How Do You Attract a Resistant Audience? Three Thoughts

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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.  How do you attract a resistant audience?

Advice from the CEOs:

  • 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. Examples of early adopters are in the SMB segment (startups, 25-200 employees) and the service provider industry.
  • Select channels which are open to your messaging and solution. LinkedIn Groups are 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.

Thanks to Pradeep Bakshi of Foundation3 for his contribution to this article.

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How Do You Move from Early Adopter to Mainstream? Seven Thoughts

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Situation: A company has established market leadership in an emerging market. When you innovate in a niche, focusing on early adopters, you eventually run out of early adopters. The challenge is broadening the appeal to a larger mainstream customer base. How do you move from early adopter to mainstream?

Advice:

  • The challenge is both messaging and cultural. In messaging, you must support the new norm. This means convincing the customer that if they are not with you, they’re being left behind. You need to demonstrate that your established, proven solution is the new norm.
  • The cultural challenge is maintaining a culture of innovation and attracting the right talent while becoming a mainstream company. An attraction to new talent is that you are cutting edge – changing the world. This aura is critical to a start-up. You must maintain this innovative culture as you become the market leader.
  • How do you overcome these challenges? Finding people who’ve been there and done that increases the odds in your favor. We hired a marketer who had helped take another company through the same transition.
  • Hire for excitement, energy and enthusiasm. Quickly remove new hires that turn out not to fit. Maintain a freedom to fail atmosphere. You need people who will take risks, but who will also step back and quickly change direction when the risk isn’t productive. Decision-making speed is a great advantage of small companies.
  • Create an organization that celebrates innovation. Institute “Hack Days” when employees are free to work on projects of their choice. A new product that brings business audience targeting to social media came from a Hack Day project.
  • Keep everyone informed. Conduct company-wide daily stand-ups. Individual updates are quick – 30-45 seconds. This fosters open communication and awareness, and surfaces issues before they become problems.
  • Weekly, send out full disclosure emails including key financial metrics, successes and failures. Monthly conduct executive-only stand-ups. These are longer, but updates are quick and focus on progress to goals, as well as next month’s goals.

Thanks to Russell Glass, of Bizo, Inc. for his contribution to this article.

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How Do You Leverage Digital Marketing? Six Points

Situation: In traditional marketing, many marketers have been more focused on activity than results. In the digital environment, top marketing organizations need to become better at listening to their customers, watching them, and tracking their purchase decision behavior. What does this mean for the marketer? How do you leverage digital marketing?

Advice from the CEOs:

  • The digital world has changed marketing. The traditional marketing campaign was led by creative staff. Marketing was directed by media players and large publishers. Once a campaign was developed the pitch was “buy lots of impressions and customers will come.” During the dot.com boom and into the 2000s there was a shift to ROI – spend $x with Google, get y clicks that will yield z buying customers. This was transactional and could be expressed relatively simply.
  • Behavior has changed. The model has become more collaborative. A potential customer expresses interest and a need. A supplier offers a solution. The potential customer verifies and validates the offer through online communities – LinkedIn, Twitter, Facebook or other platforms, and may eventually make a buying decision based on what they find along the way.
  • The buying decision today is very different from the traditional offer-driven process. All of this can happen in minutes.
  • For the marketer, this means moving far beyond the simple advertisement. A presence is required on multiple social media sites, in addition to their website, to woo potential customers. This is expensive and requires a different level of resource commitment. Therefore, it is important to attribute the appropriate value to each online presence that the customer engages as they evaluate their buying choices.
  • This requires developing complex metrics, which change real time as customer behavior changes, so the marketer can track and understand customer behavior and adapt the offer to the individual needs of the customer. As individual consumers increasingly engage and employ new forms of digital technology the challenge to marketers only increases.
  • The digital marketer who will thrive will develop a sophisticated, metric-driven understanding of the multiple touchpoints and social interactions of a given transaction and will adapt new marketing approaches as the marketing environment continually changes.

Thanks to Vikas Sharan of Regalix, Inc. for his contribution to this article.

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How Do You Negotiate a Challenging Merger? Six Points

Situation: A company is considering a merger. The other firm competes with customers who account for 25% of the company’s current revenue. How do you maximize the value of this merger to the company while mitigating the negative impact on current business? How do you negotiate a challenging merger?

