Over-Promising + Under-Delivering = Customer Dissatisfaction
How Oracle Nearly Self-Destructed
During the earlier portions of the 90’s, Oracle was in turmoil; The company had grown 100% YoY for 13 straight years, and there was a lot of pressure on its sales people to continue to close enough deals every subsequent year to maintain this impressive growth trajectory.
100% YoY is not terribly difficult for a young enterprise company with a few million dollars in revenue, but for companies with $100 million+ in revenue, maintaining such a growth rate is extremely difficult. Oracles’s sales people naturally became extremely aggressive and got into the terrible habit of over-promising, they sold prospects on features and products that did not exist with unrealistic targeted shipping timelines. In 1990, the company was at the center of an accounting scandal, and in 1991 Oracle experienced its first fiscal loss. The company’s games had finally caught up with it.
To regain customer confidence and to ultimately get Oracle back on track, Larry Ellison had to fire a significant number of long time executives and put the company through massive re-organizations across the board. Oracle survived, but many others from the era who over-promised were not so lucky; Customer trust is one of the hardest things to regain once lost.
Today we are still seeing sales teams overselling vaporware and giving unrealistic delivery timelines to customers simply to close deals and meet sales targets. This is of course very short-sighted, because repeat business outweighs all else, and dissatisfied customers don’t convert easily to repeat customers, especially in a SaaS world where customers don’t necessarily have to commit to long term contracts and where migration time & costs are drastically reduced in comparison to the on-premise model that was the norm not too long ago.
In enterprise companies, feature teams have a prioritized backlog of features phased out to be delivered in over certain projected timeframes, the sales teams are not necessarily always in sync with the feature team’s backlog prioritization.
Sales teams need to be constantly aligned with the product owners on feature teams, if there is a big prospect that cannot be closed unless a specific feature is delivered in a specific timeline, this should be communicated to the product owner who can then figure out how to move things around in the product timeline (if possible) to align feature delivery timeline to the customer requirements.
Product teams cannot necessarily always give prospects & customers what they want exactly when they want them, because the product owners have a limited supply of time and man-power with which to attempt to fulfill an unlimited number of customer request, but rather than over-promising and under-delivering, it is better to clearly communicate realistic timing projections and if possible also communicate the reasoning behind such timing. This builds customer confidence and tends to pay off in the long term.