Two Good Super Bowl Commercials

There were two Super Bowl commercials that caught my eye the other night.  One really funny one from Doritos and a somewhat serious, but very cool one from Dodge, narrated by the great Paul Harvey. I've embedded both below.

Doritos - Goat For Sale

[youtube http://www.youtube.com/watch?v=4d8ZDSyFS2g&w=420&h=315]

Dodge Ram - Farmer

[youtube http://www.youtube.com/watch?v=AMpZ0TGjbWE&w=420&h=315]

Blocking Out The Competition

Over the last few months, Twitter has removed the auto-preview feature for Instagram Tweets. So now you have to click through the link in the Tweet to see the photo. Presumably Twitter did this to encourage their users to use their native photo sharing application. When LinkedIn redesigned their profile page about a month ago, they dramatically decreased the exposure of a user's Twitter account. In fact, it's not even on the main profile page, you have to click "contact info" to see a user's Twitter account. This is a drastic change given the LinkedIn/Twitter integration that used to exist.

So LinkedIn is blocking out Twitter and Twitter is blocking out Instagram.

I think this is dangerous for LinkedIn and Twitter. I've written in the past about how difficult it is to build a successful B2C business. Your product has to be so great and so valuable if you want to win. You don't have the luxury of a salesperson whispering in the user's ear giving them context on your decisions or information about what's coming soon and how the product will improve. The product has to be great, right now.

Of course, I don't know all of the facts behind these decisions. But I do know that the effect of blocking out applications that users like is bad. And in a B2C business, what's bad for the "C" very quickly becomes bad for the "B".

Research & Preparing For Meetings

When preparing for an important sales meeting, salespeople will generally do a bunch of research; they'll read news articles, read the company's 10-k, check out the LinkedIn profiles of the people in the meeting, etc. Often, they'll spend money on Hoovers or other databases to gain any edge they can. Of course there's nothing wrong with this, but one thing to consider: how often has the thing that you currently care about most at work (the thing that is going to get you a big bonus) been available in a 10-k or a press release.

Sure, directionally we know that you want to grow revenue or cuts costs or prioritize a new product launch. But I can't learn the important specifics of that in the media or in a 10-k. Further, business has become so much more iterative over the years that, in my experience, by the time the media picked up on an initiative I was working on, we were already onto the next thing.

With that in mind, I would propose that when you do research, you prioritize having conversations with people on the inside. Before a meeting, find someone you can talk to that will help you prepare. It could be a junior person, it could be a personal assistant, it could be anyone that can help you get information.

These people should be happy to talk to you. You're not having these conversations to get inside info you shouldn't have access to, you're having these conversations to make the upcoming meeting more productive.

So when preparing for a meeting, yes, do your research. But more importantly, have conversations with people on the inside that know what people on the inside care about.

Selling To CEOs

Seth Godin had a good post a couple weeks ago titled, The danger of starting at the top where he talks about the downside of selling directly to a company's CEO. They key line is this:

When making a b2b sale, the instinct is always to get into the CEO's office. If you can just get her to hear your pitch, to understand the value, to see why she should buy from or lease from or partner with or even buy you... that's the holy grail.

What do you think happens after that mythical meeting?

She asks her team.

And when the team is in the dark, you've not only blown your best shot, but you never get another chance at it.

I agree and disagree with this. Two thoughts:

  1. Yes, you need to be careful when going straight to the top, but I don't think you need to be afraid of selling to the CEO directly. But you do need to be careful in your approach. In short, don't sell. Have a conversation. Ask about her business, what problems she has, talk about what you do, your industry, her industry, potential synergies, who would be good to talk to, etc. If you're not selling, you should be comfortable talking to anybody.
  2. While you're having conversations, you should also be evangelizing. That is, you should be drip marketing your prospects. I defined drip marketing in earlier posts as:

Regular, short and highly interesting/engaging/insightful pieces of information (most often without an ask) that educate the recipient and — just as importantly — change their perception of what you do in a favorable way.

