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Startup Therapy: Ten questions to ask yourself every month
One of my favorite blogs, A Smart Bear, has a great post today about the ten questions that you should be asking yourself every month. They all deal with how to most effectively run a small business, but, of course, my favorite is this one:
3.) What one thing is most responsible for preventing sales? e.g. people not knowing you exist, pricing, not enough product features, unorganized sales strategy, look-and-feel of website, haven't identified pain points, Most little companies aren't honest about this, yet it's possibly the most important question you could ask. For example, I'm an engineer, so my first answer to "Why don't you have more customers?" is almost always: "Because we need this feature." You hear some potential customer say "we will buy if you do XYZ" so you conclude that if you implemented XYZ people would start breaking your door down.But is that really the case? If you added one feature and maybe satisfied that one customer assuming they wouldn't ask for a second thing, and in my experience they usually do, would that get you 100 more sales? For those hundreds of people who downloaded your software and never bought — is the reason "not enough features?"For the hundreds of thousands of people who never came to your website in the first place, or hit the front page and left after three seconds, is the solution "more features?"When you honestly ask yourself this question, it will naturally lead into things you can do right away to get more people to the site, into a trial, and/or into a sale. Don't just rest on what comes easiest.
via Startup Therapy: Ten questions to ask yourself every month.
Get People To The Starting Line
I heard the other day, that for religious evangelists, it takes just over 4-years to get someone to convert religions. This was from 'This American Life' the episode entitled Bait & Switch - Act 2 Raw Sex (how's that for SEO).
I've been thinking about it ever since. As a sales guy, I spend a ton of time evangelizing my products & services. If you spend your time cold calling people, you need to convince people that what they are doing is inefficient or basically backasswards. When selling technology, this doesn't happen in a 10-minute phone call.
This happens over months of relationship building and calls and site visits and more calls and more relationship building. You're preaching your version of religion and trying to make converts. It doesn't come easy and it is easy to focus on how many people finish the race, but we lose track of how we got people to show up at the race in the first place.
We spend a lot of time talking about metrics. How many deals closed, how many leads from one point to another. How many suspects to prospects; prospects to opportunities. All of those metrics are great for potential customers who are already in the race.
But let me ask, how are you getting people to show up at your race?
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Thank Your Supporting Cast
I've heard a story that, after he is done filming, Clint Eastwood has a thank you party for his supporting cast & crew at his private club, Tehama, in Carmel Valley. What an awesome thing to do for people that, aside from a split second credit at the end of the film, probably don't get much credit for the work that they do.
I've always thought that this was a really cool thing to do.
By most accounts, especially in a down economy, I've had a pretty good year and have had the opportunity to do some really fun things. I celebrated my 10-year wedding anniversary with Holly, watched my kids evolve into little people, closed some big deals, got a bunch of case studies, consulted / advised two companies, taught a class, sat on two panels, did a couple of guest blog posts and learned a ton from all of the people that I met with throughout the course of the year.
Success is not an individual sport. There are a lot of people that have helped me out. For that, I'm very grateful and I'd like to recognize them. Think of this as a Follow Friday, Subscribe Saturday or what you want to call it. These people rock.
- My amazing wife and family - beyond them, this list is in no particular order
- The awesome people at Socialtext for all of their help - Kris, Eugene, Ross, Michael, Alan, Shawn Devlin, Chris Lynch, Michael Kieran, Adina Levin, Phyllis Ball and the entire development staff here at Socialtext. You guys have built an amazing product that is really fun to sell. Thank you.
- All of my customers that actually bought stuff from me. You have no idea how much it means to me that you see me as someone you trust enough to do business with. Thank you, thank you, thank you. A million times over, thank you.
- Eric Grafstrom, Jim Weil, Mukund Mohan, Peter Marquez & Greg Brown for being good friends that I can bounce crazy ass ideas off of and being willing to tell me if they are crazy or not. I am always so impressed by you guys and learn so much in our conversations.
- Terri Griffith for letting me teach her class at Santa Clara University - I can't wait to do it again this winter!
- Too many friends to name - I'm insanely lucky in that department
- Jennifer Leggio, Dat To and Fernando Labistida for having me guest blog on their sites. PLUG - I love doing this if you need a sales guest blogger, hit me up.
- Sameer Patel, Oliver Marks & Gerhard Gschwandtner for letting me sit on panels at their respective trade shows. I love that you guys invite me to these and I learn so much when I do these events.
- Bloggers and writers like Jim Keenan, Doyle Slayton, Jill Konrath & Paul Castain - I learn so much from you guys every time you post.
- You - I'm shocked sometimes when people read this blog. Thank you for doing so.
I'm Just An Ad Man - Rory Sutherland on Perceiving Value
Rory Sutherland, just an ad man, gives a great talk at TED about how to perceive value in the things that you sell.
Here is a challenge, take a look at the products that you sell, how can you recraft the message to increase the value?
What's With All The Chatter?
There seems to be a trend happening in software / technology these days. We've gotten way out of control announcing products way before they are baked in an attempt to generate press and build FUD in a way that didn't happen just a few years ago.
Microsoft is guilty, announcing planned features in SharePoint 2010 almost a year before it is scheduled to ship. Google announced Wave 2 months before developers could get their hands on it and who knows when it will be publicly available. Today, Salesforce.com announced Chatter, a social integration tool that will turn water to wine and cram 10 pounds of productivity into a 5 pound bag. At least according to Marc Benioff during his keynote today. The downside of this miracle cure is that, like SP10 and Wave, it won't be available until some undefined date way in the future.
I've been hearing rumors about SFDC doing something cool around enterprise collaboration for a few weeks. I have to admit, my speculation was that they were going to announce a partnership to integrate with Google Wave. The first announcements made Chatter sound like it was simple integration / Twitter-esque clone built on top of SFDC.
After reading Charlene Li's post, though, I'm intrigued about where this will go. Some of her key points were:
Enterprise apps get social–and smart. This is more than merely integrating Twitter-like functionality into CRM and creating “social CRM”. This is a rethink and elevation of how information flows around an organization, and where it lives. The elevation of deals to be on the same level as people is significant — in every other social platform, people reign supreme and the world pivots around them. Look for social CRM providers like Oracle, Microsoft, IBM, and many others to open up their platforms as well.And:
This means your enterprise app will be “adopting” social technologies, moving away from sending notifications via email (and cluttering up your inbox) and instead, sending updates just like everyone else on your team into the news stream. Essentially, your enterprise app will be “tweeting”, with it’s own “profile” and Chatter updates aggregated into one place.This is pretty interesting and something that we've been working on for sometime at Socialtext. On the one hand, SFDC will be a formidable competitor in the market place. On the other, they are still 5 - 8 months from delivering anything in the best of circumstances. Also, there is still a level of acceptance that will need to be overcome. Many of the CIO's that I speak with are still skeptical of having tons of data in the cloud. Salesforce brags that in 2011, 25% of apps will be in the cloud. Simple math, but that means that 3/4 will still be on premise. And let's face it, most sales reps don't use SFDC the way they should so paying $50 a month for a glorified contact management system beats hell out of a seven figure Siebel implementation. It will be interesting to see what kind of acceptance having deal status and team interactions in the cloud will get. From what I've seen, it is cool if a small group is doing it, but when a big enough contingent of employees has conversations in the cloud, it makes everyone nervous. The second question that I have is around the level of integration. They are currently promising a pie in the sky picture of this integration where everything is updating everything, but they haven't explained anything at all about which apps this will work with (outside Salesforce) and what it won't (assuming Oracle) nor have they gone into the security of having certain things shared and others not. Don't get me started on how this will map to a company's archiving policy. Selling social software is hard. I've often said that this is one of the hardest jobs I've ever had. I'm excited about SFDC getting into the market. I love the competition and it will raise the level of customer acceptance to another level. It's another endorsement. And we could all use that. Other posts about Chatter: What do you think? Will Chatter change the way you work, will it be a blip on your radar or will it just be mindless chatter? Leave me a comment and let me know what you think.
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Will SaaS / Enterprise 2.0 Migrate to Value Based Pricing?
Back in my day, there was a company called PeopleSoft. You old timers might remember them. Acquired by Oracle back in ought-four. They sold their product not by list price, but by value-pricing. For little companies, this was a great thing and for big companies, it probably wasn't too bad either. What it was, though, was difficult to predict, budget early on, or budget consistently (or so I'm told by my customers).
Which is why I was so intrigued by the post from Ian Hendry citing the comments of Laurent Lachal of Ovum. The general premise is that Salesforce has some much information about what you're doing with the data (number of leads coming in, conversion rate, close rate) that they can easily see how much value your getting from the system and could potentially price their platform in a way that relates to that value. From the post:
Salesforce.com, again as an example, holds a lot of back-end data on how many contacts each of their customers hold in their CRM systems; how many leads they have; what proportion of those convert to opportunities; and then statistics on revenue generated from those opportunities. Salesforce.com has the data to prove its system is helping to close leads and generate business; to shorten sales cycles. Why doesn’t SFDC bill based on the tangible difference it has brought to the performance of a customer sales team? Another example: email marketing applications from Vertical Response or Constant Contact bill you for emails sent, but they also hold data on who clicks through, so why not bill on traffic sent to your website instead?It is a really legitimate argument, until you think about the quality of the people behind the platform. For example, if you take 100 sales reps on a team, only 10 of them will be stellar when it comes to the use of your SFA system. The rest will use it as a glorified contact management system. I think that I'm an above average Salesforce user and I'd only give myself a C+ when it comes to taking advantage of what the system offers. I think that most sales reps would be hard pressed to say that they get $65 a month in value from their SFA tool. This is obviously not something that Salesforce wants to hear, but lets face it, 99% of sales reps can get by with Excel and a phone. I think that, in this case, Laurent puts far too much value on the tool and far too little on the carpenter. Salesforce, for all of it's cool bells and whistles, doesn't close business for you. If I close a $1M deal, there is no way on earth that Salesforce contributed even one tenth of one percent to that. With that in mind, if you tie the price of Salesforce back to actual revenue generated, a bad quarter for a customer could sink a sales rep at Salesforce. A bad quarter for a vertical sector or region or global catastrophe could dramatically impact the entire company. There is a huge lack of predictability both on the vendors behalf as well as the customers. A great quarter and all of a sudden a company is looking at a 10X bill for their SFA. As a sales rep, selling value-pricing is an even bigger pain in the ass because you have to convince your customers that the tool is going to transform their people into something that they aren't. I tend to agree with Markus Buckingham that people don't change that much, so stop trying to get them to do so. When you try to sell a product based on value-pricing, you not only have to sell on the merits and the value of the product (already hard), but you also have to convince your potential customer that they are going to be able to change the way that they do business so dramatically, so immediately, that they will want to pay a premium for this potential transformation. This is a really, really tough sell for limited upside to the vendor. A similar example can be made for the email marketing system that Laurent points out. Again, the email marketing platform is a tool. If I put shit content into it, I'll get zero click through, but the vendor shouldn't be penalized based on a customer not being able to create good content. In the end, I think that if value-based pricing worked, you'd see it being adopted by a gaggle of companies instead of the Oracleized PeopleSoft (BTW, I don't think that they do this any more. Can anyone confirm?). The problem is that as a vendor, you need to defer your revenue for a long time - until you and your customer agree that value has been seen. As a sales rep, you have to sell twice as hard. And as a customer, you need to predict the future and expect that people will change. Combine all this and you have three strikes to value-based pricing never catching on. What do you think? Am I crazy? Am I missing the value based pricing sales model? Let me know in a comment. Photo: ValueKing by Ilja
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16 Lessons in Customer Service from a Car Salesman
WebWorker Daily has a really good post today on things that you can learn from car salesmen. I think that it is a really well written article, yet enforces some of the stereotypes of car sales people and, by default, all sales people.
