A bad sign when buying HR Tech - CEOs on sales calls

BY -

Phil Strazzulla

November 13, 2020

The other day I was having a conversation with an HR leader who was new to their role and trying to figure out how to build out their Work Tech stack.  Specifically, they were looking at a new technology to manage their benefits.

She had found vendor that caught her eye, but there was something in the back of her head, a gut feeling, that something was off about this company.

Without getting into too many details, she is a fairly seasoned HR pro who has bought many systems over time.  It’s not as though this was her first big purchase and she was getting cold feet.

Granted, she’s only been at her new job for less than six months, so there is pressure to do well on the first few big initiatives.  But, that wasn’t it either.

The thing that was setting off her spider sense was that the CEO had joined the two sales calls she had been on.

This doesn’t seem like that big of a deal.  In fact, it’s pretty amazing that the CEO is getting their hands dirty and jumping on calls with customers.  This is a sign of a product first company that will be a delight to use, and a customer centric executive team.  It is also quite common for CEOs to join calls for enterprise level sales.

However, her account would be worth around $10k/yr to this company.  She was self aware enough to realize she’s not that important to the growth of this vendor.  Why was the CEO on both sales calls, as an active participant, trying to get her to buy?

We were having this conversation over zoom and I started doing some digging.  As it turns out, the vendor isn’t doing great.  Here’s their employee graph:


A chart showing a large loss of employees.

The company also has some authentic sounding recent Glassdoor reviews that point to an organization that is failing.  They aren’t hiring, clearly people are leaving, and the CEO is involved with trying to land a $10k account.  The picture is starting to become clear now!

The challenge of listening to the right signals

I am personally looking at buying some software for our business right now.  It will cost us around $99/mo, which isn’t a whole lot to most vendors.  I was SHOCKED when the CEO of the company responded to my email to him.  I’d emailed him specifically because I wanted to use their software in a new way, but never thought I’d hear back.

He spent an hour on the phone with me, diving into technical details and walking me through how I could use this product.  Midway through I asked him point blank “I really appreciate you spending all this time with me and I’m loving this conversation, but I have to ask you why this is worth your time?”

He laughed and responded that with new use cases, he really liked to get on the phone to figure out if they should be building product specifically for this customer grouping.  That made sense.  He also told me they are a profitable $4 m revenue company growing at >100% per year.  That also made sense when I looked at their career site, LinkedIn company stats, and learned how other companies were using the product.

There is a lot of noise in the HR Tech buying process.  Maybe you get a bad sales rep, but the product seems great.  Maybe the legal team at the vendor is very disorganized, but everything else is smooth sailing.  And, maybe the CEO is on a sales call that really isn’t worth their time, but everything else checks out.

Any of these on their own are not worth killing a deal.  But when you start to see a story emerge from multiple signals like this, it’s time to walk away.  Before you do, don’t be shy about asking point blank questions to address your concerns.  If you get a rock solid answer without hesitation, you can continue confidently.  If not, it’s time to pursue other options.

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