If you're having conversations and "dripping" the right people, you should be free to navigate your prospect's company to find the person that will be most interested in your solution.

The Downside Of Good Reporting

It turns out that, even today, nearly all of the big checks in the ad industry are still being written for big, broadcast marketing efforts (television ads, radio ads, billboards on the side of the highway, etc.).  You might find this surprising given all of the conversion-based marketing channels that have popped up over the years. Advertisers no longer have to worry about not being able to track their ad spend. Marketing has become measurable. Google can tell you how many leads they drive to you so the problem of wasted ad spend should be over. So why are marketers continuing to spend on the big, hard to measure stuff? In many cases, the reason is that lots of ad buyers are really out to do one thing: avoid getting fired. So they’re very reluctant to take a risk on something that can be tracked. Many would rather their boss see a beautiful ad on the highway on her drive to work as opposed to a report showing that the new marketing campaign failed to drive a positive ROI.

With that in mind, in your early conversations it's important to understand where your prospect sits on this topic. My take is that high performing companies and individuals want to measure their performance and the performance of their vendors -- so that they can intelligently expand (or limit) partnership growth. If they are reluctant to measure success, they may not be the right partner as growing the relationship will typically be much more difficult.

Be cognizant of the fact that your partner might be hesitant to be measured. Try to get them to open up a bit on the topic -- it'll help you get a better sense of whether or not they're the right fit.

CEO Pay

According the AFL-CIO, the average Fortune 500 CEO made $12.9 million in 2011. After taxes, that's about $430,000 per month -- or $198,000 every two weeks. CEOs at big companies get paid a lot of money -- and my sense is that the top priority for most of them is to do whatever they can to keep those checks coming.

That's an important thing to remember the next time you're asking one of them to take a big risk on your product.

Individual Employee Budgets

The other day I wrote about the fast growing b2e2b business model where enterprise software companies make their product available (often for free) to individual employees. Then – after those employees love the product – they put pressure on their employers to buy the premium version or to buy the product for the entire enterprise. While I believe that this model is going to continue to grow at an extremely fast pace in 2013, there is no doubt that it’s inefficient – i.e. the employee has to go through a bureaucratic purchasing department to buy a tool that will make them better at their jobs.

That’s why I believe that, as we see b2e2b grow, I think we’ll also see this inefficiency addressed. That is, we’ll start to see more budgetary control put in the hands of the individual employee. Many companies – even large companies – already give their employees a cell phone budget. I think we’ll see this kind of control flow down to other productivity tools as well to the point that budgets won't be bucketed by division or group or team -- we'll see more and more money flowing into individual employee budgets.

Of course there are internal compatibility, security and scalability concerns that will slow down this trend, but I think this it's something for enterprise focused companies to watch out for in the coming years.

Enterprise Software & The Network

Fred Wilson posted a talk he did the other day on enterprises and networks. Including Q&A, the talk is nearly an hour. For me there is one incredibly important takeaway for software companies that are focused on the enterprise. And that is that in today's environment, in the long term, you must remember that your business model is a commodity, your software is a commodity, your customer service is a commodity and your sales team is a commodity. The thing that will provide you with sustainable, incremental value over the long term is your network of users. That is the one thing that is extremely difficult to copy in the long term. Enterprise focused companies that have large networks of engaged users that are adding value to the product simply because they use the product are the products that will win over the long term. Here are five good examples of enterprise software products that are successfully using their network to increase engagement and product value.

  • Yammer (users are an extension of the sales force)
  • LinkedIn (users -- i.e. job candidates -- are the product for recruiters)
  • Mongo DB (users improve the code by using the product)
  • DropBox (users are an extension of the sales force)
  • Disqus (user discussion drives increased traffic and engagement to participating blogs)

B2E2B (Business to Employee to Business)

We all know b2b and b2c, and even b2b2c. I'd propose that an emerging software business model is b2e2b (business to employee to business). While it hasn't been called out clearly like this (trust me, I've 'Googled' it) there are many companies that are already using this approach (Yammer, Dropbox, Xobni and others). The way it works is that a company builds a product that can be accessed directly by a single employee of an organization. As the number of users within a company grows and reaches a critical mass, the company then has a salesperson contact the organization to make the upsell -- e.g. business to employee to business.

