Category Archives: Sales & Marketing

How Do You Leverage Digital Marketing? Six Points

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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 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 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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When Do You Focus on the Plan –  When Do You Adjust? Four Guidelines

Situation: The dynamics of an early-stage business require balance between focus and opportunity. Both are important in a dynamic business environment. The challenge is in the balancing act. When do you focus on the plan, and when do you adjust?

Advice:

  • Never allow friends to become statistics. Think of your customers as your friends. Often the most loyal and vocal friends were early adopters and got the company where it is today. They remain important participants in the conversation and should always be in focus.
  • When using social media to communicate to your audience, remember that this is a face-to-face conversation. This is a key point of focus. Remove as much friction from online interactions as you can. Make it as easy as possible for people visiting your web site to buy. This requires both live interactions with users and attention to detail. If a question keeps coming up, answer it; put the answer right up front on your web site where it cannot be missed. We’ve all made hundreds of tweaks, each tiny. Each has removed a point of friction. As the company grows it is easy to lose sight of these details. Never lose sight of details.
  • Much of what businesses face is transitory. It is important to stay nimble and not get stuck fighting the last skirmish. Early in our business history we found that a subscription service was difficult for institutional users like purchasing departments in schools to understand. We focused on fixing this.
  • Be careful not to chase bright shiny objects – opportunities that take you outside your principal market competence. Would you try to modify a hammer to put in screws? One company’s principal product is a communication device for kids with verbal challenges. Some have suggested that it could also be a teaching device. In the future there may be room in the company’s plan for a teaching device, but this will be addressed as its own market and application when the company is large enough to diversify.

Thanks to Phil Bookman of Assistyx for his contribution to this article.

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What are the Key Strategic Components of a Marketing Plan? Five Points

Situation: A CEO has decided that his top opportunities are to increase visibility and gain market share. As he focuses on these opportunities what are the areas on which he should focus as he builds his plan? What are the key strategic components of an effective marketing program?

Advice:

  • The best marketing plans don’t start with your company, product or service, They start with a focus on your customers and the benefits you can deliver to them.
  • The first step is to identify who your customers are. This can be challenging in B2B businesses. For example, for a company offering outplacement solutions, there are several possible customers: the HR department at the company seeking outplacement services; the CFO at these companies; the HR department at companies seeking good candidates; and the individuals who are going through outplacement and seeking new positions. Each of these audiences has different objectives, priorities and approaches. To succeed, the company needs to connect to each of them where they are and be prepared to offer effective solutions.
  • Once you have identified your target customers, the next step is to develop messaging and message delivery systems that capture and maintain their attention. The messaging must express a differentiation that is easy to grasp – something that clearly sets you apart from your competition.  In technology marketing, Apple’s Super Bowl commercial, with its man-versus-machine contrast, is one of the most famous examples of this.
  • Your campaign must consistently touch your potential customer base. Research suggests that this requires a minimum of 4-5 touches to effectively gain customer attention and to communicate your message.
  • Accompanying the messaging and the increased visibility that you seek, you must have an effective way to respond promptly and directly to customer interest or inquiries. Rapid and responsive follow-up are critical to success.

Thanks to Sanjay Sathe of Rise Smart for his contribution to this article.

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How Do You Design an Effective Sales Model? Eight Points

Situation: A company is in the process of building an inside sales program to complement their outside sales capabilities. What are the most important strategic components of an effective sales model? How do you design an effective sales model?

Advice:

  • In a marketing/sales system, marketing is the precursor to everything. If you can’t effectively deliver your message to your audience, you have no lead generation machine and sales must resort to cold calls. In today’s online world, two of the key components of a marketing system are email and online campaigns, combined with tools for rapid and responsive follow-up.
  • In an effective system, the inside sales team has primarily responsibility for following up on leads. This team’s role is to qualify the prospect responding to the company’s marketing outreach. Is this person the right buyer for their company? If not, who is?
  • A strong rapport between inside and outside sales is important. If this isn’t present opportunities are being lost.
  • Has the company allocated an adequate budget to fund an outreach strategy? If not, when will they?
  • The most critical aspect of the inside sales rep’s role is to be an effective filter in collecting and passing data on to the field sales force.
  • Many inside sales reps fail because their performance is measured on the number of calls made, not on the quality of the calls, information gathered, closure rates, and the value of closures. Effective incentives for inside sales are based on the quality of data gathered and on the success of field sales in closing the leads they receive from inside sales.
  • The effectiveness of outside sales comes down to choosing the right people. The 80/20 rule applies here. Typically, one out of five field sales reps hired is truly successful, one is marginal, and three don’t make it. Hire based on past experience selling to the company’s target customer groups, subjective elements aligned with company culture, and careful reference checks.
  • For the CEO, attracting and hiring good people this individual’s most important role. 

Thanks to Sanjay Sathe, President & CEO, RiseSmart.com for his contribution to this article.

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How Do You Reset Pricing When The Landscape Changes? Four Parameters

Situation: A company sells customized products and sets pricing per product/per customer. A large client has proposed to purchase product rights across a number of products and uses. Their technology is early in its expected 5-year life span. How should the company set pricing for this customer? How to you reset pricing when the landscape changes?