Advice from the CEOs:

  • The maximum risk from the combination is loss of 25% of current revenue. The merger makes sense if you believe you will gain upside which more than counters this risk.
  • Both companies have brand equity. Maintain both brands and to continue to promote them. Maintaining both brands will buy you time to replace business which is potentially at risk.
  • Talk to customers and get their perceptions of the pros and cons of the potential combination. Ask about any concerns that they may have. Understanding the pros, cons and concerns will help you to mitigate negative fall-out.
  • Legally, in a 50/50 split, whoever is the chairman of the combined company will call the shots. If the head of the other company is chairman, you will have little recourse if he decides to fire you.
  • In the current case, this individual has built his company through previous mergers. Visit and break bread with those who were principals of these companies at the time they were merged or acquired. This will tell you a great deal about the individual with whom you entrusting your future. You will also learn what the others did during their mergers to help plan your own moves.
  • Give yourself a back door or Golden Parachute after six months if the merger does not go as you anticipate.

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How Do You Select Good Business Developers? Five Thoughts

Situation: A company wants to expand its business development staff. What is your experience, and what has worked best for you in selecting among business development candidates? How do you select good business developers?

Advice from the CEOs:

  • The first priority is your compensation plan for the new person. There are three basic compensation schemes: High Base/Low Commission, Medium Base/Medium Commission, Low to No Base/High Commission.
  • Choice between these options depends on your own philosophy, as well as common practice within your industry. Compensation is central to candidate selection. The CEOs recommended asking candidates about their own preferences for compensation. If they prefer Option 1, don’t hire them – they either lack experience or confidence. Ideally they prefer Option 3 – they can make more money, but cost you little unless they perform. If they prefer Option 2, probe. They may be good but face personal obligations that make it difficult to choose the high risk/high reward option. Ask about past compensation and performance. Verify any claims made during the interview.
  • You want to structure sales compensation so that non-performers leave of their own accord – without costing you dearly in time or money.                                              
  • What are the most important traits to seek in a good B.D. candidate? Understanding of customer’s requirements as well as purchase behavior and understanding of your product or service.
  • How do you find candidates? Use a Head Hunter who knows your industry and competitors. Use written tests to evaluate the individual’s traits. Let the hunter find and screen prospects and present the top 2-3 to you as a test of their skills.

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How Do You Communicate Benefits Changes After Being Acquired? Seven Suggestions

Situation: A company was recently acquired. The acquirer wants to merge benefit structures between the two entities. While company contributions are similar, distribution of benefits between retirement plans, health plans, and other benefits between the entities varies considerably. How do you approach the staff about the changes in a positive manner? How do you communicate benefits changes after being acquired?

Advice from the CEOs:

  • Ideally, you want to survey employees on what is and is not important to them about their benefits before the package is finalized. This will help you negotiate on your employees’ behalf.
  • Ask the acquirer whether a “cafeteria” benefit program is feasible. This would allow your employees to make choices among benefit options, and to fund these choices either at a company-paid base level or to supplement their choices through payroll deductions.
  • Inform the acquiring company of your state’s regulatory policies on state-specific benefits.
  • Once the new benefit package is finalized, ask for assistance communicating the new package to your staff. Create a simple and concise grid for the program: amount of company contribution: benefits under old program, benefits under new program, use the grid to demonstrate that while the allocation may be different, the company contribution remains the same and the total value of benefits offered is unchanged.
  • If you find that a highly valued benefit is being reduced, consider a short-term subsidy to ease the shift.
  • Be clear about decisions that your employees must make in the new program.
  • If you have access to industry or regional comparisons for like-sized companies, you may wish to share these.

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How Do You Reduce Dependence on a Few Customers? Four Thoughts

Situation: A company has been very successful, but one customer represents over 60% of their sales. To grow, the company needs to diversify its customer base. How do you reduce dependence on one large customer? What are the risks involved? How do you reduce dependence on a few customers?

Advice from the CEOs:

  • The key to getting new customers is to dedicate time and resources to the task. Consider hiring a business development professional – a commission based “hunter” who has experience landing big accounts. You may pay this person a hefty commission for bringing in new business, but diversifying your customer base can be worth the cost.
  • If there is shared ownership of technology co-developed by the company and client and the client does not wish to pursue markets beyond its strategic focus, is it feasible to negotiate rights to pursue this business? The larger client will pursue their own interests, not those of the smaller vendor.
  • Perhaps a win-win can be worked out, but it may be challenging – particularly if the client is concerned that use of the technology in other markets could have a negative impact on the client. Use caution. The easiest way for the client to defend itself from a perceived threat is to sue and bury the smaller vendor through legal expenses. Regardless of who is “legally right,” deep pockets can win through attrition.
  • Consider recreating the opportunity. Create your own adjunct proprietary product with your own software or design talent and use this to expand your horizons. Be aware, the large client can still sue if they believe that your proprietary product impinges on their rights.

