The software market is so crowded with solutions that developers must get it right, and get it right fast. Going to market with a half-baked app (in industry parlance, "minimum viable product") is a dangerous strategy. In fact, you're not likely to make it out of beta if you and your customers don't agree on what "minimum viable" is.
I've spent the bulk of my career helping make startups successful. The failures I've witnessed exhibited shockingly similar root causes. Right behind a lack of funding, a dysfunctional corporate culture can quickly disable a promising startup. As if entrepreneurs don't have enough to worry about with payroll, product development, marketing, sales and operations, they also have to closely monitor their developing company culture.
Every week I receive a lot of sales solicitations via email and phone. Frankly, I get so many that the calls go to voicemail and email goes unread. Like most buyers today, I'm busy and I don't want to listen to every pitch. I'm usually focused on two or three "big" projects at one time, and everything else is an interruption. In other words, I'm a normal B2B buyer in every sense.
If you are in sales and marketing, the best advice I can offer is to think like your customer. Common sales advice tells you to learn the customer's pain on early calls and then pitch a solution. Who is going to give you the time to learn their pain?
Customers are not there to serve your needs, you are there to serve theirs.
This means you have a lot of homework to do when you are enter a new sales role. Here are what I consider to be the minimum standards you need to meet before you can add value to a prospect and make a sale:
1. Understand who your buyers are. If your marketing department has not done this research, demand that they do. For each role your company sells you, you need a detailed buyer persona that discusses the role, pain, needs and rewards this person seeks to do their job well.
2. Ensure every customer-facing transaction adds value. Even appointment setters need to add some value to a cold or follow up call. Few things are more frustrating than a pitch where it is unclear what the "win" is for the prospect. At the end of this first call, I should want to move on to the next call, not have to accept the next appointment just to get the basics. This is one of the main reasons why your prospect is a no show to follow up calls. At a minimum, every customer-facing person should be able to discuss three to five solid and measurable value propositions of your product.
3. Know your product. At some point, many companies gave up trying to have salespeople understand the product. This is perhaps, the single worst practice I see in today's sales climate. If your company doesn't think you need to know your product, for the sake of your prospects and commission checks, please take it upon yourself to learn. It's costing you and your company money if you must rely on other people to cover the technical and business benefits of your product.
Being serious about your sales career means taking responsibility for your education. If your company can't or won't help you understand buyers, value and your product, learn them on your own.
People often ask me how they can generate demand for their product or service. Truthfully, there is no cookie-cutter approach that works for every type of business other than to be completely customer- focused. We don't really "sell" anymore as much as we facilitate "buying." By facilitating buying, I mean that as an entrepreneur your main job is to create a product that adds value to a crowded marketplace. Customer engagement arrives in a variety of ways. Building something people really want or need is the best way. Building a better (often much better) mousetrap is another way.
Most people (and businesses) appreciate tools that make their lives easier. Responding to needs in the market is a shortcut to revenue. Building something for a niche market, or building it because you think it's a good idea is a bigger risk. If you are raising venture money, you can be certain that investors will be asking about your total addressable market and for strong evidence of your differentiation.
Be an observer of what works and what you find engaging in the marketplace. For example, implementing a CRM solution just a few short years ago was something of a nightmare. It was expensive, required a number of IT personnel and the business stakeholders had to be able to define what they wanted. Have you ever sat down and tried to define your wish list for a product? It's not easy and often you don't truly know what you want until you see what you don't want. In fact, all of these issues have carried throughout the software industry as long as we've been building software.
Along come the clever folks at salesforce.com and they decide it would be a lot better if all of this important technology could be stored in the cloud and that their clients could focus on making money. Salesforce.com can be implemented quickly and still tailored to the unique needs of most businesses. They now own the market for customer relationship management. They've also engineered it to suit all the users of the platform -- managers get the reports they want, and it's easy for salespeople to use.
As you design your next offering, remember the best way to generate demand is by ensuring your products or services improve tasks your clients undertake every day.
I'm fortunate to be surrounded by exceptionally talented and brave people that don't just think up great ideas, but execute on them. Each of my entrepreneurial friends has a special set of talents that makes them effective experts in their chosen field. I am always happy when asked for advice on things outside their area of expertise.
The most common conversation I have with my entrepreneurial friends involves how to market their products and services. If you Google "small business marketing" or "startup marketing" there will be so many conflicting opinions on how to approach small or growth-business marketing. I am often contacted by my friends to validate what the last vendor they talked to told them.
