May 252016
 

On May 18th Bloomberg ran an article about Atlassian Software, whose sales last year topped $320 million and may reach $450 million this year, “without a single salesperson on the payroll.”

Here is the article: This $5 Billion Software Company Has No Sales Staff

This was not the first article out there on the topic and Atlassian. Others had also written about the company and its business model. An analyst also offers a cautionary note: “Though Atlassian counts more than half of the Fortune 500 as customers, no single customer accounts for more than 1% of revenue. In other words, no single client pays Atlassian more than $3.5M.” That suggests the company is hitting a ceiling in how much revenue it can derive from its customers.

This is not a rebuttal or an article that is designed to be contrarian. Like many other people I read the article with interest and appreciated a company whose product’s name, project management software Jira, is better known than the corporation behind it. Think Kleenex and Kimberly-Clark Worldwide, Inc. or Popsicles and Unilever. In today’s modern society, everyone and everything has to be justified and that includes sales professionals.

The article does note that the low sales (and marketing) expenditure came about accidentally when the company received an order off its fax machine. However, reading the article one could read into a little bit of a different story.

The company’s co-CEO states, customers “much rather be able to find the answers on the website.” That is, of course, much easier said than done. I am not referring to the power of search technology. I am referring to the power of finding, reading, understanding and not having any questions.

The company advertises. One expenditure cited is “mostly on ads.”

Another expenditure, and this is important so pay attention, is “payments to partners,” which is described as “one-fifth of that” presumably referring to the software firm’s revenue. Would it be wrong to assume partners exist to resell, the company has a channel as a model for leverage and scale and these partners have professional sales teams?

However, what was most interesting were the quotes from several executives like president Jay Simons who is quoted as saying, “lower prices and more investment in research and development to refine software, making it easier to try, understand, and purchase.” One cannot help, but notice that he, and others, are doing some selling here. He sounds like a good salesperson for his firm, doesn’t he? … Or is it just me?

What do you think?

*Things That Need To Go Away: Not Counting Public Relations, Media, Marketing Or Partners As Sales

Apr 242016
 

How would you answer were one to ask you what is a hallmark of good branding? How would you respond were someone to ask you to cite an example of a successful internal organization?

Customer First Organization

The thought came to me when I realized that during the last fifteen or so years I have read about so many Cisco reorganizations that fact became fiction became legend which, in turn, became one melding into another. This is not meant to be an exercise in being an armchair expert, but the number of public, as well as less publicized, reorgs at the networking giant are widely known. Why mention Cisco? The changes are examples for inward looking organizational structures.
The most recent organizational structure has the company divided into the following divisions:

• Networking
• Security
• IOT & Applications
• Cloud Services & Platforms

One notes that the business is organized according to internal imperatives (development, engineering, marketing and fiefdoms probably) and not according to customer needs. It would indeed be the scarce customer, which would have a group or department dedicated to Cloud Services, which would be distinct and separate from IOT. The same applies to any other combination of Cisco’s four groups.
This is not a knock against Cisco, which certainly makes competitive products, or even an article about the Silicon Valley mainstay. It is about what the successful companies of the future should give thought to.
So, let us take a look at the quintessential success story of the day, namely Apple. What is Apple known for? It certainly is not divisions for computers, phones, mp3 players and operating systems. Apple is known for, wait for it, simplicity, elegance and functionality. These are things customers care for, garners their attention and for which they certainly pay extra. Moreover, all its products are sold under one roof. The Tiffany & Co. company is known for style and luxury. Customers are not expected to deal with a salesperson for earrings, another for gemstones and another for third party products. In fact, the salesperson-slash-concierge personally takes the shopper from corner to corner and ensures a seamless transition. Again, the experience is designed to be oriented towards what the customer would like and enjoy. Contrast that with HP where customers would have had to speak to different persons for printers, laptops, servers and so forth. It is no secret that HP’s star had been diminishing and the company recently threw in the towel by chopping itself into two. Ironically, the move may be a harbinger of focus and good things for the remaining parties, although past experiences do not bode well (does anyone remember Palm and 3Com, to pick a HP-related example)?

Capture

The Brand Pivot To Culture

We are here to hear an argument for creating a uniform culture that is focused on customers, for customers and based on employees winning when customers win. By definition, such a culture negates fiefdoms, internal divisions, competition and trains and rewards employees to deliver on the brand promise, but there is a catch. The brand promise too has to be focused on the customer

• Here is a brand focused on the customer: See Your Business In Our Software – Oracle (where I used to work)
• Here is another: Grow Your Company With Our Solutions – Fictional company
• Here is the reverse and one that is misguided in that it is inwardly focused: The Largest Distributor Of Cola

You see, customers do not care that you are the largest distributor of anything and least of all a certain brand. In contrast, companies do care what you can do for them. It should be about them.

