Category Archives: Sales & Marketing

How Do You Generate Scalable Manufacturing? Four Suggestions

Situation: A company has built a strong prototype line capable of handling projected volume for the near-term as they scale up production. Their long-term plan is a fabless model through manufacturing partners. They have solid IP counsel and protection. What are the most critical elements of scale-up? How do you generate scalable manufacturing?

Advice from the CEOs:

  • The answer will depend on the product strategy, if the near-term focus is on quick tactical wins.
  • The most critical elements of the scale-up will be:
    • The planned speed of the scale-up. A tactical approach, which will make limited demands on production near-term supports a prudent scale-up plan.
    • Having the right business development talent to generate quick wins with smaller volume opportunities to feed the scale-up.
    • When you are ready for larger volume – and your scale-up capacity can support this – hire an experienced sales professional who is known in the industry and who can bring you some relatively quick higher volume contracts.
  • Que near-term contracts according to the sales cycle.
    • Design cycle – build awareness of your capacity among significant market players and focus on quick turn-around to respond to their demand.
    • Qualification cycle will be longer, perhaps 6 months. As your brand awareness builds push for qualification orders which will be larger, but still within near-term capacity.
  • Focus business development efforts on building strong awareness across your target companies. Some companies tend to limit early knowledge of vendor capabilities between their divisions until they have confidence in the vendor’s ability to deliver. Optimize customer awareness by:
    • Cultivating business partners who can facilitate a high-level approach within your target customer companies.
    • Start creating a small forum of industry savvy individuals who can become your champions. Leverage this forum to spread your message and bring you opportunities.

What is an Effective Sales Compensation Plan? Seven Thoughts

Situation: The CEO of a software company pays a high base and incentives for their key sales person. While this is in line with the company’s industry, the CEO wants the opinions of others as to the comp packages they offer and any controls that they put in place. What is an effective sales compensation plan?

Advice from the CEOs:

  • While the paid seems high, your industry may be different from other industries. Most see a 50/50 split between base and incentive as the norm.
  • Consider a draw system so that if the individual falls behind you have the option to reduce future draws.
  • Look at both the compensation formulas, and at the individuals’ predilections and the behaviors that you want to generate. Compensation should align with desired behavior and results.
  • Do you have bonus incentive plans in place for your sales support people? Consider these, and check whether the goals and objectives for your sales and support people complement each other. They should.
  • Consider a discretionary bonus pot that you can use to reward specific achievements at your discretion.
  • What will you do if your sales person performs significantly below target – for example, this person is only hitting 40% of the objective after 2-3 quarters?
    • Consequences for non-performance should be clearly understood by both you and the employee before you launch any new plan with the individual.
  • Whatever you decide for this person, you may well be setting a standard that you will have to live with as you hire additional sales personnel.

How Do You Rebuild a Company? Nine Strategies

Situation: A CEO is in the process of rebuilding the firm following a period of inactivity. Historically their marketing was word-of-mouth. How do you reestablishing a network which has been dormant for a period, find new clients and communicate an updated value proposition? How do you rebuild a company?

Advice from the CEOs:

  • Track down and visit old customers and contacts. Let them know that you are rebuilding the company and ask for their advice and help.
  • Use LinkedIn to find and reconnect with old contacts. Have breakfast or lunch with them, even those who are retired. Reestablish old connections and ask for an update on their companies and activities.
  • Focus on your knowledge base and the results that you’ve produced historically. There are more technology choices available now than there were in the past. Help old and prospective new clients to navigate the array of choices.
  • Development assessments to show your prospects where they are and where they need to focus their effort.
  • Many have built companies on their own – without professional assistance. The results often look good on the surface but lack a solid foundation. You have the perspective and expertise to bring it all together in a coherent and cohesive strategy.
  • Rejoin professional associations and networks that you may have dropped.
  • Go virtual – use virtual assistants to manage expenses while you rebuild.
  • Do webinars, and give talks on developing and executing a successful plan.
  • Create some pro-bono or low-cost programs for charities. Your target is the Board Members who may become future clients.

How Do You Revamp Your Sales Team? Seven Solutions

Situation: A company is faced with the imminent departure or retirement of several key sales personnel. This presents the opportunity to rethink and rebuild the sales team. What is the best way to take advantage of this opportunity? How do you revamp your sales team?