Advice from the CEOs:

  • Start with a series of questions: What is the value of your technology to the customer? How much competition do you face? What other solutions are available to the customer?
  • Based on this framework, ask contacts within the customer company open-ended questions that will reveal what is important to them including: What are their licensing objectives? What is their planned use of the technology? What protections do they seek? You need to understand these before you can make decisions on pricing.
  • There are several pricing scenarios: (1) Set up a scale with a declining pricing driven by volume. (2) Would they entertain a large lump sum payment now, non-transferable if the customer is acquired by another company? (3) Would they entertain a significant annual fee to cover a preset number of uses and volumes, with small increments for additional purchases? (4) Find out what the customer is willing to pay, but you set the terms. The final arrangement will depend on the answers to these questions as well as the priorities of the customer.
  • Ask what guarantees the customer desires to protect their position. This includes: the customer’s key risk factors and whether they want exclusive or usage rights. Exclusive is worth more.

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How Do You Increase the Value of Social Network Interactions? Five Thoughts

Situation: People participate in social networking sites for several reasons – to network, to promote their businesses, products or services, and to gain insight through crowd sourcing. For these audiences, how do you increase the value of social network interactions?

Advice from the CEOs:

  • Encourage participants to move from a short-term to a medium-term focus. Short term focus is about lead generation, immediate results and buy right now. Think of the man in the flashy sports coat selling his products on late night television. This may generate a sale but with low engagement and commitment. Alternatively, if you focus on engagement you start to build growth which is more sustainable. Growth which will persist with more momentum.
  • Clarify your objectives. Are you interested in sales or influence today or this quarter? How much effort do you want to put into it and what payback do you seek?
  • Be patient. Take the time to develop quality content. This time is an investment which pays back both in the medium and long-term.
  • Don’t treat people as though they can be manipulated into buying from you. There is a karmic cost to this approach. Look instead at the potential benefit that you can provide that will attract people to your content. Think in terms of reciprocity – give first and let others decide how they will respond.
  • Try an experiment. Propose a simple question: “What do you want?” Ask the question three times, each time with a different thought in mind – first annoyance, then confusion, and finally empathy. Rather than speak the questions, send them via instant message one after the other. The words of the message were exactly the same each time, “What do you want?” Without tone of voice, expression or body language, the receivers could instantly tell me what I was thinking in each case. The same works in social networking. People can read where you are coming from based on how you position your content. If you want to increase the value of what you have to say or offer, offer it openly and invite your audience to respond.

Thanks to Kenneth Vogt for his contribution to this discussion.

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How Do You Present Your Solution to Potential Clients? Eight Recommendations

Situation: For an engineering solutions company, one of the challenges is engaging potential customers with the idea that a domestic solution can cost-effectively meet their needs. If you can combine a manufacturing solution with the service solution this helps. How do you present your solution to potential clients?

Advice from the CEOs:

  • Know your clients. Clients have expertise of their own. However, they may lack expertise in all the disciplines necessary to create a full product. How will you fill that gap?
  • Know your strengths. Design is an iterative development process. If you increase process efficiency you can complete more process cycles in a given timeframe, advancing to final product more quickly.
  • Know your key differentiators. Target clients for whom your differentiator is a critical need. For example, do not encourage all of your clients to manufacture overseas. However, if they insist and lack experience managing overseas vendors, be prepared to handle this for them. Consistency of personnel across the life of a project is important, particularly the core team.
  • Know your competitors. How do they handle similar challenges to those that you face? 
  • Know your vendors. “Right-sizing” your contract manufacturer to your client’s product is important. Things will go wrong, and you must assure that the contract manufacturer will give you the priority to get things back on track to meet your launch date. 
  • Know the risks. Invention and innovation require a plan to mitigate the risk that new solutions represent. Develop the design along parallel paths and stage higher risk components or pieces of the design that represent critical path inventions such that they are proven prior to moving forward. If necessary take that feature out of the current design in order to develop it to a production-ready solution for the next product on the client’s roadmap. 
  • Know the situation and client expectations. Sometimes an invention or innovation is the reason for the new product.  In these cases the key is managing the client’s expectations regarding the significantly elevated risks that come with invention. Proceed with your and the clients understanding that the phase gates and even the production dates will slide according to the progress against developing that critical path invention or innovation.
  • Know your expertise. Expertise in material selection and understanding what can be done with materials in the manufacturing process is not trivial. The same is true of vendor qualification, particularly when the project involves new materials.

Thanks to Eric Bauswell of SurfaceInk for his contribution to this article

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How Do You Build an International Presence? Seven Guidelines

Situation: Companies are looking at market expansion opportunities. International expansion is one alternative. In the past this was done largely by sending expatriates to foreign locales. More recently there has been a trend toward hiring locally. How do you find the right talent locally? How do you build an international presence?

Advice:

  • Everything starts with the basics – a good job description.
  • Finding people is easier these days with social networks like LinkedIn, Facebook, Xing, The Meet Group, FlexJobs, TikTok, Reddit and Quora. However, finding the right people remains a challenge.
  • Invest time and effort to research your target market. Which country is a market or has the most likely prospective clients? What is your competitive advantage in that locale?
  • For a hiring company without an existing presence in the local market it is also a challenge to convince good local candidates that yours is the right company to join. It is important to understand the local business culture and values, and also to offer career-paths to qualified candidates.
  • Don’t assume the need for multiple offices as you start. You can start with a highly mobile person working from home who knows the local language(s), customs, and who already has contacts in your target market.
  • It is often assumed that it takes one year or more for an expatriate to be efficient locally, and that hiring locally often accelerates first years’ startup-time. However, the local person has to understand and “fit” into the corporate/head office culture.
  • Working with an international executive search firm to find qualified local talent with the right fit to your business and needs can greatly improve your odds of success.

Thanks to E.J. Dieterle, President & CEO, YES Partners, Inc. for his contribution to this article.

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