As an entrepreneur, I'm sure it's not lost on you that there are vendors of everything you can imagine from buying links on "link farms" - (don't do it), yellow pages, guaranteed lead programs and on and on. Knowing when you need a service or technology and how to leverage it is my area of expertise.
The easiest way to sort out what to do to effectively reach your audience is to do a bit of discovery on yourself, your audience and your competitors.
- Who is your audience?
In order to figure this out, examine your best customers. Where did you find them - or did they find you? What does their online footprint look like, or are they online at all? Are they traditional media consumers or do they live in the social cloud? Are there additional audiences or markets you can reach that look like your ideal customers? I like to do this exercise on a white board or giant piece of paper.
If you don't have customers (an audience) yet, stay tuned for an upcoming post on getting your first clients.
- What are your competitors doing?
I am amazed that many entrepreneurs are unaware of their competition. It's never a good idea to take a knife to a gun-fight so spending time getting to know your competitors is always a worthwhile exercise and can help you position your company more effectively.
If you are being outspent from a marketing perspective and you can't compete with deep pockets, find the place you can compete. For example, position yourself as an expert and share expertise to build your following. If your competitor is hard to work with or their pricing model is inflexible, be the vendor that is easy to work with and flexible. If your competitor has a wildly popular offering, find out what segments of the market they are not serving and see if you have a fit for that audience.
Once you understand what your competition is doing and who your best customers are, it's much easier to strip away unnecessary marketing activities and focus your attention in the area where it will make the most impact on driving revenue. Yes, revenue.
- On Message
I'm often asked about building a brand and how much emphasis is needed on that. It is critical to develop understandable messaging and be consistent with it. People are only confused if "who you are" changes constantly. You have to give your messaging enough time to gel, and sometimes your best clients will end up repositioning you anyway.
For example, someone I respect greatly started a very nice fashion blog and styling service and her customers insisted that she extend her services into room styling. If she had stubbornly held on to her original brand idea, she would not be able to exercise her considerable sense of style outside clothing, shoes and accessories. http://feliciabiggins.wordpress.com/author/feliciabiggins/ This is how you grow a business, she's not off-message at all, just extending her talent into related areas. (Smart lady.)
So, my advice is position yourself and message very clearly, but don't be so married to your brand that you're inflexible. With respect to your brand, it's actually your "brand promise" that's the most important aspect of your messaging.
For a great example of messaging a brand promise, check out www.koreyhowell.com. Korey is an amazing business headshot photographer in a sea of photographers, but she has so finely crafted and executed her brand promise of a great business headshot, that she has a steady stream of business. What are people most concerned about when getting a photo taken? Of course, it's that the photo won't turn out well and it will be a stressful experience. Korey is so good at what she does, she can guarantee you'll get a shot you love. Brand promise. I can only imagine how much of her business comes from referrals. I've probably told at least 50 people how great she is. Combine referrals with a well-placed Groupon, social media, support for charities that she loves and a light outreach to the local corporate community, and her marketing is done.
I'm the type of marketing person that actually tries to talk people out of spending money. I am constantly talking startups out of spending money on yellow pages ads, paid search and other techniques that can quickly drain their reserves. The next few posts will be around leveraging the low cost channels at your disposal and how to achieve the big company results you want on a shoestring budget. Generally, my only exception to startup frugality is when you have VC money, a game-changing product, a small window of opportunity and the need to build massive market share quickly. That situation requires a different strategy. Do your homework and spend smart.
Regardless of what you sell, you need to reach the right audience. As a startup, you probably need to do that as inexpensively as possible. You build a website, start a blog, sign up for Twitter and create a Facebook page... but it's a slow process to build critical mass and you'd be right to feel a strong sense of urgency about generating revenue. This is generally the time when you start buying lists and the sales force is told to cold call.
I believe B2B cold calling can work. I've seen it work. I've witnessed cold calls that launched a sales cycle that eventually turned into multi-million dollar contracts. I've also been on the receiving end of hundreds of "crash and burn" sales calls. On average, I get three to four "crash and burn" sales calls per day, and those exclude the ones that were filtered before they got to me. Even when I may have a legitimate interest in saving money on office supplies, when the cold call is so bad, I quickly decide your company is not worth my time. Think of a cold call as a blind date. You need to make a good impression.