Advice from the CEOs:

  • The timing is good. Take advantage of this opportunity!
    • You’ve identified the next generation of sales leadership. Now determine their role building the future.
    • This is an opportunity to reset your vision for the next 3-5 years.
  • The task of the new sales leaders is to learn the products, customers, and processes. One of the best ways to do this is in the role of sales engineer.
    • Be the listener first – become the solutions person.
    • Use existing company personnel as resources to develop closer relationships with key people within the company.
    • Have existing staff can introduce them to current customers and point them toward new opportunities. Focus on impeccable customer service.
  • What are the immediate priorities for the new sales leaders?
    • Do what must be done.
    • Observe experts on the job.
    • Listen and learn.
    • Ask lots of questions.
    • It’s scary, but don’t worry – just do it!
    • Let others assist.
    • They will make mistakes – it’s called learning.
  • Be sure to build an approach and team that can support both your existing core business and build new opportunities.
  • You need to replace the capabilities of those who will be retiring, and at the same time bring in new opportunities for future growth. This includes sales hunters who are good at finding new customers and helping them define their unique needs.
  • What fears or concerns do you see in the new leaders?
    • Fear and concerns regarding short and long-term roles.
    • Focus on the near term. The President is focused on the long term. Focus now on visiting customers, being introduced to them, and learning about them.
  • Are you fully focused on marketing of your services?
    • What is your Sandbox? What is your Value Proposition? What is your Brand Promise?
    • Define these and let the definitions guide your development of the sales leadership as well as the search for additional personnel.

How Do You Manage Residual Commissions? Three Thoughts

Situation: A CEO is renegotiating the company’s agreement with a sales person. The sales person wants a declining residual commission on sales from past customers, regardless of who is servicing the account. A consultant who knows the industry advises the CEO to focus on new sales. What are the implications of each choice? How do you manage residual commissions?

Advice from the CEOs:

  • There are two types of salespeople: Hunters and Farmers.
    • Hunters focus on new business and generally get paid first year, then in later years only on sales that come specifically through their efforts.
    • Farmers focus on ongoing relationships with existing customers and are the service people for those customers. If they are paid commissions, they get paid on the ongoing sales that result directly from their efforts.
  • It is rare to find a salesperson who can manage both of these roles well, so companies often divide responsibilities, and any commissions paid, according to responsibility.
  • Decide what behavior you want from your sales person and pay for this – make the distinction between hunting and farming. Then ask the sales person which they want to be. If they say “both,” challenge this and let them know that they need to make a choice.

How Do You Find Your Sweet Spot? Seven Suggestions

Situation: A company’s sales are bumpy. The CEO thinks that this may be due to a mismatch between products that they offer and their customers’ needs. They currently use online surveys to capture customer needs and input. How do you determine customer needs? How do you find your sweet spot?

Advice from the CEOs:

  • The most important first step for a smaller and growing company is to clearly identify the customer niche that they serve. This must be a niche where the company can out-serve their competition.
  • There are two types of niches to consider:
    • A product/service niche focused on a specific set of products and services – one where you can offer a differential advantage over your competition and become known for this, or
    • A customer niche – a specific set of customers that you dedicate yourself to serve in a way that provides a differential advantage.
  • An example of the product model is an individual who started an e-commerce site for lacrosse equipment – products not commonly stocked in sports stores. They offered a wide range of lacrosse products, built an online community, shared articles, etc. and became THE place for lacrosse players to get their equipment.
  • An example of the customer niche model is to focus on a population and build a concierge or member-only service. The niche here is the buying group. This can be employees of specific companies or government workers as examples. Costco grew using this model.
  • For an early-stage company, survival is about single pointed focus on that niche where you can provide better products/services or better serve your customers than anyone else. As you grow you can diversify based on the reputation and loyalty that you gained early on.
  • Look at competitors – how are they gathering customer preference information?
  • Look at your passion – is it products or people? Choose a niche that fits your passion.

