David Cummings on Startups

Category: Sales and Marketing

  • Entrepreneurs Should Hire a Sales Assistant Sooner than Expected

    Early on in the B2B startup adventure, the majority on an entrepreneur’s time is tasked with finding product / market fit through customer discovery and sales. While cold calling and emailing (see Predictable Revenue) isn’t a high priority on most people’s to do list, it works for getting in front of prospects and gathering information. Because it’s so valuable, entrepreneurs should hire a sales assistant sooner than expected as it helps the entrepreneur make better use of his or her time.

    Here are a few reasons why hiring a sales assistant makes sense for an entrepreneur:

    • Building lists of companies, names, emails, and phone numbers is time consuming and easily delegated (see the SalesLoft Prospector tools)
    • Coordinating meetings, web demos, and conference calls takes more time than people expect (see Calendly)
    • Staying top-of-mind with personalized, relevant email is a key way to continue dialogue with leads, and a sales assistant can handle most of the heavy lifting

    Yes, a sales assistant will cost $15 – $20/hour, but it’s well worth it if the startup can afford it. When budgets and future hires are being discussed, consider a sales assistant.

    What else? What are your thoughts on the idea that entrepreneurs should hire a sales assistant sooner than expected?

  • 3 Future Trends for Marketing Automation

    During the Q & A session of my talk today at Drupal Camp Atlanta, one of the audience members asked the question, “where do you see marketing automation going?” Thinking about it for a second, I answered that I saw several trends on the horizon for marketing automation.

    Here are three future trends for marketing automation:

    • Benchmarking – With vendors like Pardot signing up a critical mass of customers, there’s an opportunity to benchmark results anonymously across different categories and become the Nielson Ratings of B2B marketers (e.g. for companies of this industry, size, and price point, here’s the average sales cycle, conversion rates, ROI, etc).
    • Big Data / Machine Learning – Most lead scoring is done with a very static model of assigning values to certain web pages, forms, activities, etc. such that it doesn’t take into account actual data from previous prospects that turned into customers. Using big data tools and machine learning, marketing automation systems will be able to automatically build scores around a prospect’s propensity to buy that will be much more accurate.
    • 3rd Generation Platforms – With Eloqua being a first generation platform and Pardot being a second generation platform, in the next few years a strong 3rd generation platform will emerge that’s simpler and cheaper, just like Mailchimp did to the email marketing space.

    So, there you have it: three future trends for marketing automation. Marketing automation as an industry is still only getting started with less than a 10% adoption in the market. These three future trends are the natural evolution of the market and we’ll see them within three years, if not sooner.

    What else? What your thoughts and these three ideas and what are some other future trends you see for marketing automation?

  • Sales Team Required

    I love reading about Software-as-a-Service (SaaS) and sales ideas, so when I saw Peter Levine’s latest post titled SaaS Manifesto: Part Two – It’s Time to Build a Real Sales Team, I jumped right in. After going through the article, one stat really stood out to me:

    LinkedIn has a 1,200 person sales team.

    Yes, you read that correctly. LinkedIn has well over 1,000 people as part of their sales force — that’s enormous! As an entrepreneur, the standard tendency is to get so focused on the product that the concept of having to invest significant resources into selling doesn’t enter the mind. In reality, even with an amazing business like LinkedIn, and all the valuable services they have, they still have a massive sales team. Occasionally, some startups succeed without a sales team, but 99% of the successful ones have a sales team.

    Great technology still requires a sales team.

    What else? What are your thoughts on the need for a sales team?

  • Does CRM go away as a standalone offering?

    Several months ago I wrote a piece titled HubSpot as the Next Mainstream CRM where I explored the lack of a clear #2 CRM provider in the market and offered that HubSpot might fill that role. Last month HubSpot, at their annual user conference, pushed the message “inbound sales” as the next phase of evolution with their solution.

    With yesterday’s post titled User Engagement Tools vs Marketing Automation, Scott Voigt of Homebase.io offered up that these user engagement tools are quickly becoming a viable alternative to a combination CRM and marketing automation system for companies that don’t have an outbound sales team (e.g. no hunters and sales order taking is done in a self-service fashion). Mike Lewis offered up that his company uses Totango as their user engagement tool and that it’s great for managing user retention at scale.

    So, looking back at the HubSpot-as-mainstream-CRM idea, the premise was wrong. The market doesn’t need a mainstream CRM as separate from the marketing automation system. Sales and marketing are inextricably tied together, and marketing campaign execution and tracking technologies are so good now, they’re leading the way. The marketing system is more important than the CRM system because it delivers more value in the organization. Marketing is driving sales, and marketing automation systems are a better driver at telling sales people where to spend their time, compared to the static information logged into a CRM.