The problem with cold calling is the approach companies (or salespeople) take to it. I would rather have a salesperson make three good calls a day than a 100 blind, misinformed and mismatched attempts.
Anatomy of a bad cold call.
- Not knowing who you are asking for.
- Lying to get to the person you need.
- Mumbling, bad grammer, giggling and other bad telephone behaviors.
- Not understanding the business you are calling.
- Not valuing the time of your "target" by making sure you have something of value to offer.
- Underestimating the intelligence of your target, their inability to do a Google search or check reviews.
The good news is these cold-call snafus are preventable. Write yourself a script, but this time instead of asking who buys this and who is in charge of that, write your story around what you have done to help a company exactly like the one you're going to call, make it the best 30 second story in history. The story should include the problems to be overcome, how you resolved them, what you saved the company and so on. Practice it until you can deliver it naturally. Record it in an audio version and play it back. If you were in your target buyer's shoes, would this story be compelling to you? Would the voice you hear, earn your trust?
Don't rush through this; understanding the value proposition of what you are selling is essential. This effort naturally helps define who you should call. Don't attempt to reach a senior executive in a large company until you've tested this story in dozens of companies and fine-tuned your approach. You will not get past a gatekeeper until you have truly refined your message.
The next step is to research companies in dozens of free sources like Facebook, Twitter, LinkedIn, Google, Glassdoor and so many more. Once you know something about the company and the people, you are in a better position to understand how you might be able to help them.
Prepare! Once you have someone on the phone, tell your story and ask if you can schedule 15 minutes of their time to discuss your offering and how it's helped one of their competitors solve a difficult problem. It's hard to resist what sounds like free competitive intelligence, many executives will bite at this offer unless what you are pitching is so far off that they don't care. If they seem engaged, it's then OK to have one or two carefully crafted probing questions, solely for the purpose of determining need. I would not try to qualify at this point, you are still demonstrating your value, it's all about them. Pay rapt attention to how your contact answers those questions because you will incorporate their comments, issues and problems into your next conversation. You've shifted your approach from cold calling to warm calling.
Once you have the second call, you're on your way. Now is a good time to start researching the company's decision makers and influencers. The more expensive your product, the more of these people that you will have to get on board. Don't be lazy and ask your contact to provide all that info, it will run off even a serious buyer if you turn the conversation into qualifying them before they are emotionally on-board with doing business with your company. Each and every contact should build trust and add value.
By now, you're probably hoping for an example of an effective cold/warm call. Here's one that worked on me:
The person had done their homework and knew I was the VP of Marketing for a software company that they wanted to sell an IT product to. The IT staff was besieged by these calls and wouldn't take any vendor calls. The vendor carefully practiced their story and called me and simply said this... "I am hoping you can help me. I sell a great product that I think could save your company a lot of software development time but your IT people won't talk to me. Can I have 30 seconds of your time to critique my pitch?" Critique your pitch? Marketing folks LOVE to critique pitches. I was all over that. It was a mediocre pitch, but the person was so sincere and compelling that not only did I critique the pitch, but had them try again with a revised version and then I put the vendor on hold, walked over to IT and suggested they take the call. They did, we (eventually) bought and everyone was happy.
Cold calling can work... but warm calling will work better and faster.
- It's clear who it is from. Something in the "from" line conveys relevant meaning to your list. Avoid generic senders like "me, customer service, postmaster" - these can be captured by spam filters.
- The subject line is relevant to the value added, for example "10 Tips for Reducing your Tax Burden" sent to a list of business people. I recommend running possible subject lines through Spam Assassin and split testing a couple of different ones to your list.
- The offer to buy products or services comes after the value but there is a clear call to action, for example "Sign up for our next class on tax savings for small business."
- Use a reputable email service provider. You must build trust with your list so they need to have an easy way to opt-out of your list, forward the email to someone else or change their subscription. The opt-out process should be immediate. The more steps someone has to go through to leave your list, the angrier they will be. And, you need to be compliant with the CanSpam law, even if everyone else isn't.
- If someone replies to your email with a complaint, resolve it promptly. Make sure your subscribers know that real people are behind the email and they are valued as a member of the list.
- And… test… test your email in various email clients and browsers. It may look great in Firefox 3 and IE7 but it could be a disaster in another browser or email client. I like MailChimp's Inbox Inspector. Submit your email to the inspector and in an hour or so, you'll have a great report on how it looks in a wide selection of email clients. It's a small investment to make to deliver a better email.
