One of the more common strategies associated with sales reps is assigned geographic territories. Territories make sense when field sales are involved but with the growth of Software-as-a-Service (SaaS), more and more sales are done over the phone and internet. A major downfall of territories is that in a fast-growing startup every additional sales rep that’s hired shrinks someone’s territory, and shrinking territories is tough on morale. With a modern marketing automation system or CRM system there’s a better way.
Here’s one way to have sales reps without territories for SaaS-type sales teams:
- Score and grade all inbound leads automatically and route them to a market response rep
- Route sales qualified leads to a queue that distributes leads in a round robin fashion to the account executives
- If there’s a particular source of lead that is sales qualified but even more valuable, like from a test drive, route those to a second queue of the same account executives (the idea is to have equitable distribution of the regular qualified leads and the best leads)
With one or more round robin lead queues, reps are assigned leads in a straightforward manner that is minimally dilutive when an additional sales person is added.
What else? What are some other ideas around sales reps without territories for SaaS?
Entrepreneurs writing marketing copy have a tendency to focus too much on features and not enough on benefits. There’s another aspect of startup marketing that needs more attention: what’s in it for me (WIIFM). WIIFM, pronounced “whif em”, is key for any persuasive message.
Let’s look at some startup marketing WIIFM examples:
- Website personas whereby website visitors select which type of user they are to receive more specific content
- Marketing copy that talks not only about the company benefits (ROI, efficiency, etc) but also individual benefits (increased personal recognition, skill set/resume enhancing, etc)
- Referral initiatives whereby if you refer a friend you get more storage space or an Amazon.com gift card
The next time you read marketing content ask yourself what’s in it for the company and what’s in it for me. WIIFM is more important than you think.
What else? What are your thoughts on startup marketing needing to answer WIIFM?
In the art of persuasion there’s a methodology called the arc of decision making that outlines five steps someone must go through to act. These steps are readily aligned with sales and marketing so as to understand where people and technology fit into the process. Here’s the arc of decision making with sales and marketing alignment:
- Unaware – Outbound sales and marketing required (inbound marketing fails here because if they don’t know about it they won’t search for it)
- Aware – SEO and inbound marketing work well
- Understand – Educational content marketing like white papers and webinars
- Believe – Content marketing plus consultative sales
- Act – Sales rep asks for the deal when the prospect is ready to buy
The next time you contemplate a sales or marketing improvement, ask yourself where it fits on the arc of decision making to tailor your message and approach.
What else? What are your thoughts on the arc of decision making for sales and marketing alignment?
Recently I was talking to a friend of mine who’s an attorney. We were talking about how most law firms operate with an intense focus on the billable hour including a number of tactics around CYA and risk mitigation that result in more dollars billed to clients. As an example, each year we get an external financial audit and as part of it they’re required to ask our law firm if we have any outstanding litigation, and that results in a $500 lawyer bill because each of the corporate-related departments has to chime in and say they don’t know of any thing. That $500 is a waste but I understand why it happens. I was excited to read that in England they passed a law allowing non-lawyers to be equity partners in firms that offer legal services. That’s right, in the United States you can’t own part of a firm that offers legal services unless you’re a lawyer — how crazy is that?
Law firms live and die by the billable hour due to a number of reasons one of which is the scalability of their efforts. Think about it: for each client they use boiler-plate documents but then spend extensive time customizing them to the situation, and there are always a thousand permutations. There are some economies of scale for senior lawyers with the associate pyramid scheme whereby junior people work hard for several years in hopes of becoming a partner, and the big pay increase that comes with it. Now, contrast that to the scalability of a skilled programmer’s efforts.
A skilled teenager can write software in his dorm room to help with the dating scene on campus and become a billionaire many times over less than a decade later (Facebook). The power of software is astounding. In fact, software is eating the world according to Marc Andreessen. With the proliferation of open source providing re-usable components at no cost, cloud computing for infinite scalability, and smart phones in millions of pockets the scalability of a programmer’s effort increased by a magnitude, if not more.
