May 2009
24H of Innovation - 1/2 Time Pep Talk for 2009
2009 has been a very interesting year, to say the least. However I firmly believe we are on the verge of something great as it relates to Innovation and how business is done. I believe that although there are many technical innovations that will take place in 2009, my excitement is for the innovation and movement that is taking place regarding customers and how we interact with them.
I believe that one of the fundamental issues many companies have historically had is that customer acquisition and retention was viewed as “steps in the process”. Often the interactions with prospects and customers only started to come into play once a product or service had been developed and delivered. Once initial sales of the product or service were delivered, then the only interactions with the customers were for technical support cases or in rare cases a company would choose a “select few” to participate in formal events like customer advisory boards, etc.
I have seen the world change in 2009 as it relates to this, and I see the second half changing more as people begin to truly understand the importance of involving customers and potential customers into all aspects of their business. By taking a collaborative approach to working with customers it can have a positive impact on all parts of your business:
- Concept Validation: If you have an idea for a new product or service. Get out and talk to your target market. There is no greater risk then spending months or years developing a solution that people do not need, and not willing to pay for. Here is a great video from Eric Ries at Lessons Learned. Eric is a supporter and promoter for the Lean Startup methodology.
- Development: Look up some information on Steve Blank who is not only a successful entrepreneur but also taught the Entrepreneurship courses at UC Berkley. He wrote a book The Four Steps to Epiphany which is a must read for anyone looking to start a technology company. He talks about the importance of customer development in parallel with product or service development.
- Marketing: How can you repeat something that you do not understand. The best way to replicate your success is to get out and talk with customers to find out why they bought from you in the first place. Take this information and repeat it to put more opportunities into your sales funnel.
- Sales: The world of sales has changed. No longer do companies and people rely upon the salesperson to be their main source of information. Google, Yahoo, and the internet as a whole mean that customers do their homework and make many of their decisions well before even making contact with you. So find ways to engage with customers early and to build the relationships with them.
- Post-Sales: Stay close to your customers. If your strategy is to only contact them when you have a new product/service or when it is time for them to upgrade....then you may find your sales falling. Customers have limited budgets and they are going to spend it on companies that they know and trust. If you do not have that relationship and trust with them....you have missed a huge opportunity.
So my message to you as you read this....get out and talk to customers. Do it often...do it early. Take the time to truly understand their world and what they face as challenges on a daily basis. Develop solutions that solve problems and satisfy needs....not just for the sake of innovation. How can we not succeed when companies and individuals are focused on solving true customer issues and making the lives of their customers better?
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"Business is a combination of War and Sport"
11/05/09 09:16 Filed in: Customers
For many years, people have been using analogies and comparing Business and Sales to war and to “doing battle”. I cannot help but believe that this is not the best long term strategy for any company and in many ways these words are doing more harm than good for the people and companies that use them. From your own perspective, lets think about this for a second....if doing business is like going to war...how motivated are you going to be to get out there and do it? For some reason I do not believe that there are many people that wake up in the morning, and jump out of bed excited about going off to war or having to do “battle” with their customers.
Now put yourself into the customers shoes for a second. In fact think about the last time you were a customers and you bought something....how enjoyable would the experience have been if you were dealing with a salesperson who had the mantra “Business is a combination of War and Sport”? First off, do you think that this person would have really cared about your needs? How enjoyable and productive would the interactions have been with this person if they are focused on winning at all costs (and you loosing) rather than trying to find a win-win situation? How likely are you to open up to this person and provide the names of your friends or family who may also benefit from the same type of solution?
I know that many of these sayings come from the time in our history when going to war was “glamorous”. However, the part that concerns me about this is that not only have times changed, but the reality is that when you are focused on situations like “War” and “Sports” where there is always one winner and one loser, it does not foster the type of trust and collaborative relationship you need to have with your clients to build a business that is successful both today as well as for the future.
Going Wide...or Going Deep?
05/05/09 08:59 Filed in: Sales
What is your sales strategy?
Many companies when they begin to build their solution and put together their business case they focus a great deal of attention on things like analysts reports, industry estimates, etc. to try and quantify the opportunity that exists for their solution. However in many ways using this data and approaching things this way leads you into a strategy of going “wide” with your product or service. This is not necessarily a bad thing, however it is important to know the differences between the two different strategies, and to make a conscious decision about which one is truly right for you.
