23
Nov

Prepare for a Long Haul for Enterprise Sales if You Plan on Attracting Sales Talent

Plan on at least a year and a half full time operation with zero sales if your target market is enterprise (Fortune 1000) business and you are just starting up your innovative technology product or service company. Zero sales does not mean that you proceed on your journey without sales people. On the contary, it is imperative that you have top sales talent (as well as marketing talent) on your management team if you are to give your start up its best shot. Consider how much has to be accomplished in preparation for sales revenue. For example, you will have test the sales potential for planned products to ensure that your revenue forecasts are sensible and attainable. Sales testing includes

  • Obtaining permission from influential prospects to participate in product planning along with you
  • Building a reliable sales model that includes a realistic estimate of the length of the sales cycle and, of most importance, a portrait of a best customer that will provide the bases for the qualifiers that your sales team will use to rank sales leads and determine where best to spend their time
  • Gathering sales level intelligence (as opposed to market level intelligence) about your competitors, their customers and the public reputation for their products
  • Building an initial sales funnel of qualified leads that will produce sales

As well, your sales talent will participate along with marketing and finance in the development of your business plan.

So how to compensate sales during this period of zero sales? The old adage, “you get what you pay for” holds true. Pay nothing and, more often than not, get nothing. A realistic business plan must include compensation for sales talent. Offering equity participation works, but only for sales personnel with the financial resources to weather your first year and a half period of zero sales. You might be fine restricting your recruiting to only sales people with the resources to go the distance, in exchange for an equity stake in your business and, then again, you may not.

I recommend planning on a sales staff budget of $75K – $95K for year one of your business. Of course any equity participation that you are willing to grant will sweeten the deal, so don’t neglect to include any equity that you can in your offer. Committing to a realistic sales staff budget will afford you the opportunity of hiring a sales manager (potentially a VP of sales) as a full time employee.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

22
Nov

Leverage Operational Incentives to Motivate Channel Partners to Work for Your Business Objectives

In the 1980s and 1990s it was en vogue to implement enterprise sales strategies on a “win win” basis with channel partners. This strategy was built on the premise that working with channel partners to achieve important, but differing objectives was a highly valued endeavor and, in fact, the best way to move solution sales forward to its next level of enterprise sales effectiveness within a channel partner model.

In 2011 this strategy of mutual attainment of objectives is passé. Now what matters is winning the business by delivering precisely what the channel partner needs–end of subject. Most products and services vendors have to make do with whatever they can get out of the sale, and make do without complaint. Of course there are astute marketers who, despite market conditions, still manage to sell products and services their way, thereby achieving their objectives, but they are clearly in the minority.

What kind of effect has this market shift had on Channel Sales? The Marketing Leadership Council of the Corporate Executive Board published a piece on November 22, 2011 by Shelley West (http://mlcwideangle NULL.exbdblogs NULL.com/author/swest/) on this topic on their “Wide Angle” Blog, Give Your Channel Partners the Right Incentives (http://mlcwideangle NULL.exbdblogs NULL.com/2011/11/22/give-your-channel-partners-the-right-incentives/). Ms. West astutely points out that financial incentives simply based on purchasing volume don’t work: “While simple to administer and easy to track, volume-based incentives often don’t deliver what we want them to.” Ms. West goes on to refer to a complex incentive program which, she contends, empowers the manufacturer/services provider to directly manage four key points with regard to channel partner performance, including “Core Product Sales”, “Services Solutions Integration”, “Sales Growth” and “Partner Investment in Relationship.”

All well and good, but I have to ask the question, is there a real partner in Ms. West’s model, or are we providing incentives to prod a reluctant business into a partnership? I suspect the latter. I would rather see partnerships for my clients orchestrated around plain and simple operational assumptions (as opposed to financial assumptions), including:

  • We built it, your selling it
  • You manage the end customers, we have the right to influence them, meet with them periodically, but with you tagging along
  • We create our brand, you receive sales leads

Financial incentives ought to be derived from margin. End of story.

