David Cummings on Startups

Category: Sales and Marketing

  • Don’t Ask Yes or No Questions in Sales

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    Continuing with our sales theme from yesterday, the next topic I want to look at is asking questions during the sales process. We’ve been trained by our parents to be polite and ask yes or no questions (e.g. can I have a second piece of cake, can I go to Jimmy’s house, etc). The problem with yes or no questions during sales is that you’ll do all the talking and prospects will quickly close out the conversation. The most important thing you can do during sales is to get the prospect talking by asking quality, open-ended questions that start with the following words:

    • Who
    • What
    • Where
    • Why
    • When
    • How
    • Which

    A great question to always have handy is “How so?” That way, the prospect can continue explaining whatever it is they were talking about and go into greater detail. The best sales people are great listeners and ask great questions. Sales is about listening more than selling.

    What else? What are some other tips related to asking questions in sales?

  • Features, Benefits, and Advantages

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    At today’s EO Accelerator education workshop on sales, one of the comments the facilitator, Jim Ryerson, said really caught my attention: every company needs to quickly explain their features, benefits, and advantages. Most startups talk about features and benefits, but rarely explicitly get into their advantages. Let’s look at simple definitions in the startup context:

    • Features – product functionality and abilities
    • Benefits – the outcomes from using the product features
    • Advantages – differentiating factors compared to other competitors in the market or traditional methods

    For the advantages, stating the competitor’s name isn’t required, but a nice sales tip when a prospect says they use a competitor is to ask how they accomplish some task or provide some service that the other company doesn’t do, without being condescending. For example, say your competitor doesn’t offer quarterly strategy calls you might ask, “How did your most recent quarterly strategy call go?” Of course, since the competitor doesn’t do those you’ll get the prospect thinking as to what else the competitor doesn’t do.

    My recommendation is to have scripted messages around features, benefits, and advantages while making sure everyone in the startup is on the same page.

  • What’s your FOTS plan?

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    Sometimes startups need to engage in good old fashioned hand-to-hand combat and hit the streets to get customers. Twitter and Foursquare launched this way at SXSW. A friend of mine introduced me to FOTS recently which stands for Feet On The Street and the idea behind it is to set up a points system for your team members along with relevant goals (e.g. 100 points per quarter). Here are some examples:

    • 1 point for each business card collected
    • 3 points for each scheduled meeting
    • 3 points for each targeted referral
    • 5 points for each book delivered
    • 10 points for each face-to-face meeting completed
    • 40 points for serving on a panel

    Now, activities should not be confused with results, but this is the right idea. These types of activities are more closely associated with professional services firms but can be applicable to a variety of startups.

  • Sales Rep Territories and Multiple Lead Queues

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    Building a sales team is one of the more difficult things to do as an entrepreneur. You see, sales people are a great type of person that can sell themselves better than anybody, but it isn’t easy to determine if they’ll be effective for your product and prospects. Another challenging aspect of building a sales team, in addition to finding the right people, is determining who gets what leads. The traditional approach, especially with field reps, has been territories or geographic regions. The biggest challenge with territories for fast growing companies is that as you hire more sales reps territories inevitably shrink leading to disillusionment among sales reps, especially if their sales volume goes down after being a high performer.

    We have an inside sales team and don’t do territories. Here’s what we do:

    • Two different lead queues for round robin assignment of leads
    • The first queue is for regular leads that come from standard sources like white paper downloads, campaigns, etc
    • The second queue is specifically for test drive sign-ups as those are our best and highest qualified leads

    Both queues are round robin and by having two different queues we solve the problem of the highest quality leads getting passed out in an equitable manner. This avoids the situation where all leads go to the same queue and certain reps having bad luck with the leads that come their way.

    My recommendation is to think through these challenges early in the process of building a sales team as it can help the moral and effectiveness during fast growth periods.

  • Intro to Marketing Automation

    Marketing automation is one the fastest growing software-as-a-service markets. The idea behind marketing automation is to consolidate many of the traditionally disparate marketing tools into a single web-based product. Here are some of the marketing tools found in a marketing automation platform:

    • Email marketing – support for broadcast emails like newsletters and one-off campaigns
    • Landing pages – web pages that are optimized for converting visitors into prospects via a form
    • Forms – fields used to capture input from visitors often in exchange for items like white papers, free trials, webinar sign-ups, etc
    • CRM integration – bi-directional connection to common customer relationship management systems like salesforce.com, SugarCRM, NetSuite, and Microsoft Dynamics CRM
    • Lead scoring and grading – automatic scoring of prospects based on activities they perform as well as grading based on explicit data points about the prospect relative to the ideal customer profile
    • Drip programs – periodic emails and activities triggered by events and time (e.g. send email A right away, if prospect clicks a link in the email notify the sales rep and remove from the drip program, if not, send email B 10 days later, and so on and so forth)
    • Automation rules – powerful logic-driven conditionals to change scores, send emails, move prospects between lists, notify sales reps, and more based on a variety of criteria
    • Anonymous visitor ID – identify the visitor’s company based on their IP address so that a sales rep can follow up as well as know that someone at the company is potentially interested
    • Prospect tracking – individual lead tracking of all activities like web pages viewed including length of page view time, forms completed, email opens, email clicks, file clicks, and more
    • Closed loop ROI reporting – track money spent to generate leads all the way through deals closed so that marketers can understand the success of campaigns even where there’s a long sales cycle

    Other common functionality like file hosting, lists, segmentation wizards, site search, and paid search integration is often included as well. Again, the general goal is one single system that replaces legacy systems like email markting tools and forms manager while adding significant new functionality like one-to-one tracking. In the end, sales and marketing teams are much more effective with marketing automation. My recommendation is for B2B companies with a sales and marketing team to seriously consider a marketing automation platform.