    If an entrepreneur came up to me asking which CRM to use, I’d start talking about marketing systems. A CRM is useful for logging calls and managing opportunity pipeline, but that’s less important than implementing a marketing system. With a marketing system, prospects are tracked, messages triggered, and rules automated.

    So, yes, CRM systems do go away as a standalone offering and become part of a joint sales and marketing solution.

    What else? What are your thoughts on CRM as a standalone offering?

  • User Engagement Tools vs Marketing Automation

    There are a number of new Software-as-a-Service (SaaS) tools on the market that specialize in converting free/trial users into paying users as well as engaging customers on a one-to-one basis. Tools like Customer.io, Intercom, and Evergage are all different in their functionality but are working to solve the same problem. The market lacks a consistent name and uses terms like customer engagement, one-to-one customer communication, prospect conversion, etc.

    Recently, two different entrepreneurs asked me about these user engagement tools, and after digging in, they look like specialized marketing automation systems.

    Here’s partial functionality listed by some of the user engagement tools:

    • Track user-level activities and set triggers
    • Manage and deploy lifecycle emails
    • Automate one-to-one emails based on behaviors
    • Segment and tag users

    So, without having first-hand experience using the user engagement tools, they appear to be specialized marketing automation systems geared towards companies with a web-based applications with a user conversion and engagement process. The interface and functionality is less sophisticated than marketing automation systems, but it’s also easier to learn and more tailored for a specific audience.

    Marketing automation systems already fill the general need in the market for these user engagement tools, but if they are better/faster/cheaper for converting and engaging users in a web-based product, there’s an opportunity out there.

    What else? What are your thoughts on user engagement tools vs marketing automation?

  • Top Blog Search Terms or An Example of Long-Tail SEO

    Search engine optimization (SEO) has been a mainstay of web marketing for over a decade and the basics are well understood. Now, SEO is very much an arms race where things are constantly changing, so there are always new techniques. One aspect that has held steady is long-tail SEO where people search for specific phrases, often with little search volume, that result in targeted site traffic.

    For this blog, here are the top search terms over the last 30 days, listed in order of traffic:

    • benefitfocus ipo
    • ringcentral ipo
    • benefitfocus
    • one page strategic plan
    • jimmy johns how much is enough
    • kpi spreadsheet
    • publicly traded saas companies
    • benefitfocus s-1
    • 9 building blocks
    • how much is enough jimmy johns
    • office layout ideas
    • startup ideas
    • office floor plans
    • open office ideas
    • simple marketing budget template
    • marketing budget layout
    • v2mom
    • difference between employee and employer
    • ringcentral s-1
    • how much is enough story
    • client services expense saas startup
    • recent saas ipos
    • saas cogs
    • cold calling ideas
    • what are the seven characteristics of successful entrepreneurs

    I removed the five search terms that included my personal name.

    A few takeaways of note:

    • Current events, in this case recent IPO filings, drive a good bit of traffic initially and then taper off
    • Random topics, like “saas cogs” for Software-as-a-Service cost of goods sold, have been popular on the blog for years, showing some staying power for more specialized content
    • Frequent posting of content that you believe is of interest and value to your readers, not Google, is the one of the best strategies for growing site traffic volume (absent frequent posting, the most difficult and valuable approach is writing extremely high quality content on a less frequent basis that is well regarded and heavily shared on social media)

    Long-tail SEO works and drives traffic. It isn’t a short-term endeavor but is an important part of a long-term marketing strategy.

    What else? What are your thoughts on long-tail SEO to drive traffic?

  • Atlanta’s Sales Community as Core for a Sales and Marketing Tech Hub

    Atlanta has one of the highest number of sales reps per capita in the world. Think about it: if you live in Atlanta or have friends in Atlanta, how many people do you know that are in sales? That’s right, there are a ton. Now, there are two main reasons why Atlanta has so many sales people:

    1. Capital of the South – Thousands of companies have regional sales offices in Atlanta to call on and service accounts all over the Southeast. Atlanta is the clear leader in the Southeast based on number of people and scale of infrastructure.
    2. World’s Busiest Airport – I know a sales-oriented CEO of a multi-national health IT company that just moved his family to Atlanta because he’s on the road all the time and would rather be based out of Atlanta instead of Boston, even though he grew up in the Midwest. The main reasons: climate and the airport. With the world’s busiest airport, it’s easy for sales reps to quickly visit customers anywhere in the world at a reasonable cost, and almost always with a direct flight.

    So, Atlanta has an unusually large number of sales people, which translates well into Atlanta being a hub for sales technologies, and the close relative of sales, a.k.a. marketing.

