Category Archives: Sales & Marketing

How Does a Professional Services Firm Get Known? Seven Ideas

Situation: A professional services firm has opened a new office in Silicon Valley. Their immediate priority is building clientele in their new market. They have an excellent reputation in their other markets, but are as yet unknown in in either Silicon Valley or Northern California. What can they do to create buzz and local awareness? How does a professional services firm get known?

Advice from the CEOs:

  • Hire a part time PR person who is familiar with the local community. For example, this may be an experienced Mommy Tracker – a woman who puts priority on being a mother, but who is also interested in working part-time with a flexible schedule. The role will be to schedule speaking engagements with local organizations, groups or companies.
  • Think about publishing a book, whether yourself or with a professional writer. Tweak it to include a section on start-ups and do a book speaking tour in Silicon Valley.
  • Consider sponsorship of prominent local organizations. In Silicon Valley this could include incubators or entrepreneur groups. These are companies who could benefit from professional services.
  • Offer seminars to target clients, or those that invest in target clients – for example venture capitalists or angel investment groups.
  • Write articles for Red Herring (redherring.com)
  • Get to know the WI Harper Group (wiharper.com) – connected with Walden International. This is a San Francisco venture capital group with limited partners from China, and with a focus on US/Asia technology transfer.
  • Highlight past success in helping clients to gain funding.
  • The suggestions outlined here can be applied to opening a new office in any new location.

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How Do You Create The Best Buzz? Five Suggestions

Situation: A company has an opportunity to use equipment supplied by a partner to create a demonstration project that will highlight their capabilities. They want to create the best buzz possible through this effort. One idea is to work with local service agencies to create a demonstration that will be highly appealing to news outlets. How do you create the best buzz?

Advice from the CEOs:

  • In addition to working with local agencies in your target localities to create publicity and awareness, work with the local newspaper reporters who write about the areas served by these agencies. City reporters are always looking for fresh stories, and will help you to generate instant news that may be picked up by other local and possibly national media. This form of building awareness virally is much more effective than traditional advertising campaigns.
  • Use industry trade shows of potential partners as demo venues by collaborating with the trade show organizers for a live demonstration that benefits the organizers. Let technical trade publications know about your demos. Stories that catch the attention of technical publications can also get the attention of national media and give you visibility far beyond the trade shows.
  • Use YouTube to highlight use and the impact of your service. Assure that your YouTube videos are interesting and attention gathering. This will help generate viral awareness.
  • Look at how Google helped to make Mountain View, CA a wireless city. They worked with the city and created great excitement both locally and nationally.
  • Consider using actors to stage demonstrations, followed by actual demonstrations.

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Is It Time to Raise Prices? Six Suggestions

Situation: A company will be losing a client in the near future. However, the client is still buying from the company as sole source supplier while they develop alternate suppliers. Should the company raise prices, and if so by how much? Is it timely to raise prices?

Advice from the CEOs:

  • A factor in this decision will be your history of raising prices in the past. If you have increased prices to keep pace with inflation and your costs, look at the frequency and magnitude of these increases. Provided that the increase that you are considering is not out of line with past practice, it should not come as a surprise to your client. If you have not raises prices in the past, be prepared for push-back.
  • However you decide, be sure to maintain the relationship. You have a long relationship with this client and you never know what their future needs will be. As to the amount of the price increase, if they are reducing the volume of their purchases, you can raise your prices by 10-20% based on the loss of volume to cover your overhead.
  • Be prepared with logical arguments to explain the price increase to the client.
  • If your discussions with the client’s representative have become tense, it may be better to have someone else within your company lead this discussion. It’s OK to tie the emotional component – having to lay-off employees, etc, – into your story.
  • If you have an advocate within the client company, involve them in the discussion and give your advocate the ammunition that they need to support your case.
  • Adjust your staff and costs to fit the new reality.

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How Is The Economy Impacting Your Sales Plan? Five Views

A company is revising sales forecasts for 2016 and seeks the advice of others. A combination of low energy prices and shaky financial markets sparked by the Chinese decline has left many questioning whether they should revise their plans to account for an economic contraction. How is the economy impacting your sales plan?

