Situation: A software company is developing a new solution for their B2B market. The CEO has been in discussion with a potential partner to assist developing this solution. The question is whether this partner is the right partner. Is it smarter to complete development as a partnership, or on their own with the aid of subcontractors? How do you evaluate a potential partnership?
Advice from the CEOs:
Is the potential partner also a competitor? If so, is the partnership arrangement on or off the core focus of the company’s business. Is there potential for future development in the partnership, or is this just a one-shot opportunity?
What would a new partnership look like? Ask the following questions:
What is the long-term vision for the company?
Does the partnership fit this vision, and under what terms?
Is the potential partnership “sticky”? Will it bring in business that can be nurtured and developed under the company’s shingle?
Until answers to these questions become clear, soft pedal the partnership opportunity and plan for the company’s future.
Take advantage of situations that the partner presents as they benefit you, but do not let these become a distraction to the company’s focus unless the partner is open to working with you as a partner rather than as a source of bodies and skills.
Put a deadline and milestones on the partnership relationship. If they don’t pan out, walk.
Don’t burn bridges, if the partner takes off, then jump back in more strongly, but on terms that benefit the company’s strategy.
For the immediate future and until the situation becomes clear don’t let people become idle. Unless something develops quickly be ready to redeploy them.
An alternative is to stick with the company’s current customers and expertise. This involves investing resources and focusing R&D on solutions for these customers. If the market remains substantial and current customers are the largest players, this has the greatest potential for growing the company’s business.
Situation: A well-established B2B company is starting to work with B2C retailers. It is finding that both the internal and external perspectives of B2C companies are very different. How does a B2B company work differently with B2C companies?
Advice from Ross Johnston:
In the OEM market, manufacturers control all warranty obligations, have tightly controlled procedures for handling and tracking returned goods and are very focused on product quality and operational efficiency.
Leading B2C retailers have a very different perspective. Their focus is on the customer: on encouraging great customer experience and repeat customer visits. Products are sold to big box retailers without warranty, and the retailers provide their own warranty programs. This results in far more returns than for OEMs. Further, product is returned for a wide variety of reasons from failure to work as advertised to the customer simply changing their mind. There is also a wide range in how returned products are handled – from throwing them in the dumpster to returning undamaged items to stock, and few records are kept.
Our challenge is to help retailer and big box customers design, develop and implement recycling and cost recovery systems in our market. This means both developing procedures for the retailers and new channels to cost recovery markets.
First, they need processes to triage returned goods into broad categories: new or near new goods condition for resale; goods which require refurbishing or recycling; and goods for environmentally appropriate disposal.
Second, we have created a software tracking solution – a reverse logistics program – to track returned goods from receipt to their eventual disposition with full end-to-end P&L analysis. This can yield up to a 45% gross margin on returned goods which is shared with the retailer.
We develop additional processes that vary by retailer to help them handle the flow of returned goods.
We want to provide the retailer with an end-to-end operational platform that turns a cost center into a profit center and reduces long-term liability exposure that accompanies landfill disposal.
Situation: A company wants to revamp its marketing materials and web site. They have no in-house resources, and no specific direction has been set. What are the best ways to revamp your brand and marketing materials?
Advice from the CEOs:
The first thing to consider is whether this Is just an adjustment to your current marketing, or whether you really need a broader in-depth analysis of branding, positioning and how well this is communicated by your marketing materials and web site. If it has been several years since your last revision of materials and web site, these may no longer be in step with current needs.
If you are located near a major metropolitan area there are many marketing consultants who can bring both a professional approach and a fresh vision to the task.
Work with your Chamber of Commerce, industry organizations, and your vendors, suppliers and distributors to find companies who have recently revamped their marketing. Check out the web sites of these companies and see which appeal to you. Ask the ones that you like what consultants they used.
If your company sells to consumers, or sells to consumers through outside channels, you should consider social media as a part of both your marketing mix. Even B2B companies now see see value in social media. Choose a consultant with expertise in social media as well as traditional marketing.
Interview several consultants before you make your final choice.
Many small companies are financially stretched and don’t have the dollars to support a major market revamp. Are there ways to reduce the cost?
Consider semester or summer interns for some of the analysis, data gathering and perhaps some of the design or social media work. Students at colleges and universities are hungry for intern positions – both paid and unpaid – to satisfy college course and graduation requirements as well as to get an inside track on future jobs.
Key Words: Collateral, Web Site, Branding, Budget, Intern, Consultant, Vendor, Supplier, Chamber, B2B, B2C, Social Media
Situation: A new start-up has developed a SaaS application focused on helping sales people and small businesses leverage LinkedIn and other social media for prospecting. The Company’s customers build Private Shared Networks which can be used by sales people to accelerate the Pipeline. Their concern is that historically sales people have not adopted sales productivity and prospecting solutions. What have you done to attract and accelerate trial and acceptance when addressing a resistant audience?
Advice from Pradeep Bakshi:
Keep it simple and make the application very intuitive and easy to use.
Do not try to change behavior; make it easier for sales people to do things they already like to do.
Create an instant “I get it” experience.
Bias the interface toward instant gratification. This is critical to generating viral marketing.
Make it easy to tell others what you’ve found – similar to a “Like” button to share a YouTube video.
There are 15 million sales people in the US.
You won’t get everyone, but you want to get the “believers” and avoid the “haters”.
You must quickly find segments of the market who are likely early adopters. For us, the early adopters are in the SMB segment (startups, 25-200 emp.) and the service provider industry.
Select channels which are open to your messaging and solution.
LinkedIn Groups are becoming an excellent way to network with like-minded people who can spread the word.
Look to past contacts to whom you have provided value and who value you. They are more likely to get your value proposition and introduce you to others.
Allow customers to collaborate with referral sources: potential business partners and collaborators who aim at the same audience that you will serve; and lead sharing partners. These individuals can help you find customers who will value your solution.
Interview with Naeem Zafar, President & CEO, Bitzer Mobile, Inc.
Situation: Starting a new venture is a daunting task. You must determine market need and land your first few key customers on tight timeline and budget. What are the most important foci for the start-up CEO?
Advice from Naeem Zafar:
The answer lies in what I call the Three Clarities.
Clarity #1 – Deep Knowledge of Customer Pain Points
The fundamental point is that your eventual success is not about your technology – it’s your ability to understand and address the needs of your customer.
Research and talk to potential customers. Ask them about their pain and problems (and not about your product). What makes their job or their lives difficult? Learning these facts takes time, patience, persistent questioning, and open listening both for what they are saying and what they are not saying.
Once you have a clear idea about their need and can succinctly define it, you must determine whether your capabilities can address the customer’s need.
Clarity #2 – Understanding the Purchasing Behavior
Once you have identified your target customer, their need and your ability to meet that need, you must understand their current purchase behavior.
Have they ever bought from a startup before? What happened when they did? Are they happy or unsatisfied? Where are the gaps in satisfaction?
Particularly for a start-up with limited credibility, it is critical to identify those purchasers who will take the risk to buy from a new company.
From what you find, determine how you will frame a personal relationship with the likely buyer – how you will frame both your solution and the buying experience – and build a psychographic of the buyer so that you can quickly determine likely customer candidates.
Clarity #3 – Understanding the Decision-Maker’s Sense of Urgency
Who makes the purchase decision? In B2B sales is it the CEO or someone further down the organizational chart? Who approves the purchase budget?
Why now – do they have their ”hair on fire” so a decision must be made now?
The essential question is: what are the alternatives to not having your solution?