no, be wary. She will
probably speak of you in these terms if you don’t choose her
solution. If you’re presented with truthful accounts, kind words, and
reverence for the “one that got away”, put a check box in the
credibility column. An ES cannot be perfect and certainly can’t be
perfect for everyone.

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Chapter 2: My solution does not require much of your
company's IT resources

When I said, "My solution does not require much of your company's IT
resources," what I meant was that with a 95% degree of certainty, your IT
department will be the biggest roadblock to success that we'll encounter in
this project.

Unless you're in the 5% of companies with an IT Director/Manager that
"gets it", we're going to run into rough spots as we sort through myriad
personality issues and resource snafus. "Get it" means that the IT Director
and staff realize the company does not revolve around them and the
gravitational field their large brains create. Also, we'll have to deal with the
"you ain’t playin' in my sandbox little person that has no idea how hard I
work or how many cockamamie software rabbit hole projects I get stuck
supporting" radar. The first reaction of the 95% is, "Here we go
again...another slick suit trying to add more work to my schedule". Be
warned. If your company suffers from this syndrome there is no cure
except removal of said IT Czar and that is unlikely.

The 5% are an absolute joy to work with. They understand they’re there to
serve the needs of the business with their IT services. They have quite a bit
of power within the organization and command large budgets. If you
encounter a rare "Five Percenter", treat them like gold. Send wine and
corporate trinkets regularly. Often Fiver Percenters associate with others in
this elite clan. They break down walls, make introductions, and bring you
into the inner sanctum of the IT community that gets things done without
claiming victim-hood. My pulse rate is actually up as I write this section
thinking back to some of my encounters with Enterprise IT leaders.

As I’ve mentioned my new business is distinctly outside of the Enterprise

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realm. It allows business people to say YES without answering to the ogre
in the subterranean lair. I find it much more pleasurable dealing with
executives, mangers, and field level folks trying to make progress
versus…well…you get the idea. I’m not anti-IT, just anti-Me dealing with IT
to get things done. Leave that to the enterprise folks.

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Key questions to ask your ESS
1. When (not if) you run into smoke screens, road blocks, and
obstacles thrown up my IT department, are you prepared to deal
with them and how? ES software firms with inexperienced project
managers and “yes men” are rampant. I’ve seen the same project
with identical variables take 5 times as long to execute because the
project manager on the ES side simply accept what they’re told by IT.
Make sure the ES provider you go with has the kind of take charge
project managers that expose IT grandstanding and “resource
constraints”. In my last enterprise experience, the technology
deployment (integration, testing, etc.) took 3 days of having the right
people made available. Typical deployment time however: 4-6
months.

2. If we cut through all of the crap, how much time does it really take
to deploy this solution, excluding training?

Chisel away at Microsoft Project Gantt charts with hours,
dependencies, etc. Most project timelines are inflated relics used to
boost the complexity, billing hours, and professional appearance of
the ES firm. I’ve not been involved with a project yet that even
moderately resembled the plan. Get to the bottom of what it will
really take to get this solution online. Be tough. Be demanding.

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Chapter 3: My solution is supported well
When I said that, “My solution is supported well and my company hangs its
hat on the best service in the industry,” what I meant was that when you
call, a human will pick up the phone and get on your problem right away,
delaying someone else’s due date for customized solution delivery.

The bottom line with custom software in the enterprise is that it breaks.
How many times have you rebooted today? A key factor in company’s
minds when buying software is how well it’s supported. If the software is
built well and you’re trained properly, you shouldn’t need support right?
Inevitably, something will misfire since enterprise software is very complex.
When you call and the person on the phone knows you have a real issue
(not a “did you turn the computer on?” type deal) he’ll drop what he’s
doing and get on your stuff while the other promised stuff waits.

You’re saying, “You mean you mean ES software companies don’t have
dedicated support staff!” Sure they do, but they get assigned to tasks and
projects just like the other custom development staff. Most enterprise
software companies’ make as much from customization as they do selling
their stuff. The custom development is paying salaries so the company has
the R&D money to plow into their “perfect rocket ship” solution.

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Key questions to ask your ESS
1. Do you have an automated system or a human system when I call
your support line? Human is better because they respond better
than recordings to emotional pleas.

2. What bug tracking or trouble ticket solution to you use? (It’s not as
important to know what the answer means vs. knowing they do have
a system of some kind other than MS Outlook or a white board.)

