Great People Do Great Things

I am a huge fan of Mark Suster. His blog is a treasure chest of ideas and lessons learned. If you aren’t subscribed to his blog and you are an entrepreneur, you are missing out.

Here is a great video which talks about pitching to VC’s and the approach you should take. With the market extremely hot these days and many people looking to raise capital, this is a very apt video.

Finding Great Clients

If you run an advertising/marketing/creative agency of any sort, I strongly recommend watching this talk. Michael Bierut is a partner at Pentagram. They have done some of the most iconic design work for the biggest companies in the world. Listening to talks like these, accelerates learning curves for individuals who are on the way up. The lists shared in this talk are the result of 30 years of experience. This is an cache of learning and experience very few people will ever be able to impart.

The biggest takeaway for me was: Spend the majority of your time focusing on your great clients, rather than going out there and closing deals with bad clients.

It sounds very logical, yet, if one were to analyze the time a young agency spends with bad clients, in comparison to their best clients, a majority of the time allocation does always tip in favor of the bad clients. It is critical that we reverse this.

Making the Sale

I had an interesting discussion with a friend today, about rockstar sales people. We were talking about their innate abilities to close deals and get prospects to take out their wallets. Sales is the back bone of any business and every entrepreneur needs to have this ability…the ability to sell. The best part about sales is that it has a built-in scorecard. You either make the sale, or you don’t. The reasons and circumstances may vary, but it comes down to what your strike rate is.

Sales should not be limited to selling that additional widget or service, to a new prospect. It is the ability to make your staff believe in the company’s vision, sell future growth prospects of the business to investors and be able to tell the press a compelling story as to why you are different!

The success of your business depends on your ability to sell, the scoreboard is always keeping track.

Book Review: Selling Change

I read a lot of books regarding the subject of sales. Sales and revenue are the life blood of any business. Hence every entrepreneur needs to equip him/her self with the necessary skill sets to sell, because in the final analysis their livelihood depends on their ability to convert prospects into paying customers. I had heard good things about Brett Clay’s new book on Selling Change and thoroughly enjoyed reading it. It does not read like a standard book, as the author discloses 101 secrets to effectively improve sales by leading change. The book is divided into five components that build a framework the author refers to as, “Change Leadership Framework”. The five components are:

1. Force Field Analysis
2. Change Response Analysis
3. Power Analysis
4. Value Creation
5. Change Actuation

This is not your run of the mill sales book that focuses on traditional sales processes and how to convert prospects in your pipeline faster. The book focuses on high value solution sales strategies. Solution selling is a very different ball game as compared to transactional selling. Most of the time, selling high value solutions requires a considerable amount of change to take place within the organization. The book takes you through a five stage process that enables you to make your case stronger and equips you with the skills needed to close such deals. It is full of valuable tips, tips which  had I read earlier in my career as an entrepreneur,  would have saved me a lot of pain. Some of my favorite tips are:

1. Not falling into the trap of owning your customer’s problems: I have done this many times in the past. The customer has a pain and as a company we take ownership, and strive to remove this pain for the client. Once we take ownership of the problem the client essentially wipes his hands of it, and any problems that arise from there on will be directly pointed at you. We need to ensure that the customer retains ownership of the problem, and strive to play a support role to help them through that problem.

2. Double your best estimates: Another common problem with early stage startups is, they usually end up selling themselves short. In most high value solution selling situations, research confirms that actual resource requirements are on an average 1.7 times the original estimate. Thus, you need to take these factors into account when deciding how much you are going to quote, and the resources it will require to complete the job.

3. Don’t Beg – Deliver: When sales have been dry we do our best, sometimes desperately so, to close any deal regardless of what it may entail, or what sort of resources required to complete it. This is when things go from bad to worse very quickly. The author mentions that instead of using “push” tactics and thinking how to accelerate order, we will get better results by using “pull” tactics and thinking how we can deliver more value. That is a very powerful thought, one which is being heavily publicized in the world of inbound marketing these days.