Walking The Talk Of Culture

More critically, and this is actually important, there should be a supporting structure behind the outward and customer-oriented brand. Everything should be designed to support the outwardly focused branding. Aside from deliberate hiring, structure and the functional day-to-day work the company must absolutely insist on employees behaving as such. Companies must align pay, bonus and promotions accordingly. What is the sum total of the design just enumerated? Culture. A culture, which is the enabling structure for a successful company.
This would be a real shock to the system for companies, which foster internal competition, tolerate nepotism and turfs and reward managers who are in it for themselves and their egos.
However, if there is one thing you take away from this article it is this most important concept. The key is that the organizational culture will conform, follow and match what the leadership puts in place for the group. It is not about instilling the culture per se; it is about creating and moderating the enabling structures and guidance that points to the correct orientation. The analogy is that of children and their parents. Parents can say whatever they wish and could instruct their children as much as they want, but unless the walk matches the rhetoric the organization will never follow.

*Things That Need To Go Away: Arrogant Corporate Culture

Mar 282016
 

EnterpriseAppsToday has a short summary of today’s leading ERP vendors. It is noteworthy that each listed vendor has multiple suites for different purposes with different names, but the website lists one specific offering per vendor. Interestingly, there is the comment by an analyst who dismisses other vendors in that fragmented market. He may have a point.

ERP buying Guide: Top Tier Vendors

The site also offers an interesting analysis of the CRM Market. The elephant in the room is the actual ROI of CRM and the user base’s resistance to the product. Is it too controversial to believe Microsoft Excel is the largest ‘CRM’ in the world?

CRM Market Leaders

 

*Things That Need To Go Away: Ignoring vertical specialist ERP and CRM solutions

CRMERP

Mar 142016
 

Wikipedia defines a Product Manager’s role as, “investigates, selects and drives the development of products for an organization, performing the activities of product management.” These activities include researching intended demographic, the products offered by the competition and how they fits with the company’s business model.

Product managers are the bridges between the company’s line items, developers and sales and marketing.

The job is both becoming more simple and more arduous at the same time. The advent of Internet and sources of research and communication at one’s fingertips have made the collection of data almost seamless compared to days of yore (a.k.a. 20 years ago). The same efficiencies have made the market that much more fast-moving and prone to shifts.

Elsewhere, the buying process has changed drastically. Buyers come to the table much better informed, less dependent on sales and marketing. The old spectrum and funnel definitions and directions do not apply. In such an environment it behoves any company to use the job function closest to the market and its customers. Who are these mystery people? Why the sales team of course.

This is why it is such a surprise that in an informal survey of my contacts in sales and sales management the grand total number of companies in which there existed a formal process of communication between sales and product management was…. One.

The market is more competitive, products are commoditized, customer demands and appetites are changing and changing more rapidly and alignment is minimal or one-way at best.

Should product management at all companies not have a formal, standardized and consistent standard for using the sales team as the company’s canaries in the mine so to speak?

Sales need product management’s assistance and input. Product management needs input from the individuals who are on the front lines and most exposed to customers.

Does your company have a formal sales-to-product management process?

*Things That Need To Go Away: Product Managers Who Have No Time For Sales

communciate udnerstand support

Mar 062016
 

It is often noted that successful salespersons interact with the right employees of their prospects/customers.

What is less often discussed is with how many of these folk a salesperson should interact. The question is more and more relevant because decision-making is increasingly and more and more diffused.

IDC’s 2010-2012 survey has something to say about this question.

In a survey of IT buyers (see figure 8) customers/buyers report the following statistics when asked “How many people were on your buying team including yourself — that is, the group actively involved in influencing the short list of vendors considered and making the purchase decision?”:

  • Companies with 100-499 employees: 3 to 4 people
  • Companies with 500-999 employees: 4 to 6 people
  • Companies with over 1,000 employees: 5 to 7 people

multiple lanes

Noteworthy is that in two out of three scenarios the number of employees involved in making a decision is increasing.

What a salesperson needs to know is that buying is a collaborative effort. As such, not only a wider view of the process is needed the typical marketing funnel and CRM single-person view of leads is lacking in a broader view of how customers buy unless used by sales as a single strand in a larger weave.

sales funnel

*Things That Need To Go Away: Marketing and sales efforts, which focus on persons, contacts and a decision-maker and are not holistically geared at accounts i.e. multiple persons.