3. What your average time from call in to resolution? Just ask. Most
probably will have no clue but you’ll sound important. If the ESS
answers you with real data, respect him/her and move on.

4. What is your process for escalation? Translation: How can I bypass
the first few levels of support and get to someone that knows what I
need? Write down these answers and get names, phone numbers,
and email addresses of the escalation chain. When something goes
wrong, just ping the highest person in the chain and consider your
issue…escalated.

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Chapter 4: My solution will save you time and money
When I said, “My solution will save you time and
money,” what I meant was that your company will
probably achieve enough Return On Investment to
pay for the solution…but you’ll end up using 10%
of the what the solution can do and end up
frustrated after the honeymoon period.

Most ES solutions have evolved because complex
businesses have insisted that new features be
built as a condition of sale. “If you add the ability
for the system to calculate blah and integrate with blah…I’ll buy it”. Let’s
say today the solution has 100 great features that could impact your
business positively. You were sold on the few trigger issues that matter in
your ecosystem by the ESS. The other cool stuff used to sell this product to
management will probably never pan out.

After the honeymoon period of deployment, training, and initial ROI
calculation people adapt and stagnate. This process is similar to physical
exercise when gains in performance halt due to the body’s uncanny ability
to adapt. I saw this process unfold before my eyes again and again. Can it
be avoided? Yes.

To stave off stagnation and frustration be realistic about what functions
your organization will use. Then ensure that training is geared toward
those functions. Next, ensure that follow up training in system utilization is
scheduled. Choose real dates…not plans. In my 50+ enterprise deals a very
small percentage invested in ongoing training. Sadly training is where
companies save a few bucks. It’s not only important to debrief after 60-
120-180 days of usage. You must have trainers knowledgeable in your
business processes to know how your firm is using the system. These are
the best dollars you’ve spend.

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Key questions to ask your ESS
1. What percentage of features in this system do your clients typically
use? If the number is higher than 60% I’d revisit the numbers used
to calculate your ROI. Is the ESS being liberal in applying savings
numbers to certain features that will likely not do anything for you? I
hell stress realism here. No matter how badly you hate corporate
green screen system X, the new system won’t make you a hero if it
can’t live up to its promises. (Only this time, it will be your fault if it
blows up).

2. If I want to reduce the training required by half to save money, will
you let me? Hope the answer is no. If the ESS allows this to shave
dollars off the price, think twice. I believe the following formula
holds true:

Increased investment in ES training = chance of success²

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Chapter 5: That will take 2…maybe 3 weeks to develop
When I said, “That will take 2 maybe 3 weeks to develop”, what I meant
was t I really don’t know how long your customization will take so I’m
throwing out a number that will get you to bite…not balk.”

Toward the end of my enterprise career, I had learned that NO deal was
better than ANY deal involving open ended customization, undocumented
promises, and failure to meet expectations. I would not agree to sell a
solution until the potential client agreed to have the tech folks “spec out”
the requested customization (NOTE: Desperation for closed deals often
clouds minds’ ability to say NO). The process of documenting
customization always leads to twists and turns that would have gone
unaccounted for 100% of the time. TRANSLATION: Price too low and
project unprofitable in every single deployment.

The specification process is where
developers and project managers
asses resource requirements to deliver
the desired outcome (new feature,
integration, look and feel). This is an
investment for the ES firm. Just
getting a price requires time (money).
Of course it’s in the ES firm’s best
interest to provide this if they believe you are legitimate and qualified
prospect.

Much of the pain during this phase exists because the ESS has not done
proper prequalification. Nothing is more frustrating for the ES firm than
delivering a five page customization quote to find that the quote for
customization is more than the prospect budgeted for the entire solution!
It makes me wonder if anyone asks, “Hey, do you have a budget for this?”
anymore.

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Smaller ES firms really want your business. If the delivery dates of complex
customizations seems unrealistic…even to you, they probably are.

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Key questions to ask your ESS
1. What is your process for documenting change requests? Let the ESS
speak. Listen closely to see if they’re making up the process on the
fly. There should be some kind of form that requires sign off from
both parties, etc. Quotes thrown out during a sales pitch are usually
designed to speed the sales process, not get your needs satisfied.

2. If your development efforts fall behind schedule, what’s my
compensation? We set dates for a reason. Some are arbitrary.
Some are absolute musts. If the ES firm falls behind (and it will), you
need to know that this matters and that something happens besides
conference calls and placation.