The pollution in today’s channel partner programs, as I see it, stems, in part, from an effort on the part of some manufacturers and service providers to maintain direct selling efforts to the end customer while ostensibly operating a channel program. This pollution makes of the channel partner a rather useless component who will have to be cajoled and pampered into performing some type of service. I would rather remove the pollution and then address channel by crafting operating procedures that make sense for partners and manufacturers and service providers.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

20
Nov

Maintain Distance Between Customers for Optimum Success

Effective Customer Relationship Management (CRM) requires a “not too tight, not too loose” approach. Customer opinions, of course, are important, but be sure to handle findings with discretion. Discretion, in my CRM context, requires that customer realities (including their opinions) be filed separately and certainly not co-mingled.

Maintaining this discretion can be quite an effort for businesses operating under the radar. Large customers tend to wield their size menacingly, in an intimidating manner, to obtain special treatment or, worse, to monopolize time and attention. Never succomb to such intimidation. If you’ve set expectations properly, then the issue ought not to come up. If you’re selling products, make sure customers understand that your products are never sold exclusively to any one customer unless it’s expressly in your best interest to do so. If you’re selling services, then never commit to work on any one project full time. Maintaining boundaries between opportunities is the only way to go.

Price work correctly to win the right to execute, simultaneously, on several projects. A colleague who brought several start ups to public offerings once educated me that each of his billable days netted 2% of his annual income expectation. Not so far fetched (nor that greedy) when you consider how much marketing time he required to find a customer for his unique consulting work. At least he remained well fed and sheltered from the elements while he spent the better part of a year to get his consulting practice on track.

The most important objective is to maintain as many ongoing engagements as possible to ensure that the loss of no one customer will result in substantial damage to your business. As I’ve mentioned, set customer expectations properly to obtain your objective. Holding the line on pricing while efficiently executing on marketing during non billable time will eventually pay off.

Failing to implement some version of this method can be dangerous and, perhaps catastrophic. What could be worse than to spend 6 months entirely wrapped up in one project only to complete the work with no follow-on project in hand? This condition (ending a project with no short term income opportunity on the horizon) is referred to as being “on the beach” in the Staff Augmentation business. Who’s on the beach? Typically it’s a fish. We all know what happens to a fish that’s left on the beach for too long. Catch my drift?

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

19
Nov

How to Win The Complex Sale of Technology Products & Services in 2012

Tom Pisello, Chairman and Founder of Alinean, Inc (http://www NULL.alinean NULL.com) recently published a short article, Recovery Makes Selling IT Much Easier into 2012? Fahgettaboudit! (http://sandhill NULL.com/article/recovery-makes-selling-it-much-easier-into-2012-fahgettaboudit/). I was particularly taken by Mr. Pisello’s prediction that “[a]chieving success in 2012 will require evolving or implementing new strategies to help buyers navigate tough budget waters, and help facilitate sales to connect and engage frugal buyers to achieve sales goals despite the challenged economy.” Note his reference to a hopeful sales strategy that will look for opportunities to “connect and engage” the “frugal buyer” that he predicts will be the norm next year.

To me, Pisello’s hopeful sales strategy proceeds along the very lines of the right way to navigate away from the “dry run” as described by Jeff Thull (http://www NULL.primeresource NULL.com) in his book, “Mastering the Complex Sale”. Note that Thull recommends thoroughly reviewing “how you are currently engaging customers.” as a powerful method to overcome “dry runs” (lengthy selling efforts that ultimately fail). On pages 29 and 30 of his book he specifies three separate situations where connecting and engaging with prospects and customers may be helpful. I summarize these three opportunities as follows:

  1. Where the customer has a need, but can’t recognize this need. You can help illuminate the problem that needs fixing, but you need to connect and engage the customer to help
  2. Where the customer lacks the ability to specify the best solution to a problem, including implementation planning and, of most importance, calculating the specific value of solving the problem. You can help fill in these critical gaps, but, once again, connecting and engaging the customer are imperative to start the process.
  3. Where the customer lacks internal resources and should look to a third party, for example, your company, as the right resource to implement the solution and ensure that the sought after value is delivered. If you do not connect and engage, then you will not be in the running for this role with the customer.

Understanding how the techniques that Thull specifies can be utilized in the scenario that Pisello depicts, I can understand Pisello’s suggestions that a winning strategy for enterprise technology sales in 2012 will include methods of customer engagement that will, for example (he offers three examples of positive methods of engagement) demonstrate for the customer the real, substantial value to be realized through an effective solution to a recognized problem (in other words, bringing the customer to recognize the high priority of solving the problem as the result of illuminating the value of the solution).