    The world’s largest software company in the late 70s was a firm called MSA, based in Atlanta. MSA had an amazing culture that was incredibly sales focused. From the sales reps and sales management at MSA, over 50 startups emerged in Atlanta. Several of Atlanta’s largest success stories, including the billion dollar exit of Internet Security Systems to IBM, were lead by MSA alumni.

    A strong cluster of sales and marketing technology startups and companies have already coalesced in Atlanta including SalesLoft, Rivalry, Insightpool, CallRail, Badgy, Pardot, Vitrue, BrightWhistle, and more not even counting the amazing pool of email marketing companies in town like WhatCounts, Silverpop, and MailChimp.

    Atlanta’s strong sales community is the core that’s helped spawn many tech companies. Over the next 10 years, I predict Atlanta will become even more well known as a sales and marketing technology capital, and I can’t wait to see it happen.

    What else? What are your thoughts on Atlanta’s sales community as core for a sales and marketing tech hub?

  • Business Idea: Google Now for Sales Reps

    Google Now is presented as an intelligent personal assistant that delivers the right information at just the right time. Pretty awesome. After reading about it, it’s clear that there’s a market opportunity for a similar service targeted at sales reps.

    Here’s how the service might work:

    • Tight integration with CRM (Salesforce.com, NetSuite, SugarCRM, Microsoft Dynamics, Nimble, etc) and calendar (Google Apps and Microsoft Exchange)
    • Analysis of rep’s top opportunities and prospects based on score, grade, timeline, and likelihood of closing
    • Monitor prospects’ social media activity to determine if a contact is online so as to prompt the sales rep to make a call or send an email
    • Review sales rep’s daily activity and automatically build recommendations based on previous success (e.g. a sales rep might have a higher close rate when doing demos in the morning and cold calls in the afternoon, so the service figures that out and prompts accordingly)
    • Seamless geographic and timezone integration to make recommendations based on GPS location of the sales rep (e.g. out in the field for a meeting, automatically reference another prospect that’s in the area)
    • Connection to phone systems (cell and VoIP) that both manually logs dialed calls as well as automatically initiates calls (e.g. there’s a 2pm conference call and the service rings the sales rep’s phone at 1:59pm)

    Perhaps the functionality is a bit too broad but the general idea remains the same: analyze everything related to a sales reps and make intelligent recommendations at the right time and place. Sales reps are always looking to close more deals with a shorter sales cycle and smart software will help make that happen.

    What else? What are your thoughts on the opportunity for a Google Now-like service for sales reps?

  • Startup Review: Springbot

    Earlier today Springbot, a local Atlanta startup, announced a $3 million Series A round of funding from TechOperators and TTV. After going through the Flashpoint program at Georgia Tech, Springbot settled in on their current business model: marketing automation for small and medium sized ecommerce companies. Coming from the marketing automation world for B2B marketers, this is a great business idea and there’s a real need in the market.

    Here are a few thoughts on Springbot:

    • Ecommerce is a great market to go after, especially the Magento community with 150,000+ online stores
    • Being able to show true return on investment from the software in a timely manner is a beautiful thing (painkiller and not a vitamin)
    • Getting structured data out of an ecommerce system won’t be hard; getting clients to write content to do email blasts and social media will be very hard
    • Productized services will be an important component to get clients up and running quickly and successfully
    • Repeatably acquiring customers at scale in a cost-effective manner is going to be the number one challenge for the business

    Overall, I’m really excited about Springbot and want to see them be another major success in the Atlanta marketing software cluster.

    What else? What are your thoughts on Springbot?

  • Product Pricing Properties

    Continuing with yesterday’s post titled Pardot’s Pricing Progression Through the Years, I think it’s important to add a few more comments on the topic of pricing. Too often, entrepreneurs labor to set the perfect price before they’ve even launched the product. The best thing to do is to get out and talk to prospects to get a better understanding of the value provided. While they won’t necessarily be explicit, they will provide feedback and information to make a better decision.

    Here are a few thoughts on properties of product pricing:

    • Product pricing has nothing to do with a cost plus formula (e.g. it cost me $10 to make it, and I want to make $3 on each sale, so I’ll charge $13 for it) and everything to do with value provided
    • Product pricing should scale with value provided to the customer (e.g. as the number of seats/transactions/usage grows, so too does the price)
    • Product pricing should be as simple as possible while still capturing the appropriate value
    • Consider having several pricing tiers where the tier you want most customers to buy is accented by the other tiers (e.g. a major jump in pricing or a major difference in functionality so that human psychology causes the person to focus in on a specific choice)
    • Work to differentiate against the competition based on value and not based on price
    • When it doubt, charge much more than you think something is worth as it’s easier to lower prices than to raise them

    Pricing is a peculiar part of the startup process that should evolve over time. At a minimum, keep pricing straightforward and oriented around capturing value.

    What else? What are some other product pricing properties?