TVC Marketing Seminar
Today I attend session 2 of the 6-series CCET classes on developing your own business. If you have been reading along with my blog, then you know that this is the 3 class of the 6 total that I have taken. The other two classes were exceptional to me. Not only are all of these classes completely free, but they are very timely and informative. I have been very impressed by the quality of their speakers.
That is until today’s seminar. Perhaps it is because of the topic, which is Marketing, but some of the speakers and their talks were decidedly fuzzy and not as detailed and on target as previous speakers. Without doubt, the best speaker for me was Richard Walker. His talk can best be summarized by saying that startup companies have three phases of growth that should be directly reflected in their sales departments.
Phase 1 - Simultaneous Product and Customer Development (”Send in the Scouts”)
As you do product development, your sales staff should really be evangelists talking to potential customers and getting their feedback often and early. To move out of this stage, you must be able to clearly and simply answer these three questions:
1. What single problem does our product fix?
2. What single way does our product/solution solve it better than anyone else’s product?
3. What customer has this problem AND is willing to spend enough money to solve it so that you can make money selling your solution/product?
Phase 2 - Customer Creation (”Send in the Marines”)
Focus on getting customers in a very targeted way. Identify your key target customers and work to develop a long-term relationship with them, not just a single sale. These first customers are your beachhead and your entryway to other customers. At this stage, no one knows who you are. Focus on making yourself a big fish in a small pond. You need to get people to learn who you are and what you can do for them. A big part of this is creating “Air Cover” or buzz in the communities of your first target customers.
Your sales people at this stage don’t have predefined scripts to follow and have no previous sales to model future sales on. They have to think on their feet and be flexible to do the first deals to whatever will get the customer on board. Hopefully, this will include some profit for the startup, but it might not. Sales needs to focus locally on small territories.
When working directly on a sales lead, your salespeople need to answer these three questions for the customer:
1. What is the ROI (Return on Investment) with your solution/product and how does it compare to others? The customer has much to do. If the problem that you are solving is not one of the top three projects on his To-Do list, he probably does not have time or interest to work with you.
2. What other solutions/products can solve my problem? If your solution is not the best among the ones that the customer has to choose from, you are better off facing that fact early and changing your positioning to make your solution/product his best solution. To build a future relationship with this customer, it may even be worth your while now to point your customer to your competition if they have a better solution than you can offer and for you to focus on other potential customers.
3. What are other experts saying about your product/solution? The customer wants to make sure that they are making a good decision by choosing your product/solution. Before you approach the customer, get buy-in from at least one expert that you can refer to.
When working indirectly on sales leads through partnerships with other product/solution companies, consulting services, and distributors,
1. Start informally as salesperson to salesperson/influencer. Don’t make complicated agreements yet as you test the waters (i.e. avoid biz developers and lawyers).
2. You want them to help you. But you have to start by figuring out how you can help them, not how they can help you. You need them to see that working with you and your product/solution can provide clear, obvious, direct benefits to them. If things also go well for you, great. But that is not their concern.
3. Give them what you can to make them successful: semi-exclusive territory, attractive percentage of sales, etc.
Phase 3 - Build Your Organization (”Bring in the Army”)
Your product/solution changes from new to recognized. Customers change from evangelists to mainstream. You have jumped the Product Chasm (as seen in Crossing the Chasm by Geoffrey Moore).
Your sales team shifts from independent, take-charge Marines to a regimented Army that follows commands and defines procedures (i.e. predefined sales script and tools). Your company shifts from revolving around the development team to focusing on mission critical production and service centers.
To keep your company growing, you should shift your “startup” sales and development people back to creating new products. It is what they are good at.
Hire different people to form your Army, but make sure that your bottom-up sales forecast clearly shows that you can afford these new Army people. If not, stick with your Marines or reevaluate your market for your product/solution. Maybe the market is not what you thought it was.
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