  • Quick Email Marketing Design Best Practices

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    Email marketing continues to be an effective part of integrated marketing. Amazingly, companies still don’t follow some of the simplest design best practices when it comes to building email creative. Here are some quick tips to follow:

    • The majority of email clients have images turned off by default, so design for that lowest common denominator
    • Test the design in the most prevalent email clients (e.g. Outlook, Lotus Notes, Yahoo! Mail, Gmail, etc)
    • Seriously consider text-only emails, especially for B2B audiences
    • Remember to have calls to action throughout the email
    • Spend as much time on the subject line as on the email content
    • Invest in a good email marketing platform
    • Try using existing email templates as a foundation
    • Design for recipients to scan the message, with visual nuances like bold and bullet points
    • Know that the preview pane is only a few hundred pixels tall

    What else? What are some other email marketing design best practices?

  • Presentation Slides Should be Simple

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    We try our best at our annual user’s conference every year but inevitable one issue always crops up: way too many words on presentation slides. It’s frustrating to sit in the middle of the room and have a hard time paying attention to the speaker because the current slide has 100 words on it in a small font.

    Here are some simple rules to follow:

    • Reduce the number of words per slide as much as possible, and then cut them in half
    • Follow Guy Kawasaki’s rule that the font size should be no smaller than half the age of the oldest person in the audience (e.g. a 60 year old person present would result in a font no smaller than 30 point)
    • Shoot for no more than 10 words per slide, if possible
    • Remember that presentation slides are different than slides that you email to people, which can be fancy and detailed
    • Include a photo or visual cue for each slide to add visual interest

    What else? What other tips do you have for presentation slides?

  • Big Cos Don’t Always Need a ROI

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    Recently I was talking to a hot startup in town that had completed a project with a Fortune 1000 company last month. After inquiring about the economics of the deal, goals, and outcomes it became readily apparent that there was no return on investment (ROI). Casually, I asked if the customer is going to continue with the next round of the project, which is almost the same as the first. The answer: yes, of course, they are going to continue working with us.

    It seems strange that the big co is going to move forward when the results show they’ll lose more money. The takeaway is that for certain leading edge technologies, a ROI isn’t critical if it enables the big co to learn about new tools and markets. At certain early points in the product adoption lifecycle, companies will spend money simply to experiment.

  • Giving Out Awards as a Business Model

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    As part of being a business model aficionado I enjoy learning how companies make money (hint: it isn’t always obvious). One interesting model that I don’t think people pay too much attention to is that of giving out awards as a money making strategy. Here are a few examples:

    • The Who’s Who books where you “win” recognition for being outstanding at what you do only to be hit up for $50 for each book you want with your information (I almost fell for this in high school)
    • Best Places to Work awards (we’re always finalists but have yet to win) where the company giving out the awards makes money off the HR consulting firm that administers the survey and then has the applying company pay if they want to see the results
    • Fastest Growing Company awards (we’ve won a couple of these) where the award winners are invited to a fancy dinner or multi-day conference, and have to pay the standard event fees, becoming a significant money maker for the company that gives out the award

    I think giving out awards as part of a business model is interesting and should be considered for certain types of companies. For many web companies it doesn’t make sense but it is a successful avenue for many traditional companies.

    What else? What are some other examples of awards as business models?

  • The Post-10-Customers Startup Sales Strategy

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    Today I had the opportunity to spend 90 minutes with a startup in town and talk about their go to market strategy. They launched a couple months ago and have signed up 10 paying customers through a combination of referrals and general search marketing. The big problem: sales aren’t going as well as they would like, cash is running low, and they don’t have a sales strategy.

    The biggest challenge for technical co-founders is transitioning from being product builders to product sellers.

    Here’s the advice I gave:

    • Prepare to be the sales rep, sales engineer, and product manager
    • Charge significantly more than initially thought for the product and listen for people saying the product isn’t worth it (that happens more often than people saying you should charge more)
    • Manage the four main sales metrics: calls, demos, opportunities, and deals won
    • Understand they’ll be ratios like the following: to win one deal it takes three opportunities, to get one opportunity it takes three demos, and to get three demos it takes 150 calls
    • Pick the most promising vertical from the first 10 customers and use Jigsaw.com to generate a list of 500 applicable companies plus employees
    • Plan for four hours a day of calling on the companies, with the expectation that it’ll take 8-10 calls per company to get the right person on the phone

    Employing this strategy will quickly reveal if the right vertical has been selected, and if so, a path to success will be eminent.

    What else? What other recommendations do you have for startups working on their sales strategy?