 

Jan 112016
 

Several years ago I wrote about Not Competing On Price. Sales organizations are in an unenviable state of affairs where competition is more fierce than ever, pressure on sales margins is unrelenting and, due to both information overload and borderline fantasy marketing by sellers, customers are either blind to what sets you apart or, more likely, do not want to pick up enough cues, which would set you apart from the competition.

I say “more likely” because customers are in fact more informed than ever. Partly as a result, Gartner believes that buyers see their interaction with sales as their least valuable part of their buying process.

How should organizations and sales departments respond? Put another way, the question is, how do organizations and sales departments differentiate themselves enough to hold a competitive edge? The answer should be simple. Have a better product and convey the strength to customers already suffering from cognitive dissonance. Easier said than done of course. Where it exists sales must know it and articulate it. Among other things a sales process must become

  • Better aligned to the contemporary buying process, which means not being strict about the pipeline and funnel milestones as defined in your CRM
  • Offer more domain knowledge,
  • A much better understanding of vertical KBRs is a must because you would want to align it to the customer’s purchase
  • Moreover, support and maintenance are tangible factors that remain dissimilar across companies.

Notice that, given our dilemma, these are still non-product differentiators. To keep our feet firmly planted in reality we are not going to see sales managers measuring their salespersons differently. Why? Wall Street, Bay Street, whatever quarterly measuring street.

Where a competitive edge does not exist the price pressure is even more acute.

What to do when a customer sees you as a commodity? What to do when a customer sees you as one of many? The answer is ‘disruption.’ A seller has to disrupt current customer thinking through one or more of the below:

  • Know yourself. If you cannot educate your customer to your differences then you are at a disadvantage. Do you have superior communication and articulation? Either way, you must get better. Do you have valid reasons, experience and stories? If so, maximize their utility. Importantly, be careful assuming that your customer’s knowledge of you is perfect. What they may know may not match what you know. Check and compare.
  • Know your competition. Educate your customer on the competition. Do you know their limitations? Do you know how they are processing their sales strategy?
  • Know your customer. This includes their hot buttons, preferred relationship parameters and interaction style preferences and big picture. The last item implies that the seller could go beyond the point solution and make truly constructive suggestions to customers. The triangulation of engineering, marketing and sales becomes more important than ever. Is this wishful thinking? Quite possibly. Selling organizations are as resource and time challenged as buyers. However, the extra effort and fastidiousness is worth it.

All products being roughly equal, or being perceived as such, something has to give. It will either be the price or your non-product differentiators.

*Things That Need To Go Away: companies and sellers who cannot articulate why they have a raison d’etre.

identical

Dec 102015
 

In the past I have often written about selling to customers and how to obtain new customers. It is a complex chain of interrelated actions and reactions, which even experienced salespersons and successful companies could benefit from reviewing often.

number one

What about obtaining your first client however? What is the approach and system to gain a first customer and to launch your company or product?

Consider these strategies:

  • Start small. Even the most successfully adopted product in human history Facebook started small and in a targeted fashion. The company did not launch as a forum for the world. It initially launched for Harvard University students in the USA, before becoming available to regional universities and going on to being a student-only site before opening itself up. Not only it had gained a core group of users in the process, but had also given itself the opportunity to develop itself. So, when I say start ‘small’ I mean ‘small and targeted.’

 

  • Implicit in the above is the need for identification of the ideal customer. What exactly is the target market? Without it the search is endless and unfocused. Finding the right customer is infinitely more difficult in the universe than it is on your own planet.

 

  • Give yourself away. To quote one Jeffrey Gitomer “give first and give freely.” The idea here and this case is more specific, namely every company needs a customer to be its proving ground, reference or bright spot and so the first ‘sale’ could often be given away. The give-away establishes the product and grabs itself a foothold. Moreover, a paying customer does not want to be the first buyer. Your non-paying or heavily discounted customer is your testimonial and reference.

 

  • I dislike this word, but there I will use it: ‘synergy.’ Where is your product or service complementary and adds in a small or large way to another? Join forces and form a more complete offer.

 

  • Once the above are done become aggressive with your Search Engine Optimization. It is critical that you be found and, as is often cited and you know by experience, most people do not go deep into any site’s search results. Know your industry’s keywords and leverage them on your website and back links. Do the same on the social media you utilize.