- Provide a feedback link in the email. You never know when someone will give you an excellent content idea.
- And the most important tip, segment your list by product or service and only send people content that is relevant to their needs.
"Sometimes the best way to improve an old technology is to completely change the way it works. In 1993, Dyson engineers created the first vacuum cleaner to use cyclone technology instead of bags – because bagged vacuums don’t work properly.
Now we’ve turned our attention to another familiar device - and made it work better by removing something you might have thought was essential. This is a new machine for Dyson. It won't be launched for a few more days, but you can get an idea what it might be on our website."
And, it's no longer summer in the Northern Hemisphere, so an October launch for a fan makes little sense if your biggest market is the US.
One of the greatest entrepreneurial challenges is how to market your business without going broke. Perhaps it's my background in marketing but I think it's the #1 thing on any entrepreneur's "to do" list.
The reason is simple. It doesn't matter how great your product or service is if your prospects are buying from your competitor because they don't know you exist. So make a promise to yourself that you'll spend at least 30 minutes per day to market your business.
Before you start: Do some competitive analysis online (and in your area if you have a storefront) - make sure your product or service is competitive and priced right. Understand who your target market is and research to see how and where you can find those people. This is work that marketing professionals spend a lot of time on. There is no sense investing your precious time and money targeting the wrong group of buyers for your product. Document this and keep it near your computer so you're constantly reminded who you are looking for.
Step 1: Collect an email address from every prospect and customer. In order to have them agree to give you their address, offer something useful in exchange like knowledge, hints & tips, coupons or discounts on services.
Step 2: About once a month, send something useful to your list. Based on the type of business you have, you'll have to determine the frequency that is right. Consistency is important. If your space involves frequent small purchases, I'd aim for once or twice a month, generally not more. Make your audience the focus of your message. Concentrate on providing outstanding and useful content. I often use a service called Mail Chimp to send messages to my list. [Note that I don't receive compensation from them, or anyone else in this article, I just love the service.] If your list is smaller than 500 and you send fewer than 3000 messages per month, the service is free. Yes, free. Who doesn't love that? For bigger lists, pricing is quite nominal and I find the service very reliable and robust. No programming is required to use it, if you're not the creative type, you can quickly customize one of their templates to meet your needs. They also have online video tutorials to walk you through it. If you do like design, they give you a lot of flexibility to build what you want. Best of all, Mail Chimp takes care of the reporting and tells you which emails couldn't be delivered, which were opened and what links were clicked. These stats are invaluable in measuring your promise. Try to come up with a great subject line so people will want to open your mail. They get an A+ from me.
Step 3: Sign up for LinkedIn, Twitter, and possibly Facebook. Again, this depends on who you sell to and what you sell. If you are involved in business to business, LinkedIn is a must and you may find Twitter helpful. If you have a storefront or consumer business, you may have luck with Facebook. Do a Google search to see if you can find other social networks relevant to your business. Participate in the discussions and groups. Again, don't promote yourself but provide value to the other members and they will naturally look you up. One word of caution here, don't over-network. You could easily spend all day on it and not complete other projects.
Step 4: If you serve local customers through a storefront, make sure your business is listed in the local listing services at Google, Bing, Yahoo, and others as necessary. Most of these allow your customers to leave reviews. Encourage that by providing a coupon or discount for their next purchase. Good ratings help keep you on track and give prospects the confidence to buy from you. Sign up at the links below: Google - http://www.google.com/local/add/lookup?welcome=false&hl=en-US&gl=US Yahoo - http://listings.local.yahoo.com/ Bing (MSN) - https://ssl.bing.com/listings/ListingCenter.aspx
Step 5: If you need some basic design services for business cards, letterhead, etc., try your local printshop. I'm a big fan of building relationships and buying local. You should be able to find a local printer who can help with design services. If not, check out us.moo.com for low-cost options and fast delivery. On the issue of websites, it's great to have one but you have to spend some time optimizing it for search or it will have limited traffic. The tools to build websites are plentiful and even someone with limited or no programming experience can build a site. When you are new in business, many people will contact you offering to build your website. Keep in mind that without traffic, a website is essentially useless. Make sure anyone you hire to do this can put in some basic code called tags and your content is high quality and informative. A website is a longer term investment and too many web designers sell them as the be-all and end-all. This leaves small business owners disappointed and frustrated. Before you hire a web designer, spend some time researching search engine optimization so you can have a better conversation with any potential site designers. These are my favorite SEO/SEM sites: www,sempo.com (an organization for SEO/SEM) www.highrankings.com (SEO/SEM consultant, great content on the site) www.bruceclay.com (another SEO/SEM consultant) www.searchenginewatch.com (lots of great educational content) www.seotoolset.com (great site for do-it-yourselfers) http://www.wordtracker.com/ (helps you choose keywords for SEO/SEM)
My final caution is to beware of people selling search engine marketing and/or optimization services. There are some great technicians out there who get results but there are many who just take your money and may get you blacklisted through unscrupulous techniques. I saw at least one paid ad this week that was just ridiculous and attached to the entirely wrong keyword. The company paying that vendor is being taken for a ride. Unfortunately, this is all too common. Clicks can be expensive. No one can guarantee you'll be on page one of search results, regardless of what they tell you. This is a huge subject and I'll be writing more about it later. If you're hiring someone today, check references and the BBB and sign contracts that pay for results. Don't agree to just give a vendor money every month with no guarantee. Finally, be consistent and give your marketing effort time. Marketing isn't a faucet you turn on and the results rush out. We wish! It takes time, persistence and creativity. If you have a good product or service at the right price, and you target the right buyers, you will be able to build your business.
