1 Igniting Cognite Sales: Understanding the Customer and the Competition Cognite Team Sales Meeting October 13, 2010 Facilitated by Glen McCandless

2 The Cognite Competitive Process Market environment and competitive landscape – Terminology and the LMS lexicon – Adoption cycle and implications LMS space vs. library automation space Target segment positioning and characteristics Cognite positioning: platform or application?

Cognite Sales Environment Rapid changes in school market –Rapid movement to digital: school library > digital portfolio –Pressure to re-engineer the instructional process (why?) –Administrators are seeking fewer, more meaningful relationships and value-added partnerships with suppliers Demanding, highly-competitive sales environment –Products and product-features blurred –Information overload: decision makers swamped with sales calls Follett’s new product portfolio of strategic offerings

The Technology Adoption Curve 4 15% Product Appeal Solution Appeal

Innovators: Technology Enthusiasts Motivation: Learn about new technologies for their own sake –Aptitude for technical information –Like to test new products –Tolerant of missing pieces Challenges: –Unlimited access to developers and tech support –Want it free 5

Early adopters: Visionaries Motivation: Gain dramatic advantage from a technology breakthrough –Great imaginations for strategic applications –Attracted by high-risk, high-reward propositions –Will commit to supply the missing elements –Want order-of-magnitude gains — so not price-sensitive Challenges –Want rapid time-to-market –Demand high degree of customization and support 6

Early Majority: Pragmatists Motivation: Gain productivity improvements through structured, predictable change –Astute managers of mission-critical applications –Understand real-world issues and tradeoffs –Focus on proven applications –Like to go with the market leader Challenges: –Insist on good references from trusted colleagues –Want to see the solution in use at reference sites 7

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The K-12 “LMS” Market: Where Are We? 9

How do you achieve high growth with complex technologies and product lifecycles? Attract pragmatists! 10 $ t Product Leader Sales Leader Market Leader

11 LibraryLMS Market Share Terminology Buyer Desired outcome Funding Sources K-12 LMS vs. Library Automation

12 Target Customer Positioning Use stories and anecdotes to clarify your sales message Identify and describe the most powerful “before and after” scenario for the primary user in terms of: New approach Enabling factors Pay-off

13 ApplicationPlatform Design StrategyProprietary Open Competitive StrategyPrice /feature Ecosystem StandardizationMultiple One Importance to overall system Helpful Essential Economic incentives focused on Buyers Developers Selling Applications vs. Platforms

14 Understanding the Customer Decision-making matrix Decision drivers The buying and selling process Implementation of instructional technology Preparing for success

User Owner Gatekeeper Ratifier Influencers Decision Makers High Involvement Low Involvement Interested in “looking good” and may have strong biases or opinion Interested in “big picture” and usually has veto power Interested in cost / benefit details and compliance – can’t say yes but can say no Interested in how the decision will affect his work– often subjective Buying decision matrix for instructional technology

16 Cognite decision-drivers External Internal

17 Evaluate Discover Analyze Verify Decide Implement District Buying Process (for mission-critical technology programs) Barriers may stall or block each step of the buying process

18 Buying Process Context: Textbook Adoption Process

19 District Selling Process Preparation, Tools, and Resources are Key to “Nailing It” Present Qualify Prove Refer Close Develop Prepare the right tools to remove barriers along the way X

20 Sales process for “mission critical” instructional technology adoptions Long sales cycle to reach full potential (district-wide adoption) Really, it is not a product buying decision… it is a commitment to implement a new approach to teaching and learning Multi-year, multi-step process to fully develop the account

21 Definitions Mission critical instructional technology: Multi- faceted program based on a clearly articulated theory of instructional delivery; designed to address complex teaching and learning problems. Implementation: A purposeful set of activities designed to put into practice a new instructional technology so the new program is used in such a way that independent observers can see and understand its value.

22 Exploring: Investigating the alignment of the new tools and approach with the prospective customer’s philosophy of teaching and learning. Developing: Learning how to use the tools and developing the skills to benefit from the new approach. Applying: Using the new tools and approach in classes with support (e.g., participating in additional learning opportunities and networking with the user community) Integrating: Adopting the new approach into the philosophy of teaching and learning Sustaining & Advancing: Impacting the learning environments through use new processes and tools Implementation of instructional technology by school districts Any individual or group of individuals may be at different stages of the process!

23 Preparing for Success Strategy Analysis Research Sell Return on Investment Your time invested at the top of the sales planning pyramid will have the greatest impact on sales

24 District Sales Preparation Decision Maker District U.S. Public Education Importance of your research Knowing about the potential customer, especially the people involved in the decision, is critical to your success.

25 Do your homework! You can’t bluff your way through. Research state’s education agenda and initiatives, political context, and issues Learn about district’s status, history, initiatives, news, organizational structure, leadership Research the people: so you know who to approach first. Identify “movers and shakers” Formulate your strategy; plan your meeting

26 Whoya gonna call? Begin process with an administrator who… Is involved in the buying decision Has a personal interest in its outcome Has adequate rank to affect the decision Has sufficient influence to affect the informal decision-making process

27 Whoya gonna call? Clues to look for during research phase: Track record: Was instrumental in the success of strategic initiatives and programs implemented in the district during the past several years. Current value: Their name is linked to a new initiative or important program for the district now. Network: Their name is linked to multiple initiatives and programs now, and has been. Inner circle: Regardless of their title, they enjoy high respect and connection to the formal decision makers

28 The Questioning Framework Use questions to establish your credibility and trust The questions you ask during a district sales call are formulated based on the research you’ve done – they give you “credit” for having done your homework. “Question layering” results from careful listening and developing your ability to unpack issues and dig deep into the challenges that the district leader faces. Conduct an interview with questions that allow the administrator to reveal problems that you may be able to help solve

29 Recap Doing research, preparation and having a sales strategy is the most important aspect for success at the district level. You will be more confident with: –Who to call on to begin the sales process –Questions to ask and issues to unpack –Your ability to establish trust and credibility

30 Recap When you sell Cognite, you are really selling behavior change and the commitment to an implementation process. The way to overcome obstacles is to anticipate them and be prepared with a response Many people influence district buying decisions, formally and informally. Important to build relationship and trust through honest communication and intense focus on the people who will influence a buying decision.