With the first customer under your belt it is worth remembering that it is always easier to sell more to an existing customer than to find a new one so do not compromise on customer service.

*Things That Need To Go Away: customers who rightfully feel they are guinea pigs.

start

Jan 062014
 

The title is an exaggeration, but the effectiveness of advertising is not hyperbole.

Why advertising works is a good discussion. We know the message is biased, partial, not challenged and conveyed and narrated by self-interested parties, but the medium is successful.

The tragedy of the below is not a laughing matter, but it is nonetheless instructive to go back and look at past marketing conveyed through advertising. I want my readers to take a moment to filter the below $182 (US) billion discrepancy through the inner ethical lens.

IMG_0001_cr

 

 

 

 

 

 

 

 

AIG, the largest underwriter of insurance in the United States Of America, underwent severe turbulence in the recent 2008-2009 financial meltdown. It was only saved through governmental intervention.

Print advertisement from the ’90s: “financial strength,” “strongest insurance,” “AIG’s strength’s and stability,”… $17 billion in….  adjustment reserves,” “highest ratings,” et cetra.

Reality ten years later: according to Propublica journalism project, “On four separate occasions, the government offered aid to AIG to keep it from collapsing, rising from an initial $85 billion credit line from the Federal Reserve to a possible commitment of about $182 billion between the Treasury ($69.84 billion) and Fed ($112.5 billion).” These numbers help the company remain solvent, while nationalizing it.

Things That Need To Go Away: people believing advertisements, advertisers pitching make-believe and other illusions and delusions masquerading as fact.

 

Dec 302013
 

Miller Heiman has a short article on Channel Trends for 2014.

For someone who is on both sides of the aisle – direct sales and channel management – the article seems correct yet overly simplified.

The trends, according to the article, are:

  • Channel sales will continue to increase
  • New types of channels will emerge
  • The wall between direct and channel sales will continue to crumble

The tendency to foster and nurture an indirect sales route is congruent with the nature of the modern market. The world is tilting towards selling many with less margin. It is a volume play. Yes, exceptions always apply. One example is Tesla, which is selling cars directly. The company has been subject of lawsuits from car dealers trying to stop its direct sales route.

http://www.thecarconnection.com/news/1087492_gm-follows-teslas-lead-plans-to-sell-directly-to-online-shoppers

The article’s title is a misnomer however. While the tendency is there the trend does not belong to 2014. It has been ongoing for a good many years.

Additionally, the case for Cloud – which is addressed – is not as clear-cut given the costs, direct (i.e. margins, recruitment, education and marketing) and indirect (resolving conflicts, manpower and expertise), any company would incur.

The old ‘capital expense versus operations expense’ argument also applies. Cloud is less expensive to start, but from a purely dollar figure perspective it soon adds up to more. A better argument is made with factors such as upfront costs, management and ancillary expenses.

Here it is: http://www.millerheiman.com/blog/Miller-Heiman-Blog/September-2013/Channel-Trends-to-Watch-for-in-2014/

 

Untitled

Dec 292012
 

Who Is My Biggest Competitor?

In sales one typically thinks of his competitors as the other companies in the same industry.

  • Belvedere sales staff likely fret over Johnson & Johnson’s shelf space
  • Dell marketing targets HP
  • Burger King is upset about Wendy’s taking over the number 2 spot.
  • Mazda likely issues internal collateral on how its people handle Toyota customers
  • Etc.

Based on experience, however, would you agree that other companies producing goods or services in the same vertical should every time be relegated to the number 3 spot every time? Consider that. There is that much slack in market for sales and prospects. If only one could convert those into sales, but if one’s direct competitors should be third on the list who or what occupies positions one and two?

One’s biggest competitor is always ‘doing nothing.’ This ‘do nothing’ is where a value or cost-benefit is not identified and companies choose to maintain status quo. Inattention to you has cost you a sale.

The second biggest competitor is likely something outside one’s industry. Any entity has limited resources, which it needs allocated and assigned according to actual or perceived priority. Perhaps your prospect has declined to move forward with the snow removal machines you were pitching in favour of upgrading the in-house cafeteria (or the endless permutations of that scenario)?

Also somewhere in there is commoditization. In our contemporary society there are so many on-going things and change happening at such speeds that not only customers are tired of you and your offering, but also your industry has become pedestrian. There simply is that much competition out there.

Consider the revised competitor line-up in your next sales and marketing effort.

*Things That Need To Go Away: A broader sense of the competition for your prospect’s dollars.