Advice from the CEOs:

  • Niche Software Company – we are coming off of a good year. Our industry has seen low impact so far. Going forward we are cautiously optimistic. A couple of clients have delayed projects but didn’t cancel.
  • Services Company – hiring has been frozen. Adjustments to staff count have already been made. Clients are asking us to contact them again early in the second quarter. Opportunities exist in the health care area.
  • Hardware Company – we are running scared. We have cut business and personnel expenses to assure survival. A large customer just announced new plant construction earlier this week – this may help to turn things around. We are assuming this will be mean a longer term rather than a short-term opportunity.
  • Niche Software Company – cutting personal/business expenses. Long term things look favorable, but we have to survive the short term. Attendance at a large trade show this month was a little above last year but we don’t know whether this will yield a significant increase in sales.
  • Trades – Projects with big bank backing are on hold. We see large scale bidding wars for projects. Where there used to be 3-5 bids there are now 15 or more. Looking for consolidation of competition – especially union–based shops.

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How Do You Evaluate Distribution Alternatives? Four Thoughts

Situation: A software company is evaluating its distribution network. Historically they have worked with resellers who aggregate software services into packages for larger customers. Recently they were approached by a reputable distributor seeking a master distribution agreement with favorable payment terms. Is this an option that they should pursue? How do you evaluate distribution alternatives?

Advice from the CEOs:

  • There are at least three objectives to consider: market coverage, margin to the producer, and market risk.
  • For market coverage, evaluate the alternatives in terms of their ability and commitment not only to serve your current market but to expand into adjacent markets.
  • Regarding price and margin, there are two alternatives:
    • Decide what price you want, and don’t worry about the reseller or distributor’s final price to the customer, or
    • Establish a floor price for your product and ask for a percentage commission on sales.
    • Run models on each and decide which will provide the best return on sales.
  • Market risk is more complex. These are different approaches to the market.
    • In evaluating the reseller option, insist on terms in reseller agreements that the reseller disclose the terms of their sales.
    • Sharing of customer databases is another factor. Siemens, for example, considers their customer database as IP and only releases portions of their customer database selectively to resellers.
    • A master distribution agreement has different risks. It puts all of your eggs in one basket. If the distributor adjusts focus away from your software during the term of the agreement your sales and revenue will suffer.
  • Are there conditions where a master distribution agreement may make sense?
    • If the distributor is willing to sign a multi-year agreement with sales guarantees at favorable pricing this mitigates the risk.
    • The central issue is risk and guarantees. If you see the option as a low risk – high return proposition, it may be worth considering.

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How Do You Address a Customer-Supplier End Run? Three Ideas

Situation: A company’s top customer has approached one of the company’s suppliers with a request that the supplier sell directly to them rather than through the company. The supplier normally does not sell directly to OEMs, and has neither the sales force nor the customer service capacity to work with these companies. Nevertheless, following the customer’s request, the supplier has asked the company’s CEO for a meeting. How should the CEO plan for this meeting? How do you address a customer-supplier end run?

Advice from the CEOs:

  • You need well-placed advocates both within the customer company and your supplier company. These advocates can help you to better understand what is behind the customers approach to your supplier, and what the true issues are. You will also better understand how the supplier is reacting to this request.
  • Talk to the boss of the purchasing manager who initiated this and let him know how this will impact your ability to supply other critical parts for their operation.
    • Ask for fast track approval as a preferred supplier.
    • Try to cut this off before the supplier representative arrives for your meeting.
  • You know from your history with this customer that you have had to make frequent delivery adjustments to meet their needs. Further, as a value add you make modifications to the parts supplied to meet the customer’s engineering specs. This level of flexibility is not part of your supplier’s business model. When you meet with the supplier, paint a picture of the downside of working directly with this customer to convince them that they don’t want to take this business direct.

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Is It Time To Change Horses? Four Suggestions

Situation: A company has a business relationship with another firm. The relationship involves co-development of technology as well as marketing and other support. Portions of the relationship have worked, however, the other firm has not kept its part of the bargain in terms of marketing and support promised. What is the best way to approach the other firm to resolve this situation? Is it time to change horses?

Advice from the CEOs:

  • Have you have clearly communicated to the firm both what you are pleased with about the relationship as well as your level of dissatisfaction regarding lack of marketing and other support promise? To whom has this been communicated? Are you sure that your message has gone all of the way to the top?
  • Do a SWOT (strengths, weaknesses, opportunities, threats) analysis on the current arrangement and alternatives available to you to support your trade-off analysis before taking action.
  • Present a marketing option that will address the situation and ask whether the firm will support it as previously agreed.
    • If they say yes, have a contract ready for them to sign.
    • Negotiate other key items at same time.
    • Be sure to involve all parties on your side in the preparation, including the individual(s) who made the introductions that led to the relationship. Additional heads can bring more insight into the options that the firm and relationship offers. Bring the key parties involved to the negotiation, and be sure to prep them in advance.
  • Business relationships should be based on clearly stated deliverables and timelines. If deliverables are missed then it is time to make a business decision – either repair the situation or part ways.