Of course, without users or customers the value of a programmer’s efforts can be minimal but for startups that make it, economies of scale of software engineering is astronomical. Pinterest had over 10 million visitors last month, been in business a couple years, and yet only has 16 employees. The scalability of a talented programmer’s effort is incredible.
What else? What are some other thoughts on the scalability of a programmer’s effort?
Contrary to popular belief cold calling and sales prospecting still works. Certain markets and brands suffer from a lack of market awareness, meaning people aren’t proactively seeking out what they’re selling even though they potentially need it. Things like SEO, PPC, and other mechanisms work well when there’s a market actively looking for the product or service, but inbound marketing fails when there isn’t existing market demand. Prospecting via cold calls and acting like a missionary out in the field educating people one-on-one works great.
Here are some tools for sales prospecting:
- Refractive Dialer takes a list from Salesforce.com and queues it up in a conference call-like manner so that sales reps can make significantly more phone calls in the same period of time.
- Rapportive, recently acquired by LinkedIn, is a Gmail plug-in that takes the email address and shows additional information about the person. This is especially useful if you don’t know the person’s email address as you can make guesses and Rapportive will confirm when you’ve found the correct one.
- Data.com, owned by Salesforce.com and formerly called Jigsaw, has crowd-sourced information about millions of companies and contacts making it easy to find and search information by categories like company size, geographic location, and job title.
- LinkedIn almost always has the most current information on a professional and is a great resource to find prospects to call on as well as to confirm information found in Data.com.
Ideally, the prospect is just about to start the buying cycle upon first contact, so that the sales cycle is short and there’s maximum value for sales and marketing effort. In reality, prospects are at all different stages resulting in the need for marketing to help educate and nurture the lead so that a sales rep can take over once the prospect has entered the buying phase of the relationship. Sales prospecting works for B2B startups and I recommend it.
What else? What are some other sales prospecting tools for startups?
Startups are great because they have a clean slate for all aspects of the business. While daunting, it’s also empowering in that there aren’t notions of “that’s the way we’ve always done it.” One theme I’m a fan of is the idea that startups should approach everything as marketing. Everything? Yes, everything.
Here are some examples of everything as marketing:
- Awesome customer service so that clients love the startup and tell their friends
- Amazing product interface and user experience that sets the tone for the brand
- Quality sales people that are infectious with their passion
- Enthusiastic team members in all aspects of the business
Marketing is defined as: the action or business of promoting and selling products or services (Webster’s dictionary). For startups, the product is the entire startup, not just the product that’s sold. The operative word in the definition is “promoting” since all interactions, whether digital or personal, are promoting or detracting from the startup. Startups should approach everything as marketing.
What else? What are some other examples of everything as marketing?
At yesterday’s Startup Riot I enjoyed talking with a number of entrepreneurs. One item that kept coming up was partnership opportunities that entrepreneurs were excited about. Here are some example partnership opportunities:
- Invite to be on someone else’s app store-like marketplace
- Desire to white label or OEM the product by a bigger company
- Exclusive reseller for a certain vertical or geography
Startups should say no to 99% of partnership opportunities. Most partnerships never go anywhere and don’t make sense for the startup to invest significant effort into the relationship due to being time and money constrained. Partnership opportunities do make sense when there is significant skin in the game on behalf of the partner (e.g. large up-front fees) or a super minimal way to work together (e.g. less than 20 hours of work to get something out the door that is useful).
Now, it isn’t that bigger companies are trying to take advantage of startups. Rather, bigger companies have more resources and less focus whereas startups are often looking for product/market fit and need to stay focused on work that’s applicable to 80% of their desired customers. The next time someone approaches you with a partnership idea, ask yourself the hard questions and assess the downside as well as the upside.
What else? What are other reasons startups should say no to 99% of partnership opportunities?
Wow, Startup Riot 2012 was easily the best one yet. Almost all the startups were true seed-stage ventures with working prototypes and everything ran smoothly. This year had 30 presenting companies instead of 50 with three minute pitches followed by three minutes of questions from the four-judge panel.
