Tag Archives: Functionality

How Do You Rapidly Ramp Sales? Three Tactics

Situation: A company’s key marketing partner has excelled at analyzing key potential customers, the right decision makers within those customers, and completing sales to them at a premium price. The CEO wants advice on what more they can do with this partner to leverage and boost sales. How do you rapidly ramp sales?

Advice from the CEOs:

  • The company’s current strategy is to start a customer on the company’s product to add additional functionality. Once the customer learns to use the product, they work to extend the customer to other products from the company.
  • It is difficult to win with a “push” sales strategy. The situation described is like that of Linux competing with Microsoft. Everyone knows how to use MSFT, and for most of what they do MSFT is good enough. It takes a particular level of pain or need to justify the pain of transitioning to something different.
    • The only alternative is to show a significant pay-back for the pain that the customer must endure in order to convert, large scale, to another solution.
  • The company’s target customer will be the key manager who will shut down the line because they don’t have the company’s solution. This forces the purchase decision above the manager’s boss to the executive suite. The company’s solution then becomes the alternative that saves the day.
    • Seek a forum or trade show that will put the company’s solution in front of these key managers. Through this venue, create buzz that will make the company’s the booth to visit.
    • It is critical to have a compelling story for potential users when they respond to this gambit and visit the company’s booth.
  • The solution to this dilemma is the same as the solution to the company’s overall strategy.
    • The company’s offering, at this point, is just another alternative available to the customer. While the company has a compelling product, it is not world changing and the company lacks the market presence to make its solutions first to adoption.
    • The solution is to focus. Stop what the company is currently doing and take the time to develop a technology strategy.
    • Once this strategy has been defined, focus efforts on developing the killer application that becomes the reason that people must come to the company to satisfy their need.
    • Once this killer application has been developed, positioning and gaining traction with the customer will become easier.

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How Do You Price a Product and Service? Five Approaches

Situation: A company offers a product combined with a service. Small companies can’t afford the combined price, but don’t need the full functionality of the combined product plus service. An option is to create an offering on a per-seat basis. In this option, how do you price seat utilization? How do you price a product and service?

Advice from the CEOs:

  • Pricing needs to follow value. For large companies, functionality and seamless operation are key. Small companies have different challenges – they have less money and don’t need all the features required by large companies. Configure a limited product for this market.
  • Don’t de-feature the product – create a different use / pricing model. Consider a model that prices based on the user company’s revenue, with periodic review of their revenue and fees paid. As they grow and increase utilization, they increase their ability to pay for, and their need for full utilization.
  • Use a cloud model and create a “pay per amount of use” option. Limit this offering to X number of users or X number of projects to create a different product from the full license option. While this will require monitoring, it will differentiate the partial license option from the full license option.
  • Develop an alternative to what is offered by the chief competitor and create an offering that this competitor can’t compete with.
  • Before making a final decision, institute a formal process for collecting ongoing feedback from customers. This will help to clarify alternatives going forward.

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How Do You Diversify Your Customer Base? Four Suggestions

Situation: A CEO is concerned that too much of her company’s business is focused on two few customers. The loss of a single large customer can potentially mean a significant hit to revenue and profitability. How do you diversify your customer base?

Advice from the CEOs:

  • If current cash flow is good, the company should consider purchasing diversity by buying a company.
    • Consider acquiring a supplier that is in good shape, but with lower margins. They will have the infrastructure to run their own operation, and the purchasing company will have the additional profitability to make the combined entity more interesting.
    • Given the company’s existing cash generation potential, there are creative ways to finance such an acquisition.
  • Why is this a good strategy?
    • Purchasing another company can instantly expand the customer base.
    • Diversifying the company opens additional options to build long-term sustainability.
    • A purchase strategy can bring in a ready-made and smoothly running infrastructure in the form of the purchased company.
    • Diversification can boost the value of the combined company on a more diversified business base. It might allow the company to combine low volume, high profit lines with high volume, lower profit lines. There are advantages to each of these business models.
  • Where can such a company be found?
    • Look both inside and outside of the current geographic base.
    • A candidate could be a higher volume but lower profit supplier of one of the company’s current customers that does not compete with the company’s current offering. Alternately, look at companies with more diversified customer bases in a related industry.
  • Look at the niches that the company’s current customers serve.
    • What similar niches exist? Are there acquisition candidates there?
    • Look at the functionality that the company’s products add for its clients. In what other industries would similar functionality be of value?
    • As these questions are asked, look for candidates that have complementary customer sets, customer bases, and geographical reach.

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