This is a great book to read for anyone who wants to get into high level consulting as well as selling complex solutions. For entrepreneurs or readers who are just starting their careers in sales, this book may jump the gun a little as there are still lots of fundamental grounds rules that need to be put into place to build a strong foundation of becoming a sales rockstar. Notwithstanding that, this is a great book to add to your shelf and refer to when you are ready and wanting to break into the big times!

Cultures & Business

With the world becoming seemingly smaller, it is not uncommon to find ourselves  in business with multiple partners from all around the world. Although we all strive to work according to established norms of conducting business, we need to be well aware of the language, culture and history of the people we do business with, in order to find real success. For example let’s say two individuals find themselves in a situation where one has a service the other requires. The service provider will provide the service and be paid for it accordingly. At this point the transaction is completed, and each one of them goes their separate ways, coming together only when the service is required again. A lot of business is done in this transactional fashion in the world we live in today.

In a situation where the service provider acquires a better understanding of the prospect’s culture and language, the possibilities of expanding the relationship moves from being a purely transactional one, to one with a much greater human element attached to it. One of the immediate examples that comes to mind concerning a business conducted on a massive scale, is McDonalds worldwide operation. Having visited many different countries I have seen how the company adapts itself to the local culture from it’s advertising strategies to it’s menu items. By localizing their offerings they appear less alien, less of an outsider, and assimilation into the culture takes place at a faster pace. Startups naturally do not have the resources to go into such deep level of customization of their offerings. However, what we do have is the ability to pinpoint where our products or services are in greater demand, and expand our understanding of those sectors, businesses and countries.

Even though our world is being heavily globalized, there are many key characteristics and traits that are ingrained into each and everyone of us. These stem from our value and belief systems, and upbringing. No matter how far we may appear to be removed from them, they are heavily ingrained into our thinking, and the way we process our decisions. In the end the business that wins is the one that understands it’s customers needs, wants and desires. This takes time, effort and resources, that are often skipped by many individuals and companies, with the excuse that the world is much too globalized. In the hyper competitive space we all operate in these days, it is taking advantage of these small edges that will provide us with the ability and  knowledge to keep our sale pipelines full, with much higher conversion rates.

80/20 Rule and Customers

The 80/20 rule is a powerful framework, one that helps us understand the dynamics between inputs and outputs. The rule asserts, that a minority of causes and inputs of effort, results for the majority of the output. When the rule is applied to a customer base, a skewed imbalance is often seen, where a small minority of customers contribute towards a majority of top line revenue. Many business owners overlook this fact and do not spend enough time and effort in ensuring to give exceptional service to their top 20% of customers. I was reading an article on techcrunch a few days ago regarding how Amazon is planning on giving free Kindles to its Prime customers. Prime customers are Amazon’s most frequent customers, they are the ones who apply for yearly memberships to get free shipping on the goods they buy.

This news clearly demonstrates how Amazon is focusing on ensuring that Prime customers get access to the very best products that they have to offer. By providing these customers a Kindle, not only will they be able to increase the amount these customers buy from Amazon, it was also boost loyalty, given that Kindles are not very cheap. The investment in this however should be recouped relatively quickly, and it would further help avoid defection to Apple’s upcoming iPad which poses a serious threat to Amazon’s Kindle.

This example goes to show how a company can successfully create a higher level of service for it’s best customers and focus more effort on them. For most smaller businesses, a similar analysis to customer base can be applied to determine which ones are actually contributing the most to the bottom line. These customers are essentially cash in the bank, and if any of them defects, short term losses will need to be faced,  the longer term impact will be far greater. If you have not taken stock of your top 20% customers, I strongly suggest you do so as soon as possible. Next, find ways to provide them with exceptional service and be in constant touch with them. They are the life blood of your business, and should be treated as such!