I strongly recommend a quick look at Pisello’s article for any practitioners of Thull’s techniques to master the complex sale.

19
Nov

Crossing the Great Divide: Build Markets for Products Through Geniune Collaboration with Prospects

Where’s the dividing line between sales activity and other activities with customers and prospects that may appear to benefit sales, but, ultimately prove to be detrimental?

In my opinion, successful enterprise sales strategies for today’s markets require a willingness on the part of marketers to participate, wholeheartedly, within a potentially lengthy interaction with customers and prospects. This lengthy interaction may include broken decisions, changing perspectives, internal turf battles, etc as customers and prospects wander in the desert on their way to an oasis of a decision to do something about your product of service. You must be willing to shed 95% of your typical sales behavior, replacing aggressive sales efforts with a collaboration that communicates a complete willingness to participate along with customers and prospects in all of the steps that will be taken as bonafide decisions are formulated over time.

Collaboration may include sponsoring independent studies to provide your customers and prospects with a comfortable authority which will facilitate a decision in favor of your product or service. Keep in mind that these studies, independently authored, may also produce undesired results that refute a decision to implement in your favor. No matter. The point is to genuinely participate in the process which, ultimately, will result in a long term position for your firm for the customer that will be impregnable to competition. After all, no one else would be willing to go there with the client, now would they?

Of course this type of collaboration, to be successful, requires that you maintain an ability to architect products and solutions on the fly, to flexibly change direction as your customers modify their requirements and their needs. Further, you should be comfortable vetting products with customers while the products are still in developments. The closer you can get to an accurate solution for the customer’s needs, the less likely that the customer will find anything remotely close to her needs from any other vendor.

The facts are that 2012 does not look to be an easy year for enterprise product sales. The businesses that will survive the close scrutiny and tight pockets that look to be the customer norm will be those tenacious organizations that will be willing to proceed lamb like for as long as may be required to bring home the order. As well, a great sense of timing will come in handy. Sound like fun, doesn’t it?

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

17
Nov

How do you nurture a Lead?

Nurturing leads is en vogue these days. Everybody has some type of method for making it through the long trek from lead to order that is today’s norm for selling products and solutions to large enterprise business customers.

Let’s start with what clearly does not work. Scheduled email newsletters, and unsolicited announcements do not work. Worse yet, recipients build a virtual callous and entirely ignore them. Don’t waste time dreaming up content for unsolicited periodic email. Further, forget about sending invitations to webinars to contacts who are merely tangentially connected to your product or service. These invitations will fall on the same blind eyes. Let’s not forget Tweets. Certainly Tweets are great for the “twitterdom” but what kind of referral traffic is your website getting from your Twitter account anyways? After all, who has the time to read all of those short Twitter messages anyways?

What works is to establish contacts over the telephone with parties that, at some time or other, may participate in a decision to purchase a product or service like yours, either for a present or a future employer. Once you’ve established contact through an authentic telephone conversation, then it is perfectly acceptable to gain the contact’s permission to check in on some appropriate schedule to catch up with any/all new developments that may have occurred since your last call. Certainly send this contact some collateral and/or links to your website subsequent to your conversation, but be sure to, once again, gain permission to do so before you push the send button on your email.

Where you have been able to classify a lead as an active participant in a present project that is at least peripherally related to your product or service, then it makes sense to either volunteer some supportive effort as a contribution to her efforts, or to extend an invitation to her to participate in some activity that you are sponsoring where her opinion might provide you with some useful information. LinkedIn Groups are a great attraction for this type of invitation. As well, any market initiatives that you’ve undertaken will provide a potentially attractive venue for her participation.

I noted that her project should be at least peripherally related to your product or service to sketch the opportunity to partner with prospects as they proceed through the development of clearly defined specific needs. Today’s realities are such that what looks important today may change, radically, over time into a clearer, attainable objective in the future. Be sure to make a best effort to get a seat on this ride.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

17
Nov

Do We Really Need Software to Tell Us When a Lead is an Opportunity?