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How Do You Best Leverage Networking? Six Suggestions

Situation: A company is actively marketing to prospective clients and also engages in networking. They want to assure that they are up to speed with current trends in marketing. What are best practices for following up on marketing or networking contacts? How do you best leverage networking?

Advice from the CEOs:

  • Timing is everything. A prospective client may or may not have an immediate need for your product or service, but may develop a need in the future. Assure that you have a program that provides ongoing follow up via:
    • Social Media
    • Phone calls
    • Emails
    • Regular personal follow up
  • Initial follow up should be rapid. Ask for permission to follow-up and set the time frame when you meet a new prospective client. Ask how the prospect prefers for you to stay in touch. Do they prefer newsletters follow-up via social media, or personal follow-up?
  • Draft letter, email and social media communication templates ahead of time so that rapid follow-up is easy.
  • Use an electronic or print newsletter to stay in touch with prospects. Social media have become an increasingly important way to stay in touch with networking contacts.
    • Basic newsletters are usually 2-3 pages, or a one pager with links to see full articles.
  • Look at contact management software: for example Salesforce.com or ACT.
    • Basic sales and marketing subscriptions from Salesforce.com start at $25/user/mo. for up to 5 users, or $65/user/mo. for a complete customer relations management (CRM) system.
  • Quality of collateral is important. It is a face of your company. High quality collateral should have a consistent look and feel, and should remind the prospect why they were interested in you and your company in the first place.

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How Much Should You Pay a Salesperson? Five Guidelines

Situation: A company hired an experienced individual to sell for them as a consultant. The individual initially asked to be paid on an hourly basis. Results have come with surprising speed. Now the consultant is asking for a commission on sales. How much should you pay a salesperson?

Advice from the CEOs:

  • Tailor the commission structure to company objectives. For example, if the objective is to reward new business development, and to retain the individual, try something like:
    • Offer 10% commission on Year 1 sales.
    • If both the customer and the consultant are still with the company in Year 3, the consultant gets a 5% bonus on Year 2 and 3 sales.
    • Repeat this for successive years.
  • If the interest is a long-term relationship, determine the nature of the sales services where the consultant excels.
    • What is the individual’s focus?
      • Hunter/Gatherer
      • Contact manager
      • Relationship manager
    • Have a highly qualified sales expert do a telephone interview of the consultant and offer their assessment of the individual’s talents.
  • One successful sales model includes one measure to retain the job, and another to calculate commissions:
    • Set a dollar quota for sales performance – if the individual does not hit at least 85% of quota, they lose their job.
    • However, calculate commissions based on the gross profit that their sales generate.
    • This properly balances the focus between revenue and gross profit generation. To succeed, the individual must pay attention to both measures.
  • If the individual wants a substantial commission, then don’t pay a substantial base. Instead pay a draw against commissions to allow them to support themselves between sales.
  • Pay on receipt of payment, not on receipt of orders.

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How Do You Introduce a Product to New Customers? 7 Thoughts

Situation: A company produces a high performance product which is priced modestly higher than competing products. They are finding customers resistant to cost increases, even when they acknowledge the advantages of the higher cost product. The company needs to develop a new way to position their product. How do you introduce a product to new customers?

Advice from the CEOs:

  • Don’t compete directly with existing technology. Position yourself distinctly, as a new solution to address unmet needs.
  • Sell your solution “for those times when you need to save time.” Once they start to use your product, they will find it simpler and easier to use than the old product and will convert themselves to your product.
  • Use the pitch: Book an extra client today because this will save you this much time. This plays to customers’ incremental revenue opportunities to justify the cost.
  • At conventions, conduct contests among attendees – try our product versus your old product. Those who can use it fastest, or below a set time have their business card placed in a jar for an iPad drawing several times a day.
  • Sell a lower priced “starter” kit – or provide a free sample with easy to follow directions. Once the customer is sold on the product’s advantages they will be less resistant to the modest cost increase.
  • Conduct seminars:
    • Local gatherings
    • Regional meetings
    • Larger companies
  • Focus on specialty functions within larger target clients – the functions that will benefit the most from your product’s advantages.

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