Still, Amber Riverie has some great points to keep in mind when you're working with your customers including:
Don’t argue with your customers. You obviously have strong opinions for and against certain features relating to your product, but if your customers have opposing opinions, it’s best to disagree respectfully — and gently. Listen to your customers. Are you paying attention to what your customers are saying? Are you listening to what’s important to them? Be fully present and listen to the needs, desires and frustrations that your customers are sharing. This is invaluable when it comes to fitting the right product with each person, and the ability to recall minor preferences is even more impressive. Stay cool under pressure. When you’re dealing with other people’s money, there will inevitably be tension. Proceed with caution. Take breaks. Take a few breaths. Keep things in perspective and consider the other side. Do not, under any circumstance, lose your composure. Talking too quickly or loudly and seeming frustrated or agitated will only risk evoking the same response from customers.The rest of the list is here: 16 Lessons in Customer Service from a Car Salesman. Well worth the read.
Michael Jordan’s Rules (Adapted for Sales) – Keep It Simple
This is the 4th in a series of posts based on the Golf Digest Article by Michael Jordan on how to be more competitive in golf. The whole thing carries over, though into sales and probably all aspects of life.
Rule #4 - Keep It Simple
Man, I love this. If you haven't read the book, the Power of Simplicity, bounce over to Amazon and get it. Here's the link.
If you're selling something, make it easy to do business with. Sales is a tough job. You deal with rejection from all angles at all times. Why would you want to bring more pain on yourself by not making things as simple as possible for you and your colleagues?
Why make it tough for your customers? Just keep things simple. Don't over analyze. Don't over complicate. Speak in simple language, people will trust you. Deliver simple emails, they're easier to digest. Leave short voicemails, no one has the time to listen to you ramble on for 2 minutes about a long email you sent.
Why make it tough for yourself? Send simple response. Have simple, frank conversations with people. Don't try to over sell stuff because people will see through your bull shitake. Manage your calendar in a way that will get stuff done.
Remember the K.I.S.S principle and you'll do great.
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Michael Jordan’s Rules (Adapted for Sales) – Don't Think About the Prize
This is the 3rd in a series of rules outlined in Golf Digest by Michael Jordan on how to be more competitive in golf. I've been working on how to adapt them to be more successful in your sales career. I suppose, that at the end of it all, I'll a
dd a bunch of links and compile everything.
Rule #3 - Don't Think About the Prize, Think About the Work
Admit it, that hint of the big commission check comes into your head when you get your comp plan. You've already spent the money, haven't you.
That spiff that your VP rolled out this quarter? You're already on the beach.
Put it out of your head. Don't even think about, because when you're thinking about sipping mai-tais in Maui, you're not thinking about doing the work that is required to get there.
You're not thinking about the cold calls you'll need to make, the meetings you'll need to go to, the follow up letters you'll need to send.
You certainly won't be thinking about the work that will need to go into strategically moving your deals forward.
One of my prizes from last quarter was a trip to Pebble Beach. I didn't even realize that I was close to it until after the quarter was over. Had I known I was getting close, it would have been really hard not to picture myself standing on the #7 green (where I knocked it stiff, of course). And that leads to not doing the work involved to get there.
Little things add up to big things. Make the calls, do the follow up, focus on the things that will take to get to your number. Don't focus on what happens after you get there.
- Image by Getty Images via Daylife
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Michael Jordan’s Rules (Adapted for Sales) – Have Total Confidence
This is the second in a series of 10 posts based on the Golf Digest article in which Michael Jordan discusses how to be more competitive.
His second rule is 'Have Total Confidence In What You Can Do'.
A few weeks ago, I tweeted that I was totally convinced that if a company didn't use our software that they would be out of business in 3-months (of course I can't find it, but here is the RT). I recognize that this isn't true, but I go into every deal with the conviction that this is the case.
I'm so convinced that my product is the best thing for my customers. I'm convinced that I'll win every deal that I go into. I'm convinced that companies that don't choose our software will be toast.
This conviction carries over in your voice, your mannerisms and your decisions that you make for your customers. It's easy to say that you have their best interest in mind, but do you really? When you are totally and utterly convinced that you have the right thing for your customers, that will come out and you'll win more deals.
On the flip side, be honest with yourself and your customers. If you work for a company with a shit product, leave. If you work for a company that is unethical, get out of there. If you don't believe you have a good fit, walk away from the deal and recommend a competitor that would be a better fit (believe me, nothing builds future credibility like this).
If you don't believe, who is going to believe for you?