I have recently had substantial hands-on experience with cloud-based sales software, specifically SalesForce.com (http://www NULL.salesforce NULL.com). While I have to admit that I am still brand new to SalesForce, I can speak to an interesting feature, namely the method by which SalesForce instructs users to differentiate leads from opportunities. Actually, I need to ask “Is this Really Necessary?”

After all, if we are in the sales business (let’s face it, even if you merely own a business you are still, at some level, responsible for sales), then we ought to have burned into our psyche the qualification that needs to be in place to move a mere lead into the hallowed company of true opportunities. But evidently we have not gone through this fire, at least according to SalesForce and the MARCOM team at another product that I have recently looked at, Marketo (http://www NULL.marketo NULL.com/). Rather, they plan to “spoon feed” us through the stage of calling a lead a lead and an opportunity an opportunity with automated techniques (all of which, by the way, still require our manual input) that will let us know when to “convert” the matter at hand to something that will lead to some good old fashioned gelt.

Sorry state is all I can say. Perhaps the root need that these folks are addressing is the reality that in today’s marketplace leads for enterprise business products and solutions are growing very slowly. Sales and marketing teams are, perhaps, growing just a tad impatient with the slow pace that makes a turtle crossing a path look like a Ferrari on the track. So, let’s serve them up some systems to “nurture” and “convert”, but only at just the right time.

Bottom line is that technology innovators selling to today’s enterprise prospects are embarking on the complex sale. No ifs ands or buts about it. Leads will take lots and lots of time to progress. Technology innovators will have to frame value propositions strictly around why product or solution xyz is the only method of saving tons of cash or “fugettaboutit”. To get there much work will have to be done. Many contacts at the enterprise will have to be contacted to vet the real decision-makers and the real owner of that big hole in last quarter’s results. Therefore, to fail to track contacts by “accounts” while in SalesForce’s “lead” stage is, in my book, a big mistake.

Get used to the trenches. You are going to be there for quite a while.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

15
Nov

Wrong Turn at the Roundabout: Let’s Design It, After all the Customer doesn’t always know what she needs

Deborah Gage of The Wall Street Journal (http://www NULL.wsj NULL.com) published an article on the 2011 rationale for software companies to make the dubious effort of building enterprise “solutions without a problem” — FASTech: Businesses Need Smarter Software, Whether They Know It Or Not (http://blogs NULL.wsj NULL.com/venturecapital/2011/11/08/fastech-businesses-need-smarter-software-whether-they-know-it-or-not/).

Here’s the story line: [Software ISV VP of Sales] “We’ve gone down the path of the complex sale and yes, we fully agree with Jeff Thull (http://www NULL.primeresource NULL.com/) that lots of these deals end up in a “dry run” (to use Jeff Thull’s method of referring to sales that, for one reason or another, never happen). In fact, we find that when the customer reaches the conclusion that she doesn’t truly know what she’s looking for, or that the systems are not in place within her enterprise to support the implementation of ABC solution; that she will not buy our product.”

Here’s the punch line: [Software ISV VP of Sales, with VP of Product Marketing at his side] “Therefore, we decided to build a version of the product anyways. After all, who knows where the market will go next. Our [half baked] solution might be just the ticket next year.” This decision to build the product anyways ends up costing ISV buckets of money and lots of development time that would be better spent working on useful solutions that customers will ultimately ask for once the dust settles and thoughts coalesce into workable requirements.

Our C level managers of sales and product marketing have made a wrong turn at the roundabout. What they ought to have done, as Jeff Thull makes very clear, is to dropped the sales plan to book the order this year, but make the marketing commitment to partner with the customer through the potentially lengthy process of identifying flawed decisions, assumptions and plans, renovating same and, finally, planning for a reasonable, workable solution that our ISV will end up building for the customer. After all, in all likelihood few, if any competitors of our ISV will be willing to partner with the customer to work this process through to a successful conclusion.

Bottom line: Customer driven product management still makes the only sense for innovative businesses with high expectations about market penetration. Wasting time building gadget software will not pay off over the long haul. Worse yet, decisions to build gadgets are indicative of a lack of patience with markets, the kind of character flaw that can threaten to deep six the best of plans.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

14
Nov

Pick Market Niches with Great Care — Ready Fire Aim Won’t Work for Market Niche Decisions

Building markets on monies spent, but for solutions that are under utilized, is a problematic endeavor. Consider that 1) the big purchases have already been made and 2) that the solution purchased has not proved to be popular.