On a personal note, I was able to give out over 400 copies of my new book Startup Upstart. Please leave a review of it on Amazon.com, if you liked it :-).
Here are notes from the Startup Riot 2012 Atlanta presenting companies:
- SaaS for HR
- $6b industry
- Only 1 in 3 fully engaged employees
- Trend of empowered employee
- Focus on employees as value centers
- Replacing SuccessFactors in a beta customer
- Target 20-1000 employee companies
- Mobile marketing and digital loyalty for retail locations
- Simple app, detailed reporting
- 100 different locations deployed
- Raising $500k
- From Scotland
- Capture data by forms, email, or API
- Data is centralized and secure
- A simple CRM
- Built-in nudges/reminders
- Between Wufoo and Salesforce.com
- Change academic research publishing
- Difficult to search research
- Tools to improve search of related papers and authors
- Launching today
- Scheduling is a big time suck
- Scheduling tools aren’t for ad hoc meetups
- Targeting adults 18-44 with smart phones
- Opportunity for reservations, deals, tickets, etc
- Give the gift of time
- Get lean and sexy without guess work
- App tells you what to do
- Personal fitness training system
- Android app but iPhone app eventually
- Place to encourage and motivate others to do their best
- Gamification of life initiatives
- Earn points and get rewards
- 1.8 million page views
- 100,000 accomplishments
- Users in over 100 countries
- Property management app
- SaaS app for landlords
- Property manager, vendor, tenant, property owner
- Manage work orders, vendors, bill pay
- Market opp: 40M rental properties and 100M tenants
- 7 employees
- Gaming studio
- Location based offer network
- First game is Plan X
- Free to play and then sell virtual goods
- $14 per player on average
- Huge smartphone market
- $30b year spent selling
- Scans Internet for data sales reps need to know
- Prospect ranking and customized alerts
- On the Salesforce.com AppExchange
- JobChangeAlerts.com free tool
- Winner of MAKE competition
- Location based ticket sales app for venues
- Helps fight scalper problem
- SEO for social
- Make the most of social feeds
- People pay attention to the stream and not ads
- Fans need to carry the conversation
- Help marketer increase engagement
- Raising $800k to make self service
- 52,000 badges served
- 20% response rate
- Making plans, made easy
- Calendaring, texting, and mapping
- Mobile calendar invite
- iPhone app
- Track calls from ads
- Uses Twilio
- Tracked 50,000 phone calls
- Local businesses need call tracking for their online ads
- Most small businesses use the phone to talk to prospects
- Sell through marketing agencies
- Woman’s sports content
- 88% of news for men’s athletics
- First online community for woman’s sports
- Raising $500k and looking for corporate sponsors
- Categories of learning
- Profile pages of available tutoring
- Live video conferencing with an expert
- Collaborative whiteboard and chat
- 500 experts ready to go
We & Co
- Build relationships with service provider like barrios to
- The experience of being a regular
- On iPhone plus HTML5
- Uses Foursquare API
- Check in and then thank the person
- Insider perks for loyal customers
- Online user testing videos
- Create a test in seconds
- Share a link or hire testers through Task Rabbit
- Hear and see the tester through a web cam
- Selling your car sucks
- 25M used cars sold last year
- When to sell app based on mileage, gas prices, new model introductions
- KBB info is often stale and doesn’t forecast
- Music licensing
- Millions of people create music and want to license it
- Existing services are poor
- Modern music marketplace
- Launched 45 days ago
- Want to buy tickets near friends for Linsanity
- Interactive seating charts and social sharing
- Tag seats for an event and share over social media
- Profile pages for users
- Raising seed round
- Launch in 5 weeks
- Parking lot management software
- Usually hard to change parking prices
- Customers aren’t served well
- Real-time information for providers
- Integrated platform as a service
- Mouth in Spanish
- Mash up photos with voiceover
- Real estate agents can do voiceover on photos and turn into video
- White label and freemium model
- Raising angel round
- Video-based speed networking
- High interaction and high discovery
- Don’t invite people but rather tags
- Focused on corporate internal networking through video
- CEO worked at Accenture with 200,000 people and only met 100 after 10 years
- Digital loyalty marketing
- Punchcards are antiquated
- Smartphone loyalty program