How Do You Market to Company Insiders? Three Suggestions

Situation: The key to a career development company’s growth, historically, is leveraging relationships with insiders in potential client companies who know the needs of their own companies. The key benefits to these people are access to good people, no recruiting fees and feeling good about the experience. What is the marketing message to this group? How do you market to company insiders?

Advice from the CEOs:

  • Ask them. You already have a number of company insiders who work with you. Develop a detailed survey to query what they see as the key benefits of working with your company, and which of these benefits are most important to them.
    • Consider a broad quantitative survey that you can administer via the web.
    • Complement this with a smaller in-depth interview survey to understand qualitatively how they benefit from their relationship with your company and the service that you provide.
  • Your equity is the experience that these people enjoy when they work with you – this is your leverage.
  • Your pitch is emotionally oriented. Stick with this. Saving recruiting fees will not be as important given your focus and the company insiders that you are likely to attract.

How Do You Manage Employees Expenses? Three Thoughts

Situation: A company does not pay a lot of employees’ expenses but does pay mileage expenses for sales people and a car allowances to the sales manager. Sales people are paid 20% base and 80% commission. The CEO is interested in how other companies handle employee expenses. How do you manage employee expenses?

Advice from the CEOs:

  • If you pay mileage, require that employees receiving mileage allowances to keep a log of business mileage:
    • They should track where they went, with whom they met, what the mileage was, etc. To assist employee compliance while respecting employee time, make it simple using Excel spreadsheets or an online tracker.
    • Don’t pay any mileage expenses without submission of proper documentation.
  • Fire a thief. If you catch an employee cheating on their mileage expenses, let them go. This is an important example for others.
  • For car allowances – ask CEOs of other local companies in markets similar to yours what their policy is. If it turns out that your policy is overly generous, consider cutting or reducing your allowance.

How Do You Expand Internationally? Five Suggestions

Situation: An early-stage software company is expanding internationally, both offering services to international companies from their Silicon Valley base, and building a presence overseas. What land mines should they avoid? How do you expand internationally?

Advice from the CEOs:

  • Be more strategic than opportunistic. Europe is very interested in start-ups. Investigate potential locations thoroughly. For example, Luxembourg and Spain are not the most reliable markets or locations for basing a business.
  • There are already good networks in Europe that you can plug into so that you don’t have to build everything yourself.
    • There is a European organization called Open Coffee Club that attracts high tech and social media start-ups. You might consider either partnering with them or buying into their network.
  • You can set up a corporation in Cyprus to leverage tax advantages and build a network covering Europe.
    • To have geographic reach across Europe, you probably want two locations in Europe and one in Russia. Look at Ireland and Romania.
    • Many Russian oligarchs have their investments in Cyprus and may provide a source of investment funds.
  • Investigate the European Investment Fund and their sub-funds like the JEREMIE Holding Fund. This is a large government-funded investment pool focused on technology, innovation and start-ups.
  • Foreign companies are attracted to the US because we have the right ecosystem for technology development. However, a bridge strategy for European companies who want access to US funding is tricky. The key issue is visas which have limited duration and may be difficult to renew. Also, immigration frowns on foreign business people who visit the US too frequently.
    • Have you considered helping start-ups build through their early stages – reducing risk of early failure – before helping them come to the US?

 

How Do You Optimize Your Business Model? Six Points

Situation:  A company is in the process of shifting their business model to better address customer needs. They have three different models under consideration. Management is split between these models, but must arrive at a consensus. How do you optimize your business model?

Advice from the CEOs:

  • Right now, you are considering three different potential models:
    • Tools – your old model
    • Data – produced by your old model
    • Service – your new model
    • These are different models with different prospects.
  • The money makers in marketing focus on data, not tools. Data is information, and this is what is valuable to clients. If you want to focus on the data component of your offering.
  • Currently, you are scraping data from social media and matching this to your client’s database on a real-time basis. There’s a model and value here because you are enhancing your client’s current database by making it more useful and actionable to them.
  • You have tools to enable and add value to existing client databases by allowing them to better segment their database. Again, there is value here.
  • Your core IP is the ability to correlate diverse data sources. Have you protected this IP? If not, this needs to be a top priority.
  • How much information that you scrape from social media sources can you share without violating privacy? This is something to think about because people are becoming increasingly sensitive about companies collecting their private information.