Once I was invited to an 8 hour meeting to discuss a custom feature a client had asked for. The client was correct that the functionality was useful but engineering was designing a million dollar solution to a five dollar problem. As you can imagine, the client didn't want to fund a big pile of spaghetti code to get this tiny, but necessary, feature and resented having to call us when they wanted something new or different. Fast forward to today and many software companies behave like the world still works that way.
A subtle shift is occurring and there is some nice maturity creeping into our industry in the form of tools anyone can use and easily customize. It's early in the process, but today's technology shows great promise for tomorrow's large-scale enterprise market.
Every company needs tools to build and maintain their website, social networking presence, run accounting, track inventory and so on. These are common business problems and there are countless solutions to solve them; and yet business still struggles with finding affordable, high quality tools that won't drive their budget into the ground and their employees crazy.
Here's how much things have changed: just a few years ago, email marketing solutions were as much as $40,000 per year and a bear to use. Today's email solution is a service you can buy online with a credit card for $20 per month. Anyone can use it and build an attractive outbound marketing campaign in just a few minutes. The provider gives you all of these wonderful stats you can use to measure your success. And these tools are accessible to anyone who has a browser. [Of course, they also mean your inbox is full, but you get the idea.] Software is democratizing.
So, here's my advice to business software developers:
- Spend some time researching your market and prospective clients. Ensure your solution will meet their needs and is a better mousetrap than the one they already have. If you're short on ideas, find a friend who works in an office and ask if you can see what they use to do their job (get permission from management). You will be amazed how clunky and unproductive some business applications are.
- Deliver your solution and price it in a method that makes sense to your prospects. If potential clients are not technically savvy, use a SaaS model and hide complexity away where it won't affect users.
- Complexity does not equal sophistication. Have a relentless focus on building elegant solutions.
- Take security seriously. Don't be the guys known for a security hole that allowed a hacker to steal all the accounts.
- Figure out the support and pricing models early in development the process. If you take a lot of customer support calls, it kills your margin.
- Architect from the ground up for easy configuration. Your goal should be that systems administrators can be trained and stand on their own quickly and any end-user can make your product work with a minimum of training.
- Resist the temptation to build professional services into your model. Fewer and fewer clients are willing to endure a long and/or expensive deployment.
- Invest in an outstanding user interface designer and make the goal that routine actions are no more than a couple of clicks away. There are so many products that would be great if only they had a user interface czar early in development.
- Do a lot of research before you make technology decisions - it's not fun to rearchitect once you realize your underlying technology doesn't meet your needs.
- Never treat your customers as if they are stupid because they can't use your product. The problem is with your product, not them. Appreciate the opportunity to do better.
- Have a real subject matter expert - not your cousin or best friend, but someone who has been in your space, knows the issues, knows the market and knows what clients want.
- Be passionate about your product. You will spend a lot of time looking at it and talking to people about it.
- Have a fun side project to take your mind off solving complex coding issues. Google is smart to give their employees free time to work on personal projects. Sometimes you just need to switch gears and clear your head.
The democratization of the software industry is opening up an entire new world of opportunity. Savvy developers will profit and more businesses will be able to emerge with better tools, lower overhead, and a stronger competitive advantage.