- Incentives customers to be loyal and to share
- Charge fee per punch per location
- Give merchants a month to pay
- Raising seed round
- Hard to program remote for your TV
- Custom app that uses smart phone video so that customer can show support the issues
- Help support agents see what the customer sees
- Target is telecom
- Save companies millions in fuel costs alone
- Grab a bike whenever you need one using your phone
- Won MIT clean energy prize
- Redesigned bike share by doing individual bike locks with GPS for tracking
- Everything managed in the cloud
- $80,000 through grants already
- Raising angel round
- Goal is to be best events site online
- Ran into pack of zombies in Atlanta but didn’t know about it
- Site shows events as a list and on a map
- Working on event recommendation engine
- Raising $500k angel round
- Financial education for kids
- Earn, spend, donate, save
- Kids and parents have separate dashboards
- Partnered with BBVA
- Online piggy bank for kids
- Looking for friends and partners
- Dealing with deal overload
- Finding a deal is rewarding
- Transform neighborhoods into augmented reality treasure hunts
- Win prizes from merchants, get points
- Merchants control offers on the fly
Via Cycle came in 1st place, SalesLoft in 2nd, and Driverly in 3rd. All teams did a good job.
Startup Riot 2012 was great and I highly recommend attending future events.
What else? What are your thoughts on the startups that pitched?
Automated billing is hard — very hard. When starting out the tendency is to try and guess how things might work when it comes to billing and to start building a module for it. Don’t. The best thing to do is to get the product in the hands of customers and then iterate based on their feedback.
More often than not the product pricing and billing nuances will change several times as you work towards product/market fit. Time spent on a billing module, that needs to be modified with each pricing change, will actually make you more reluctant to change the pricing model because it’ll involve more billing module rework.
The best thing to do is to bill by hand or use a semi-automated tool like CheddarGetter until you have enough paying customers that you’re confident it’s worth the time to build a billing module or write logic to integrate with a billing system’s API. Avoid the temptation to write a billing module too early.
What else? What are your thoughts on automated billing for startups?
Aarjav asked about Platform-as-a-Service (PaaS) options like Heroku in the comments of yesterday’s post Cloud vs Colocation vs Managed Hosting for Startups. PaaS is great in that it offers the benefits of cloud computing with easy scaling up and down while encapsulating many of the more tedious system administration functions present when doing it yourself.
Heroku, owned by Salesforce.com, is one of the best known PaaS providers, especially in the Ruby community (they support other technologies as well but Ruby is still the most prominent for them). As an example, if you write a new Ruby on Rails application, to run that application you have to set up an environment and maintain it. Manual setup might take an hour if you know what you’re doing or 5 – 10 hours if it’s your first time. With Heroku, you can get things running in 5 minutes in a super simple fashion and as you scale or need more horsepower the process of resizing an instance or adding more instances is much simpler than a traditional cloud or dedicated server model.
Heroku runs on top of Amazon Web Services (AWS), so it is even more expensive than AWS EC2 instances, which are much more expensive than managed hosting which is more expensive than colocation. Out of the box, Heroku is great and fits in with my recommendation for startups to start with the cloud. Heroku does do things like kill web requests that take longer than 30 seconds, which forces code changes like using more background jobs, which is the right way to go but might cause more code refactoring sooner than desired.
Startups using a language like Ruby and a framework like Rails are well suited to start with Heroku and graduate from there as their success permits. Startups using a language like PHP have PaaS options like PHPFog to use as well to cut down on administration time and focus on building a business. Long term, PaaS falls under specialized cloud solutions and so the same thoughts around constant availability vs burstable needs, etc still hold true.
What else? What are some other considerations for Platform-as-a-Service options for startups?