Estimated time provided by ES firm X 2.50 = actual delivery date

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Chapter 7: Here are my prices
When I said, “Here are my prices”, what I meant was “My price is totally
flexible and within reason I’ll probably say yes to lowering them because we
need your upfront money and recurring revenue more than I need my
pride.”

Pricing ES solutions is far more art than
science. Often it’s more about
discovering the target’s pain tolerance.
Too high and you’re shown the door.
Too low and those “big dog” clients will
laugh you out of the building.
(Yes…there is such a thing as too cheap).
Most skilled ESS’s begin high and move lower as they discover more about
the client’s price pain/tolerance. That model is inefficient and wasteful. It’s
also the most prevalent methodology in the market.

Often times the pricing configurator (most likely a spreadsheet with lots of
nifty variables and options) is specifically designed to flummox you into
spending more. This tactic is also critical to the ESS’s ability to charge you
LESS without actually telling the greater industry that her employer will
take what they can get for the solution. In one of my ES tours of duty, I
fought the company owner constantly on the pricing model. I took all of
the “features” and “add-ons” and simply wrapped them up into a single
price. Then, I discounted that price. Done. This left my variable pricing
component as “Number of users requiring support.” This worked because
it didn’t put the client in the position of feeling nickel and dimed. It
comforted them to receive every possible benefit the software had to offer.

Using Software as a Service (SaaS) has become far more attractive to the
enterprise. So have “all inclusive pricing” models. Even if your solution is
not hosted the model can be adapted. During the last couple of years

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before starting RentalMetrics, I found target clients excitement about a
fixed price model escalating. I was encouraged to wrap up XX number of
users into a fixed monthly investment inclusive of support, updates,
upgrades, etc. Not only does the model increase the short term cash flow
of the ES firm…it allows the client to budget accurately for the next XX
months.

The hosted application world has really begun to take hold in the
enterprise. IT departments are working through their security concerns (in
many cases getting over themselves) and deploying hosted apps
successfully. My counter to the security concern with 3rd party hosting
situations usually falls back to the “Lost Laptop Syndrome.” How many
times have we heard that 50,000 clients from Mega Banking Corp., U.S.A.
had their personal information compromised by a lost laptop? Compare
that to how many times your hosting company or software solution
provider has been hacked with the same result. I’m sure it’s
happened…but I’ve not heard of it.

Another pricing model that doesn’t work often is the Percentage of ROI
model. In this model the target client will be asked to pay a Deployment
Package price upfront. Then after agreeing on metrics for success or
failure, an agreement is struck on what percentage of savings will be given
to the ES firm and for what duration.

We’ll pay you $20k up front and 20% of the dollar savings
we receive as a result of deploying and using your ES.
We’ll judge the savings numbers on reduced overtime and
gasoline expense.

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Example Pricing Configuration Tool

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Note that the deployment package price is a cost covering maneuver. The
ES firm won’t take a chance on losing money on a deployment because
they’re overcommitted and behind on custom development. If they go for
the percentage of ROI model after pummeling the ESS into saying YES, be
warned. That probably means that cash is tight and they’re saying yes to at
least get your deposit for cash float. Bad.

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Key questions to ask your ESS
1. “How much does the solution cost?” If you get an answer in the first
meeting before the ESS has asked you a bunch of qualifying
questions …be afraid. Be very afraid. The salesperson that gives you
a price on an enterprise solution without knowing what you’ll
actually buy is dangerous. I have used the “It costs anywhere from
nothing to (insert ludicrous price here) but price is completely
irrelevant at this point compared to my need to discover what my
solution can do for you.” I’m not sure if that’s correct in sales guru
circles…but it deflected the question. Don’t focus on price. You’d be
surprised how inexpensive some software solutions are relative to
their savings for your company.

2. “What’s the typical payback or return on investment you’ve
measured when companies like mine have deployed your solution
and can you provide me case studies? This question is designed to
see how your ESS thinks and what experience he/she has in
quantitatively assessing results. This question will demonstrate how
serious the company is about results. Firms without real case studies
typically don’t conduct business the way you’ll want to. I’ve worked
in places where these did not exist. It should be a first step rather
than a marketing afterthought.