Going “wide” relates to having one product or service to sell, and the strategy is to sell it to as many people as you possibly can. For example there are over 1 Billion people in China....so you may build your business case on “if only 1% of China’s population” bought our solution, then it would mean we would be rich :-). The data required for this type of calculation can be pulled from many different areas, however the foundation is that you are looking to sell your product or service once, and depending upon your solution there may be some reoccurring revenue from things like yearly maintenance, etc.
Now, if your strategy is to go “deep”, then it is not about how many new customers but rather how much can you sell to one customer? For example you may offer a solution that can have an impact on various parts of your customers company or you have a suite of stand alone products that will allow you to up-sell your customers to meet several of their requirements. A simple example of this is the Microsoft office suite. In the beginning you could buy Microsoft Word all by itself. Most people needed a word processor. However, the accounting department, they needed some way to represent their data and they worked with numbers and calculations all day long so they needed Microsoft Excel. The Sales team and the Executive team often did presentations to clients and investors....so they needed PowerPoint as well. I may be really dating myself as today I do not even think you can buy the different Microsoft components separately. The point is that the strategy of Microsoft was to go “deep” with their solutions. By going deep it allowed them to sell to all parts of a company and often to sell more than just one component to the various parts of the their clients organizations.
Again there is no right or wrong strategy here...just different ones. It is important for you to know the differences in the two strategies and to determine what is best for you. With each strategy there are benefits and drawbacks that need to be considered. For example in today’s economy you have a greater chance of success selling more into accounts where you already have some traction and an install base (going deep). However, with a “wide” strategy typically your cost of sales is a bit lower as it is often more of a commodity type of sale, and you may not be as concerned about hiring a sales team to build long term relationships with clients. So, what is your sales strategy? Is it working for you? And finally....is there a way to go “wide” and “deep” with your product or service?
Many companies when they begin to build their solution and put together their business case they focus a great deal of attention on things like analysts reports, industry estimates, etc. to try and quantify the opportunity that exists for their solution. However in many ways using this data and approaching things this way leads you into a strategy of going “wide” with your product or service. This is not necessarily a bad thing, however it is important to know the differences between the two different strategies, and to make a conscious decision about which one is truly right for you.
Going “wide” relates to having one product or service to sell, and the strategy is to sell it to as many people as you possibly can. For example there are over 1 Billion people in China....so you may build your business case on “if only 1% of China’s population” bought our solution, then it would mean we would be rich :-). The data required for this type of calculation can be pulled from many different areas, however the foundation is that you are looking to sell your product or service once, and depending upon your solution there may be some reoccurring revenue from things like yearly maintenance, etc.
Now, if your strategy is to go “deep”, then it is not about how many new customers but rather how much can you sell to one customer? For example you may offer a solution that can have an impact on various parts of your customers company or you have a suite of stand alone products that will allow you to up-sell your customers to meet several of their requirements. A simple example of this is the Microsoft office suite. In the beginning you could buy Microsoft Word all by itself. Most people needed a word processor. However, the accounting department, they needed some way to represent their data and they worked with numbers and calculations all day long so they needed Microsoft Excel. The Sales team and the Executive team often did presentations to clients and investors....so they needed PowerPoint as well. I may be really dating myself as today I do not even think you can buy the different Microsoft components separately. The point is that the strategy of Microsoft was to go “deep” with their solutions. By going deep it allowed them to sell to all parts of a company and often to sell more than just one component to the various parts of the their clients organizations.
Again there is no right or wrong strategy here...just different ones. It is important for you to know the differences in the two strategies and to determine what is best for you. With each strategy there are benefits and drawbacks that need to be considered. For example in today’s economy you have a greater chance of success selling more into accounts where you already have some traction and an install base (going deep). However, with a “wide” strategy typically your cost of sales is a bit lower as it is often more of a commodity type of sale, and you may not be as concerned about hiring a sales team to build long term relationships with clients. So, what is your sales strategy? Is it working for you? And finally....is there a way to go “wide” and “deep” with your product or service?
Monthly Podcasts
03/05/09 18:34 Filed in: Podcast