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How Do You Choose The Right Strategic Partner? Five Guidelines

Situation: A rapidly growing company is expanding in both its primary market and into new verticals. A number of companies are interested in strategic partnerships. How do you select the right partner in the right space? How do you choose the right strategic partner?

Advice from the CEOs:

  • At the end of the day it’s about a connection with the partnership which extends across both organizations. Look for cultural synergy with the other company. Do your and their managers and employees “click” or are they oil and water? This is a gut assessment.
  • Is the quality of people in both companies complimentary? Is there similar drive for quality and attention to detail? Will technical integration be smooth? Are systems complimentary? At a minimum on both sides need to possess the right skills so that these factors won’t hinder the project. Are sales and marketing approaches compatible? Will teams be able to work together?
  • You need to have strategic commitment across both organizations. Partnerships don’t work if there is only alignment at the top. Executives can’t shove a new opportunity down the throats of those who report to them. There must be excitement about the opportunity across both sides of the partnership. There must be complimentary competencies, capabilities and commitment. Is there a clear understanding of the goals and objectives required to succeed? Reward structures and incentives must be aligned down through the two parties. Conflicts will lead to struggles.
  • There must be a strategic alignment between the two organizations so that both see the partnership as complementing their broader strategic plans. There must be a fundamental strategic win-win. The venture must be seen by each party as core to their business, plans and results. If this isn’t present, the collaboration can collapse when a better opportunity that comes along.
  • Look for some gauge that the partnership is as important to the other party as it is to you. What other partners do they have? Is the size of the opportunity enough so that you are assured of their ongoing attention?

Thanks to Jim Soss of Red Aril for his contribution to this article.  

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Can Marketing Partnerships Work Well? Five Considerations

Situation: A company has the opportunity to form a marketing partnership with another company. The primary potential benefit to the company is gaining access to new customers. On the other hand, partnerships may bring complications. What is your experience with marketing partnerships? Can marketing partnerships work well?

Advice from the CEOs:

  • Marketing partnerships can certainly work, provided that both parties see benefit to the relationship, and –  more importantly – both parties are committed to make it work.
  • Clearly define boundaries with the partner. If either company can perform a particular service, whose customers are who’s? Is there alignment throughout the partner’s organization regarding the partnership? Are their conflicting priorities within different branches of that organization? Test the waters ahead of time and assess how these will potentially impact the partnership.
  • There are potential pitfalls to take into consideration. What is the in-house/outsource attitude of the partner? If there are strong voices for in-house production or service provision, these will not be supportive of the partnership.
  • Monitor the quality of the partnership over time. Successful partnerships are based as much on friendly cordial relations as on business priorities. Are your business cultures and ethics compatible? Who is the champion for the partnership on the other side? What will happen if the champion leaves? Is there a backup champion?
  • Build an exit strategy into the partnership that will allow you to leave gracefully and mitigate financial or good will consequences if the partnership sours.

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How Do You Evolve from Doer to Leader? Four Thoughts

Situation: A company has grown largely through the determination and energy of the founding CEO who is still the principal business development resource. The CEO wants to move from day-to-day focus to a leadership role and to focus on planning for the future. How have others evolved in their leadership roles? How do you evolve from doer to leader?

Advice from the CEOs:

  • Start by developing and managing an organizational chart for the business. Create the organizational chart initially by role and responsibility. Match existing people to the roles. Individuals may fill more than one role, but be sure that the individuals are suited to the roles to which they are assigned.
  • Give ownership of areas of responsibility to others. Make it clear for each area of responsibility that the individual assigned is now in charge. Match projects or assignments with individuals’ abilities and available time. Establish quarterly or annual performance objectives WITH as opposed to FOR each individual – objectives that support company objectives. See that people are rewarded for their results – both soft and monetary rewards – as appropriate to the responsibility held by each.
  • While continuing as the lead of business development, hand off new clients to others as soon as you get them on-board. Let others take on the customer nurturing and maintenance roles. Establish a plan to replace yourself in this role.
  • The EMyth Revisited by Michael Gerber provides a soup to nuts recipe for moving from doer to leader of a company. Everything starts with your organizational chart.

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