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Chapter 8: Here are my contract terms and conditions
When I said, “Here are my contract terms and conditions”, what I meant
was “This is pretty much a boiler plate agreement that no one reads so if
you challenge some terms…you’ll probably get what you want.”

Most small to medium ES companies don’t have
in house legal representation. In fact, most don’t
leverage outside legal help either. Instead they
opt to purchase agreements online or worse, just
rip a legal doc from some Google search.
Perhaps they even steal a competitor’s
agreement and tweak it to match what they
believe makes sense.

The bottom line is that most ES firms don’t even know what the terms in
their own contract mean. If something appears strange to you or is
unclear, challenge it. Don’t be afraid. You’re the target that the ESS is
attempting to separate from his money.

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Key questions to ask your ESS
1. “Is this agreement flexible and negotiable?” Who knows if you
need to change terms, but inflexibility in contract terms could be a
bad omen.

2. “What’s the one contract term that clients challenge the most?”
This can start a great conversation. The collaborative ESS will be
honest and give you hints as to what you might consider. If he/she
says the agreement usually goes through like a greased pig, dig
harder.

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Conclusion
I hope you’ve taken some lessons and tools away from this book. Although
the enterprise is not a place I’d like to be now…it was an excellent proving
ground. The enterprise teaches and holds valuable lessons. If you’re a
college graduate and don’t have a career path in mind, I’d highly
recommend you spend time in enterprise sales and marketing. But take
notes! You’ll soon identify much of what I discussed on your own.

If you’re being courted by an enterprise software firm, don’t show them
your “Guide to causing them emotional trauma” until you’ve signed the
deal. Then pass this book on. Let them in on the secret.

The enterprise model has a purpose and is needed…but its value is
shrinking. Technology has opened the door to myriad software applications
that empower business and require far less developer expertise. I’m able
to do things today in publishing, websites, blogging, form creation, survey
generation, and database management with simple tools that required big
money a few years ago.

Remember that enterprise software is sold…not bought. They key is to be
sold the right solution by the right company and the right salesperson.

Cheers!

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Author Biography
Doug Mitchell lives in Des Moines, Iowa with his family. Doug escaped the
coastal rat race in 2005 by executing Geographic Arbitrage. That is, he sold
his California home and began working remotely from the heartland
reaping its economic and social benefits.

Since 1999, Doug has largely been in leadership roles with startup software
firms. In late 2007, Doug hung his shingle on RentalMetrics. RentalMetrics
is a management consulting firm serving the construction equipment rental
ecosystem. The company boasts an innovative subscription based
“Independent Learning Environment.” (ILE) This ILE provides project
management tools, templates, product research, analysis, and interviews
with industry thought leaders…all produced in a rich media environment.

The RentalMetrics ILE exposes even the smaller rental or construction
company to the high power tools often reserved for industry heavy hitters.
With weekly updates and additions by RentalMetrics research engineers,
the ILE is designed to be a lifetime subscription with an ever greater value
proposition over time.

Doug Mitchell maintains a personal blog where he muses on business,
family, and life in the Midwest at Moments of Clarity.

The Mitchell Group, LLC
6750 Westown Pkwy #200
PMB 330
West Des Moines, IA 50266
515.309.1531 office
doug@mitchgroup.com

www.RentalMetrics.com
www.MitchGroup.com

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Reviews and Comments
Doug Mitchell’s Confessions exposes the realities of buying and selling
enterprise software in a humorous, straightforward way. He dispels any
remaining notions that the process of selling enterprise solutions is done on
the up-and-up and translates the vocabulary of the enterprise salesperson
into something the buyer (“target” in sales-speak) can understand and,
more importantly, act on. The list of questions he suggests that the buyer
use is the real goldmine here. With them, Doug helps the enterprise
solution buyer unmask the salesperson on the other side of the table and
avoid many potentially expensive pitfalls in the acquisition and the
implementation of large systems.

--Will Herman, Former CEO of way too many companies to list,
Corporate Director, and über blogger.

“Confessions” was very insightful and full of topics to really make one
think! Great job of putting your ideas and thoughts in writing regarding the
Enterprise Solution market!

-- Malcolm Goodwin, CEO, PromiseIT Solutions, Inc.

Mitchell offers up insider insight into the well-guarded minds of Enterprise
Solution salespeople, insight that just might end up saving your enterprise
from a million dollar mistake.

-- Brett Trout, Attorney, Law Offices of Brett Trout, P.C.

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States
License