Consider the enterprise business market for social collaboration software. This market includes products like Microsoft® SharePoint® and IBM® Lotus Notes. Traditionally purchases of SharePoint and Notes have been plagued by low levels of user adoption within the enterprise. Answering “why” adoption rates are low has proven to be a risky endeavor as research power houses like Forrester Research (http://www NULL.forrester NULL.com) are at a loss to explain clearly a pervasive reason for low adoption rates. Rather, Forrester and others contend that low adoption rates are the result of a combination of factors, including low levels of “user friendliness” in the features of SharePoint and Notes as well as a tendency to push users into re-engineering daily business processes.

Business Process Re-engineering (BPR) is neither a trivial thing to achieve, nor an area where most consulting firms ought to venture to find new business. Sales cycles are very long. As well, the typical BPR solution requires the buy-in of multiple silos from within the enterprise; for example, for banking and finance, Audit, Compliance and MIS/IT may all have to endorse the same solution before an order will be placed. Building consensus among these three powerful organizations can literally be a multi year effort that will prove expensive, not only with regards to the amount of time required to pull off the deal, but, perhaps, in terms of additional parties who may have to be added to the sales team (for example, an ex CEO or other key influencer who can persuade all three groups to endorse the solution) at a costly price.

If major BPR is required to resuscitate the fortunes of Notes, or SharePoint within a business, then why go there? Rather, as I see it, a better case for building a niche upon a purchase already made is to demonstrate how SharePoint or Notes can be applied to an additional need, one that is compelling, but not addressed properly within the enterprise. Once again, turning to banking and finance, the need for constant compliance reporting across this highly regulated industry will provide a greater driver for an attractive market niche with a substantially attractive value proposition. Just compare the cost of using something already purchased, for example SharePoint, for compliance reporting vs the cost of licensing IBM OpenPages. No brainer?

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

13
Nov

Use Teleprospecting to survey customers

Sell what they buy.

Building a product marketing strategy that pulls 20% of efforts from technical innovation (internally generated) and 80% of efforts from listening, analyzing, and summarizing what customers within a market segment need and look for from products and services (externally generated) makes sense. In my experience there is a significant opportunity for success for products crafted to match what customers are buying. Further, accomplished marketers like Peppers & Rogers Group (http://www NULL.peppersandrogersgroup NULL.com), and George S. Day (http://marketing NULL.wharton NULL.upenn NULL.edu/people/faculty NULL.cfm?id=186) emphasize the importance of surveying customers to determine what:

  1. value means
  2. solutions they are purchasing to deliver value
  3. and, finally over time, whether they got the value they were after when they purchased and implemented solutions

Teleprospecting provides an effective means of collecting information from customers and prospects. Put the information you capture from teleprospecting interviews or surveys into a picture of a market from the perspective of customers and prospects. Of course, with regards to determining a useful answer to objective (1), above, keep in mind that the question is very broad; therefore, the answers received will be useful as you assemble a broad value proposition for the market, but not especially useful on a case by case basis. Nevertheless, simply putting together an broad, but accurate, value statement for a market segment will be a very worthwhile endeavor. Further, by obtaining answers to objective (3), above, whether or not solutions, once implemented, deliver the value that they promised, you will have another gold nugget to enrichen the products that you, subsequently, decide to build or, perhaps renovate.

It’s best if the teleprospecting effort can be made by independent parties, but for a business operating under the radar with few sales, and limited means, the slate is still clean enough to permit internal staff to undertake the teleprospecting effort. Anyways, if your best prospect is larger business, then engaging in lead generation from a teleprospecting effort makes the most sense. After all, larger businesses pose longer sales cycles complete with complex systems for making buying decisions.

One last point on value: As I’ve written in earlier posts, if your product or service is complex, then you must dig as deep as possible through sales qualification steps (that you have carefully designed for a specific prospect opportunity) to determine the specific value that the prospect at hand is after. I emphasize that this value statement must be framed in terms of cost savings if it is to be truly persuasive and convincing. Further, the greatest reward (in terms of the magnitude of revenue to be received from an order) will be greatest where the prospect understands that by purchasing your solution she/he will save the most money with regards to ongoing operations.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved