Posts filed under 'Sales'
May 2nd, 2013
A talk I enjoyed by Simon Sinek (@simonsinek) on “How Great Leaders Inspire Action.”
Some great insights from Apple, Dr. Martin Luther King, and the Wright Brothers:
- Why -> How -> What
- Why is not “to make a profit” that’s a result..
- Why is your purpose, your reason for existence.
- Common approach is What -> How -> Why but much less compelling.
- People don’t buy what you do they buy why you do it.
- Dr. King said “I have a dream” not “I have a comprehensive 12 point plan.”
Sinek is the author of “Start With Why”
February 16th, 2013
This is based on a real engagement that started with the conversation in “Living In Anticipation With Schrodinger’s Leads.”
The CEO placed a stack of about 30 business cards on the conference table: “See, here are all of the leads from the trade show.”
“Would you like us to put together a simple campaign where we e-mail them an update of what’s happened since the show and call them once or twice to see if they are interested in a longer demo or an evaluation?” I asked.
“No, that’s not why we asked you to come in, these guys will call when they are ready,” he answered, “We had a visit from someone in sales at BigCo [a large firm in Silicon Valley], he came by our office last week because they are interested in our product and we need your advice on the deal.”
I knew that the two founders had worked together at BigCo before striking out on their own two years earlier when a downturn had triggered layoffs that they used it as an opportunity to launch their startup.
“I cannot figure out how to price the configuration,” the CTO spoke up for the first time, “I can’t figure out if I should charge $7,500 or $15,000. They could technically get by with one license but they should probably pay for two because they have come back and asked for some consulting to be bundled in to close the deal. We quoted had quoted them $7,500 but it seems like it may be a lot of work.”
For a brief moment I was reminded of an early morning ride to the airport on 280, the sun was barely up and the fog was very thick; we had left a little later than planned and were driving a little faster than visibility might have warranted. I really wanted to have the sun come up and burn off the fog.
“Can we just back up a minute and walk around the situation a little more? The guy from BigCo came to your offices? He didn’t ask you to come to his?” I asked. BigCo offices were only a few miles away but it would unusual for them to visit a small vendor unless they were serious about a deal and wanted to get a real sense of company size and activity level.
“Yes, Mike and I worked with him back at BigCo and he wanted to talk to us about deal for a license to help them with a contract they are working on with a Japanese company. He had called me earlier for a budgetary quote for a single license but now he wanted to negotiate a discount and get us to throw in some consulting to close the deal” the CTO elaborated.
“How much consulting?” I asked.
“They need us to convert the work in progress and library elements for a business unit of [a major Japanese company]. They are putting together a deal to sell software to about 120 engineers. If the Japanese engineers have to re-enter the work in the new system the deal won’t go through, if BigCo pays for outsource engineering time to do the translation by hand it’s probably a team of ten to twenty for three to six months. But they would do it by hand; if we use our tools it’s a week or two. The Japanese don’t like the idea of manual translation since the errors are unpredictable: if we do it automatically we also automatically verify, and if they find an error then we can fix our code and re-run. It’s cleaner,” the CTO concluded.
” OK, so aside from doing it with this outsource team do they have anybody else that can do the translation?” I asked.
“No one else has software that has already been used in production. We have two other customers using our tools to allow different teams to move this same kind of data back and forth between different systems,” the CEO explained.
We calculated that the deal was worth on the order of 2-3 million dollars in license revenue to BigCo and the outsourcer was probably going to charge between $60,000 and $240,000 depending upon the real scope and where engineering labor was located. So there was something like $1.5M to $2M in margin after cost of sales and support for the deal.
I suggested, “I think we should quote them between $400,000 and $600,000 for the translation, verification and support of the translation, and a license to access the translation technology on-site in Japan. You are going to be saving them direct cost of probably $120,000 or more, your approach is an order of magnitude faster, repeatable, scalable, and probably two to three orders of magnitude more accurate. You are enabling a $2M deal plus if they win this deal it means that they can flip other Japanese firms to their software. We will probably end up at half to two-thirds of the opening but we should start a the high end of a defensible value range.”
“But we have already quoted them $7,500 for a license. How do I get to $400 grand?” the CEO protested.
I thought for a minute and then asked,”When does the quote expire?”
“I didn’t put an expiration on it,” the CTO said.
I said, “OK, we have to call your contact and send him an e-mail advising him that we will honor the quote for another 30 days but after further analysis of their requirements we think that they need a different product and some related consulting. We are happy to furnish them the license we quoted but we are not discounting it further and we are not throwing in any consulting to get the deal. We would like to request a meeting to fully scope the project but we anticipate that it will cost between $400,000 and $600,000 to meet the quality and delivery expectations of his end customer.”
There was more back and forth but after we walked around it a few more times it was clear that they were bringing considerable value to BigCo to close this opportunity. We drafted and sent an e-mail to their contact and then read it aloud to his voicemail since it was now dark out and he had gone home.
We ended up in a meeting with at the BigCo site with folks from corporate and the lead salesperson from their Japanese distributor. This led to a month of serious conversations that uncovered some additional requirements that neither side had considered, allowed us to run some test cases that increased both sides confidence, and allowed us to develop a detailed multi-phase project plan that included not only our work but key tasks from their team and the Japanese customer.
It took another two months beyond that for BigCo to give us a purchase order–probably because the Japanese customer waited for the end of the year to squeeze the best deal out of them and they didn’t want to give us an order until then–for about $320,000 for a mix of licenses, a month of on-site work in Japan, and a year of support and follow up.
Especially when you are selling to enterprise you need to calculate the real value you are creating, this normally requires you to thoroughly understand their needs and constraints and develop what is typically a multi-phase project plan detailing commitments from both sides to make it happen.
February 15th, 2013
The following is a real conversation–at least to the best of my recollection–from a few years ago.
We met with a startup that had made a few sales of a translation product and was also doing some consulting work that leveraged the capabilities of the next generation product they were developing. The current product was in production use at several firms. The two founders were engineers who each had more than decade of practical experience doing the kind of technical translation work that they had developed the product to help automate.
They had invited us in to see if we could help them generate more leads and close more deals. We met in October in their office, it was a 20′ by 20′ space in a small complex chock full of other technology businesses. They had a conference table up front, one desk along each sidewall, and a row of bookshelves along the back full of technical manuals and papers.
They told us and they had attended an industry trade show a few months earlier in June, which prompted me to ask, ”Just to help us get some understanding of your current sales process, what happened to the leads you gathered from conversations at the trade show?”
The CEO got a smile on his face and said, “we got about three dozen business cards from folks who stopped by the booth and were interested in our software!”
There was a pause that lengthened and I realized I needed to probe further.
“So what happened next?” I asked.
The CEO said, “well, two of people who gave us cards called within a few weeks after the show and we sold three licenses to one of them, the other decided not to go forward after we gave them benchmark results.”
This was great news. “50% is a great close rate after a demo for a product that costs $7,500 dollars: what happened with the rest?”
The CEO jumped up and said, “We still have the leads.” He walked to the back of room and pulled out a small cardboard box about the size of one they ship 250 business cards in. He brought it back to the table and opened, taking out a bundle wrapped in tissue paper. I was reminded for some reason of the way that people who collect comic books or baseball cards carefully pack away the items in their collection.
He unwrapped the bundle and there were about 30 business cards in the middle. “See: we still have the rest of the leads. They are all right here!”
“Would you like us to put together a simple campaign where we e-mail them an update of what’s happened since the show and call them once or twice to see if they are interested in a longer demo or an evaluation?” I asked.
“No, that’s not why we asked you to come in, these guys will call when they are ready,” he answered.
So, that was their sales model, they would demo at a trade show and answer the phone. As we talked a little more I realized that they could not face initiating a follow up conversation, it was easier to imagine the leads appreciating like a mint condition stamp or collectible action figure in an unopened box. In their mind the prospects were becoming more desperate and at some point would have to call them.
Whether your odds of closing a lead are one in two or one in ten you cannot treat an opportunity like Schrodinger’s cat, possibly still alive as long as you don’t look too closely. The only way to get better at sales is to start following up and having serious conversations with prospects.
Many B2B startup teams find early customers by doing business with people they already know and referrals from friends that come to them as warm leads. But in order not only to sustain but to grow your business you have to learn how to do business with strangers.
See also “Six Tips for Writing an E-Mail to a Prospect or Potential Partner”
For why they actually called us in see Price Based On Your Value To The Customer’s Situation
February 12th, 2013
“I spent some time working in the television industry, and I learned a technique that writers use. It’s called “the bad version.” When you feel that a plot solution exists, but you can’t yet imagine it, you describe instead a bad version that has no purpose other than stimulating the other writers to imagine a better version.
For example, if your character is stuck on an island, the bad version of his escape might involve monkeys crafting a helicopter out of palm fronds and coconuts. That story idea is obviously bad, but it might stimulate you to think in terms of other engineering solutions, or other monkey-related solutions. The first step in thinking of an idea that will work is to stop fixating on ideas that won’t. The bad version of an idea moves your mind to a new vantage point.”
Scott Adams in “How To Tax the Rich“
Sometimes its easier to
live in anticipation of a potential sale or business relationship than to initiate a conversation and risk getting rejected. If you are finding it hard to get started on an e-mail to a prospect or a potential partner here are a couple of things you can try:
- The Hollywood Approach: write the bad version. I realized in reading Scott Adam’s article “How To Tax the Rich“ that “writing the bad version” is something that we often do just to help a team move forward with an e-mail to a prospect or potential partner.
- The Schoolboy Approach: write an outline. Normally shorter is better for an opening e-mail and you may be able to expand each item into a single sentence instead of a paragraph or a section and be done.
- Add a Middleman: call/talk someone and explain the key points you want to make. Extra points for recording it to allow for easier capture instead of breaking your flow to write it down as you go. We sometimes act as an interviewer or a proxy for the target audience to help a client unlock insights.
- Quit Typing: put down the keyboard and pick up the phone (or click on Skype) and call the person you owe the e-mail and make your points directly. Extra points for making your own recording of the voicemail you leave when you cannot reach them so that you can now send a more coherent e-mail.
- Begin With The End In Mind: Write the e-mail you would like to get in response to your e-mail. Use that as a guide to crafting your approach (from Stephen R. Covey’s 2nd Habit: “Begin With The End In Mind”).
- Use Your Right Brain Instead Of Your Left: sketch out the issue or proposal on a whiteboard, a piece of graph paper, a 3×5 card, or a napkin depending upon where inspiration strikes you.
See also
January 24th, 2013
Just a heads up that the early bird rates for our next “Engineering Your Sales Process®” Workshop close Sun-Jan-28.
This is the same workshop that Scott Sambucci and Sean Murphy offered at the Lean Startup Conference in December 2012 but we are limiting the attendance to 12 entrepreneurs to allow it to be even more interactive and in depth. Our focus is on entrepreneurs who are selling complex new products to businesses and face these challenges among others:
- You can’t get potential customers to call back.
- Prospects won’t make a decision.
- Prospects like what they see in beta and ask for extensions but will not buy (yet).
- Your deals stall.
- Prospect stays with the status quo.
This interactive workshop will help you learn from these problems by using conscious planning and experimentation. Traditional sales training stresses “every no moves you closer to a yes.” Our approach to engineering your sales process says instead, “What looks like noise is often actually data.” Designing and debugging a repeatable sales process is key to a sustainable business, and we’ll address how to diagnose common problems to determine likely root causes. You will leave with a scientific approach to understanding your customers’ needs and their buying process so that you can scale your business in harmony with it.
ABOUT THE SPEAKERS:
Sean Murphy, CEO of SKMurphy, Inc. has taken an entrepreneurial approach to life since he could drive. He has served as an advisor to dozens of startups, helping them explore risk-reducing business options and build a scalable, repeatable sales process. SKMurphy, Inc. focuses on early customers and early revenue for software startups, helping engineers to understand business development. Their clients have offerings in electronic design automation, artificial intelligence, web-enabled collaboration, proteomics, text analytics, legal services automation, and medical services workflow.
Scott Sambucci is the Chief Sales Geek at SalesQualia, a company dedicated to improving sales performance. With more than 10 years in Silicon Valley and 15 years in sales, management, and entrepreneurial roles in the software and data industries, Scott merges the attributes of a successful salesperson and entrepreneur, putting his experience to work for SalesQualia clients every day. He’s lectured at numerous universities across the world, presented at TEDxHultBusinessSchool in San Francisco, and recently published ”Startup Selling: How To Sell If You Really Really Have To And Don’t Know How.”
December 15th, 2012
If you missed SKMurphy and SalesQualia at Lean Startup Conference’s workshop, Sean Murphy and Scott Sambucci led an interactive workshop on developing and debugging your repeatable and scalable B2B sales process. In the workshop, we worked a number of sales issues that the attendees from lean startups had:
- Can’t get potential customers to call back
- Won’t make a decision
- Prospects like the beta, but they will not buy
- Deals stall
Quick Summary
Engineering Your Sales Process workshop will help you learn from common sales problems by using conscious planning and experimentation. Traditional sales training stresses “every no moves you closer to a yes.” Our approach to engineering your sales process says instead, “What looks like noise is often actually data.” Designing and debugging a repeatable sales process is key to a sustainable business, and we’ll address how to diagnose common problems to determine likely root causes. You will leave with a scientific approach to understanding your customers’ needs and their buying process so that you can scale your business in harmony with it.
You can view the slides at http://www.slideshare.net/SalesQualia/engineering-your-sales-process.
Also here is the link to a readable version of the sales map in mindomo http://www.mindomo.com/view?m=e18b84e308994b1d95a032583f3885bcces
Workshop feedback
November 17th, 2012
All companies, even those that take a lean approach, face these problems in B2B sales:
- You can’t get potential customers to call back
- They won’t make a decision
- They seem to like a ever-ending beta, but they will not buy
- Your deals stall
This interactive workshop will help you learn from these problems by using conscious planning and experimentation. Traditional sales training stresses “every no moves you closer to a yes.” Our approach to engineering your sales process says instead, “What looks like noise is often actually data.” Designing and debugging a repeatable sales process is key to a sustainable business, and we’ll address how to diagnose common problems to determine likely root causes. You will leave with a scientific approach to understanding your customers’ needs and their buying process so that you can scale your business in harmony with it.
| Early Bird $99
Regular $129
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Where: Silicon Valley, CA
ABOUT THE SPEAKERS:
Sean Murphy, CEO of SKMurphy, Inc. has taken an entrepreneurial approach to life since he could drive. He has served as an advisor to dozens of startups, helping them explore risk-reducing business options and build a scalable, repeatable sales process. SKMurphy, Inc. focuses on early customers and early revenue for software startups, helping engineers to understand business development. Their clients have offerings in electronic design automation, artificial intelligence, web-enabled collaboration, proteomics, text analytics, legal services automation, and medical services workflow.
Scott Sambucci is the Chief Sales Geek at SalesQualia, a company dedicated to improving sales performance. With more than 10 years in Silicon Valley and 15 years in sales, management, and entrepreneurial roles in the software and data industries, Scott merges the attributes of a successful salesperson and entrepreneur, putting his experience to work for SalesQualia clients every day. He’s lectured at numerous universities across the world, presented at TEDxHultBusinessSchool in San Francisco, and recently published “Startup Selling: How to sell if you really, really have to and don’t know how.”
November 8th, 2012
Are you tired of working hard on a sales opportunity only to find an unexpected issue that stalls the sales process?
You are not alone!
Having an effective sales planning process, sharing insight across the internal team and enabling great demos, greatly improves sales productivity and use of resources. Learn how to make this happen and greatly improve your sales results, including:
- Reducing “no decisions”
- Avoid having to go back two steps
- Improving sales process inefficiencies
- Work on better opportunities
- Use your resources more effectively
In this webinar, Averting Stalled Sales Opportunities, Ron Snyder and Peter Cohan show you the key steps to forestall a stalled sales process.
Topics covered:
- The Challenge causing stalled sales
- Elements of a Successful Plan
- Guiding the Sales Process- using the Plan
- Coordinating Activities, including Demos
- A Sample Plan
Sign up for the webinar here and receive your copy of the article: “How to Write a Strategic Account Plan.” Select the date that is most convenient for you;
- November 29 at 12:00 noon Pacific time
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- December 10 at 12:00 noon Pacific time
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Ron Snyder, of Breakthrough, Inc. and Plan 2 Win Software, has trained thousands of salespeople and managers on sales effectiveness, territory and account planning. Prior to that, he was a top ranked sales salesperson at Hewlett-Packard and a manager in the field sales force and a marketing manager.
Peter Cohan is the founder and principal of The Second Derivative, focused on helping software organizations improve their sales and marketing results – primarily through improving organizations’ demonstrations.
Sean Murphy, the moderator, is CEO at SKMurphy providing customer development services for high-tech companies. SKMurphy focus is on early customers and early revenue.
Please feel free to contact us for more information.
Ron Snyder
Plan2Win Software
rsnyder@Plan2WinSoftware.com
Peter Cohan
The Second Derivative
PCohan@SecondDerivative.com
September 7th, 2012
I was invited to give a workshop the day after the Dec-3-2012 Lean Startup Conference and have teamed up with Scott Sambucci to offer a revised and improved version of our “Engineering Your Sales Process.” Here is the overview for this half day workshop:
All companies, even those that take a lean approach, face these problems in B2B sales:
- You can’t get potential customers to call back
- They won’t make a decision
- They seem to like a ever-ending beta, but they will not buy
- Your deals stall
This interactive workshop will help you learn from these problems by using conscious planning and experimentation. Traditional sales training stresses “every no moves you closer to a yes.” Our approach to engineering your sales process says instead, “What looks like noise is often actually data.” Designing and debugging a repeatable sales process is key to a sustainable business, and we’ll address how to diagnose common problems to determine likely root causes. You will leave with a scientific approach to understanding your customers’ needs and their buying process so that you can scale your business in harmony with it.
You can register at http://leanstartupconf2012.eventbrite.com/
August 29th, 2012
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Great Demo!: How To Create And Execute Stunning Software Demonstrations
by Peter Cohan
Great Demo! provides sales and pre-sales staff with a method to dramatically increase their success in closing business through substantially improved software demonstrations. It draws upon the experiences of thousands of demonstrations, both delivered and received from vendors and customers. The distinctive “Do the Last Thing First” concept generates a “Wow!” response from customers.
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