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How long does it take before a newly implemented, empty database becomes useful?
What’s in This Article for You?
- The Empty Kitchen: A Story
- The Challenge: Starved for Data
- Zero Is Less Than Zero
- Breakeven: The Tipping Point
- To Breakeven and Beyond!
- Winning the Business and Generating Reference Customers
The Empty Kitchen: A Story
Most of us accumulate and stock our kitchens slowly over time as we move away from our parents’ houses and launch ourselves into adulthood. Herbs and spices, canned goods and pasta, refrigerated staples, and seasonings and sauces are typically collected over time, often taking months or years.
Imagine what it would be like to encounter an entirely empty kitchen…!
After living in Switzerland for two years, we returned to our home in California. The folks renting our house had moved out a few weeks before our arrival and, as previously agreed, they had completely removed all food from the premises. The fridge was totally empty: There were no sauces, no jams, no jars, no food of any kind. The shelves were equally bare. Even the spices and herbs were all gone.
Without any food, our kitchen, while complete in terms of appliances, pots, pans, tools, and utensils, was effectively useless. It had potential, but that potential could only be realized once we had re-stocked it.
Our first few uses were simply reheating restaurant leftovers and take-out meals. It took several trips to our local markets to put food on the shelves, literally! And it was only once a set of basics was accumulated that we were able to really use our kitchen to prepare meals. That represented a breakeven point: cooking in our kitchen vs going to restaurants and buying take-out meals. Several weeks went by before things were back to our pre-Switzerland inventory
It was a significant event in our lives that holds strong memories!
The Challenge: Starved for Data
Empty databases are like that empty kitchen. Lots of potential, but without food to cook you’re going to have unfilled stomachs! Similarly, an empty database leaves your customers starved for data.
CRM systems, AI tools, inventory applications, knowledge management systems, business information management platforms, and related software all depend on the quantity and usefulness of the content in their databases to provide value to our customers. AI systems typically need at least two databases: One that serves as a training set and a second source for analysis. A database needs to contain a significant amount of data to be useful!
How long will it take before the value is realized? Are there mechanisms to speed up the process?
The time from licensing until achieving pragmatic, day-to-day use of a database generally depends on the amount and utility of the data in the new database. The Database Breakeven Point, the point at which a growing database becomes truly useful, is a remarkable tipping point for achieving vendor and customer objectives.
Zero Is Less Than Zero
What help is a Yelp, Amazon, or Google Maps record that lacks any reviews? If you are trying to compare a business or product vs other options that have multiple positive reviews, the zero reviews entry doesn’t stand a chance! Similarly, an item with just a couple of positive reviews is suspect, particularly in comparison with alternatives that have dozens!
A freshly implemented empty database offers no value (since there is nothing there!). As users enter new content into the database, its value begins to grow. Growth can be slow, however, and growth that takes too long can result in an unhappy customer that churns.
A traditional method to grow a database is for customer users to enter information either altruistically or based on a workflow-driven by management mandate. Early in its life, users of the new database are not likely to perform searches or generate reports based on the content, since the amount of information is too small to be useful.
As a result, the value perceived by the user community is zero or even negative. “I’m putting a lot of effort into this and so far, I’m getting nothing back…!” It is the promise of future utility, not present value, that drives this process.
A simple test can be applied to a growing database to assess its current utility. Users will ask themselves, “What is the likelihood that I will find what I am looking for in this new database, as opposed to using my traditional methods for finding that same information?”
When there is little data in the database, users know that it is likely a waste of their time to invest in searching the database, since the answers are probably not yet present. Instead, they will continue to seek the information they want using their old, established processes (which, while they may be inefficient, users perceive that at least they work!).
Breakeven: The Tipping Point
As the database matures, the probability of finding relevant, useful answers to users’ questions increases. At some point in time, the probability of a user finding the desired information in the database is effectively equal to that of the traditional process: This is the Database Breakeven Point, and users will begin to consider it worthwhile to try the database first vs their traditional approaches.
From the Database Breakeven Point forward, the path to reaching your customers’ deployment and ROI objectives becomes substantially more achievable! This makes the Database Breakeven Point a key Value Realization Event along that pathway.
To Breakeven and Beyond!
As a vendor, how can you use this concept in your sales, marketing, deployment, and customer success efforts?
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Set and manage expectations:
Use your experience with the growth of databases in other customer implementations to help your new customers predict and manage their own situations. Setting reasonable expectations for value realization and tangible payoffs for users can make the difference between a happy customer and one who is frustrated and at risk of churning.
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Fill the box before delivery:
If you can deliver your database pre-filled with useful, relevant content, you can accelerate the process and reduce the time it takes to reach the Database Breakeven Point. One example of this is to include publicly available information or other curated data in the database during implementation. Your customer then adds their own proprietary information on an ongoing basis. The pre-filled data may offer sufficient content to get beyond the Database Breakeven Point right at time zero!
Optionally (and even better!), you may be able to charge for the pre-filled data based on its utility and value. Another similar approach is to partner with third parties who provide content that enables your database to be delivered pre-filled with useful information.
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Collect and curate:
Depending on the nature of the database and its intent, there may be substantial content existing in other forms that can be loaded to fill the database faster. In the best cases, this effort can take the form of a database loading or migration project to move the existing data into the new repository.
A bit more challenging is when the relevant information is scattered across a range of formats and tools. Moving this content into the new database will likely be more difficult, but doing so will help you achieve the Database Breakeven Point faster.
Either way, if you leave the capture and archiving of this information to the customer, it may take a long time for them to begin the effort and move toward their Database Breakeven Point. After all, it is likely that you as the vendor know the most about how to find, capture, organize, and store data in your tools. Consider including appropriate services in your implementation plan (hopefully to be paid for by your customer, of course!) that accelerate the process and move your customer towards breakeven as rapidly as possible.
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Focus on early wins:
Identify and focus database growth on areas that will yield rapid wins for your customer as Value Realization Events. These may be small victories, but their importance can be huge! If there are specific departments or projects that can help to achieve breakeven quickly, you can guide your customer’s attention to these specific areas. Do discovery to uncover these opportunities!
Once your customer has reached breakeven for one or more of these targets, you’ve equipped your customer champion or buying committee with the ability to leverage these early victories to promote the use of the database more broadly. Success breeds success!
Winning the Business and Generating Reference Customers
These ideas can be used to your advantage, both before and after the purchase takes place. Vendors who provide clear guidance to customers on how best to achieve a successful implementation have a competitive advantage over those who cannot. The ability to offer a Transition Vision, the path from where your customer is today to where they want to be tomorrow, can make a substantial difference in winning the business.
Similarly, getting past the Database Breakeven Point and achieving a successful implementation faster provides vendors with referencable customers more rapidly. Small, quick wins can offer the fastest route to referencing and avoid churn.
Use the Database Breakeven Point concept to increase your success rates in selling, deploying, and expanding the footprint of your database offerings. To return to our kitchen analogy, the faster your shelves get stocked, the more likely you will have referenceable, renewing accounts. Get cooking!
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