A small company has need for legal advice, but is unsure how to properly utilize a lawyer. Legal costs have gone up over the last decade, so expense is one concern. Another is a desire to understand how to form an effective relationship with a lawyer or law firm, and how to effectively manage billable hours. Bottom line, how can a lawyer help you meet your business goals?
Advice from the CEOs:
First, seek the counsel of a firm that specializes in small businesses. Just as you would seek a specialist physician to treat a serious medical condition, SMBs are best served by corporate lawyers who understand how they are different from large corporations and who can advise them at a rate and under an arrangement that fits their financial situation.
Schedule regular “off the clock” lunches and conversations with your lawyer. The ideal lawyer for smaller companies serves as an “outside counsel.” Your outside counsel is essentially your legal quarterback and should be willing to meet with you off the clock to discuss general business needs. Of course, as a courtesy to your lawyer, if your conversation starts getting into areas where you are receiving legal advice you shouldn’t expect free advice.
Know what to ask your lawyer versus what to ask your auditor and tax specialist. Each has a separate and distinct domain.
Trust your lawyer – or find a new lawyer. The best legal relationship is when your lawyer is treated as a member of your team. Sharing the business context aids your lawyer in advising you.
There is no need to overspend on lawyers, but you do need to assure that you spend for what you need. A good relationship with your lawyer can help you to walk the line where you are spending appropriately.
Special thanks to Deb Ludwig of DJL Corporate Law for her contribution to this discussion.
Interview with Sai Gundavelli, CEO, Solix Technologies
Situation: A company has top talent and a better technology solution. However their large competitors continue to compete by discrediting them – “nobody was every fired for choosing IBM!” How do you compete effectively against large incumbents?
Advice from Sai Gundavelli:
Invest in your product.
Work to attain best-of-breed status in your industry with a constant focus on and investment in building a great technology. Solix’s constant goal is to be the technology leader in information lifecycle management and Data Privacy.
Be organic and focus on integration, smooth operation and scalability. Build your system from the ground up. An organically designed solution where the pieces work seamlessly offers higher and more efficient performance.
Invest in alliances.
Solix continually invests in our partnerships, including our OEM relationship with Oracle Financial Services, and we have more such partnerships in the works that will help us expand our presence in the market. Partnerships increase your presence and visibility as you scale your own organization.
Focus your efforts.
We at Solix are 100% focused on our product, whereas our large competitors are juggling multiple priorities, like a juggler trying to keep a large number of balls in the air. While we are smaller, this allows us to more effectively focus our efforts without lots of conflicting priorities. We focus exclusively on information life cycle management and Data Privacy.
Have others talk about you.
Solix’s answer to our competition is let our customers speak for us. We have many happy customers such as Honeywell, Duke Energy, American Tires, who are happy to participate in joint webinars and customer case studies. We work closely with them on the latest developments and direction and use their feedback to guide future product direction.
Situation: A small company wants to land one additional large account per quarter. They utilize an array of marketing activities but aren’t sure where to concentrate their efforts. From your experience, how do you identify and land your next big customer?
Advice from the CEOs:
Landing large accounts is more of a relationship game than a marketing game. Develop a list of targets. Determine who you want to approach as the key decision maker, and work your own network and those of friends to gain a personal introduction.
If you and your principal target customers have operations overseas try to develop relationships between your and their overseas managers. Social networks abroad can be more accessible than in the US.
If you plan to introduce a new product or service, ask current customers whether they know of anyone who might be interested. This can prompt their interest or get you a significant lead.
Once you identify potential targets, conduct third party surveys of their industries. These can yield valuable insights into your targets’ organization and needs and help you better position your offering.
If a target customer has multiple divisions, initiate a relationship with a single division first and then leverage this relationship to develop additional business across the company. A number of small companies have figured out how to do business with multiple divisions of a single large company.
Trade shows are underutilized by many companies. Schedule meetings with target contacts In advance of the show. Even a simple visit to their booth can lead to a significant meeting. If you have limited resources, simply register as an attendee and use the show to network with potential customers.
Interview with Richard Owen, CEO, Satmetrix Systems
Situation: If you are not creating promoters of your product or service, you are inhibiting your own growth. Growth is challenging and if you don’t have positive word of mouth it becomes more expensive. How do you find and focus on your promoters?
Advice from Richard Owen:
Calculate and understand your “Net Promoter Score” – the percentage difference between “promoters” and detractors.” Promoters are those customers who would highly recommend your business, detractors have a negative perspective.
It is important to attend these two audiences – “detractors”, who create negative word of mouth, and “promoters” who create positive word of mouth. Detractors can be targeted for service recovery. At the same time, you must identify your promoters and find ways to get them to actively let others know about your business. Both negative and positive effects are being amplified today by social networks.
Understand what your business does that creates detractors and promoters. Gather and analyze root cause data to provide insights around the actions you and your team should take to change the balance in your favor.
Hold employees accountable by “stack ranking” the customer performance of each of your teams or employees. In part, this helps you to understand areas of strength and weakness and allows you to create individualized or group action and coaching plans. There is also a tendency for groups below the average to improve performance because they are being measured.
These are simple ideas, but making this work in practice can be a challenge. Setting up an effective system takes more leadership than leaders typically realize and is often counter to the short term realities of most companies. Success requires a long-term perspective and an external versus internal focus. And, of course, the right systems!
While the leadership of many mid-market companies are as sophisticated as that in large companies, mid-market companies lack the resources of large companies. A focus on action around promoters and detractors allows a company to get 90% of the value for 10% of the effort in customer experience management.
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.