The 3 Most Important Questions to Ask a Potential Software Provider

If I were shopping for a new home and had a friend who’s a realtor, I would ask him what are the most important questions to ask and why!  If you are shopping for Party Plan or MLM Software, most likely you don’t have a friend who sells MLM or Party Plan Software to ask that question.  So, consider me your friend who sells Party Plan and MLM Software.  I have been in this industry in some capacity for almost 25 years and specifically in software sales for 10 plus years. I’m going to share with you the most important questions to initially ask a potential software provider. Pay close attention, because this information could save you time, money and headache down the road!  What you should be asking depends on the type of company you have: Start-up, Mid Cap or Large Established.  In future posts, I will cover Mid-Cap and Large Established Companies.

Your Greatest Fear as a Company Owner!

As a Start-up Company Owner, one of your greatest fears is choosing the wrong software partner. Choosing your software partner based solely on budget could be the beginning of your end. Not considering the long-term effects of that decision could spell trouble for your company. The number one thing to do before you talk to a software provider is separate your “Needs” from your “Wants”.  In most cases, the limitations of what a software provider can deliver or say they can deliver has a direct relation to how much you can pay.  When you ask a question regarding a feature or function you want, and the answer you receive is “yes”,  yes doesn’t mean included or Free.  There are many questions you will need to ask as the process proceeds, and this is where the conversation needs to start!

If you are a Start-up:

Initial cost is NOT the most important factor. Being able to clearly explain your product is key: how it’s being sold, how people join your opportunity, how your compensation plan works, how you plan to ship product, how & when you plan to pay commission & what countries and currencies you’ll be doing business in, all need to be included.  The software sales representative needs this information to assess the scope of your project and answer the questions you are about to ask.

ONE

Do you see a problem with any of my operational requirements, and is any of that custom?
Before you waste your time and their time, you need to make sure they can do what you need done! You need to know what’s going to be included, what’s additional and what’s custom. Keep in mind, there is always an additional cost involved with custom development.

TWO

What are your Fees?
It’s very important to know and understand exactly just what the monthly fees and one-time and hourly rates are. Your company is going to do one of two things: grow, in which case you will need customizations, modules and integrations with third parties (all of which will have an additional cost.) Or you’re going out of business.

THREE

Is there a Distributor or Consultant Fee Cap?
Software companies have spent millions of dollars developing and improving their platform. The two most important resources of a software company are developer and support member time! Just like you, software companies aren’t in business to break-even. When you are shopping for a software provider, please understand that you have two options as it relates to cost. Option 1, pay on the front-end: The initial cost in generally going to be higher, but cost far less over time. Option 2, pay on the back-end: If the initial cost is low and by low, I mean $15,000 or less you can except to pay more in fees and per member cost usually with no cap. As an example, the initial cost was $15,000, but there is no Monthly Distributor/Consultant Cap and you have 20,000 members at $2.00 each, plus a $1000 Monthly Hosting and Support Fee. Your monthly bill is $41,000. If you maintain that number of distributors/consultants, not including your initial cost your annual bill would be $492,000. You have the same scenario with Hosting, except your initial cost was $25,000 and your Distributor/Consultant Monthly Fee has a cap of 5000 at $2.00 each. Your monthly bill is $11,000. Your annual bill would be $132,000. You saved $360,000!