Of course, this model is interesting in its own right. But there are much larger implications for enterprise software. Chris Dixon and others have talked a lot about the fact that enterprise technology is far behind consumer technology. As I've written before, I believe that the reason for this is that enterprise technology can get away with being bad. For example, if you're a payroll provider and you provide a lousy interface for employees you can get away with it because you only have to sell one person in HR on your product (and then they force ten thousand people to use it). But if you're a consumer site like Mint.com you can't get away with being lousy because you have to sell 10,000 people, one by one. You have to be great or you'll fail.

And this is why the b2e2b approach is so important. It’s radically changing the way enterprise software is built and sold. And as a result, we should see the quality of enterprise technology begin to catch up with consumer technology. And when it does, those big b2b companies that continue to rely on their brand or their sales force to drive sales will begin to collapse.

Facebook's 15%

You may have noticed that there are fewer posts in your Facebook feed these days. The reason? Facebook is now selling its ‘sponsored posts’ feature to individual accounts in addition to business accounts. So now, when you post an update to Facebook telling your friends that you’re going to the gym or looking forward to watching your favorite television show that post only appears in approximately 15% of your friends’ news feeds. But, if you pay a small fee (I hear around $5 to $10) Facebook will show that post to a much larger group of friends. This change has caused quite a bit of frustration for Facebook users. And rightfully so.  Many businesses and individuals have spent massive resources acquiring Facebook followers and have been using Facebook as a way to engage their customers for years. You can understand the frustration among businesses and individuals that suddenly have to pay to speak to their own network.

For Facebook, though, the move makes a lot of sense. They’re a public company now, and the market wants to know how they’re going to continue to add shareholder value.  And given that there are reasons to believe that their user growth is beginning to top off, there’s lots of pressure on them to monetize their user base.  Offering a paid product to their entire base of users – which, by the way, equates to about one seventh of the world’s population – is arguably a step in the right direction.

Of course, what’s good for Facebook’s stock price in the short term may not be good for its users. Beyond the anecdotal frustration, Mark Cuban and others are advising their companies to pull back from using Facebook as a primary marketing channel. And some of the bands I follow on Facebook have asked their users to begin following them on Twitter instead.

Facebook has to walk the thin tightrope of providing an accessible and valuable platform to the masses while it tries to monetize more and more of their user base. In the past, shareholders could argue that Facebook may have leaned too far towards providing the free platform. With this change, they’re now leaning in the opposite direction. They'll have to adapt their product and communication strategy to figure out how they can continue to thrive using this new model – and they better hope their users stick around while they do.

Results From My Super Bowl Commercial Experiment

5 years ago when I started this blog, I had a theory. The theory was that participating in big, broadcast marketing was a bad strategy. And that companies that continued to participate in it would likely see their stock prices fall over time. To test this theory, I selected a group of 6 companies that ran television commercials during that year's Super Bowl and noted their stock prices with the intention of measuring their performance against the S&P 500 index. The 6 companies were Pepsi Co., E-Trade, Anheuser Busch, Coca Cola, Bridgestone and FedEx.

Anheuser Busch was of course acquired by InBev back in 2008 so 5 years later that leaves me with 5 companies to test my theory. Here are the results:

  • The S&P 500 outperformed the mean of the Super Bowl stocks by just over 13%.
  • The S&P 500 dropped 2.2% during this period and the 5 Super Bowl stocks dropped 15.3%.
  • The S&P 500 outperformed 3 of the 5 Super Bowl stocks.
  • Only one stock price increased during the period (Coca Cola by 22%)
  • E-Trade's stock price ell by 83%.

Given the small sample size, I'm not sure the data is all that conclusive. But it certainly doesn't conflict with my theory. So I'll stand by it for now...

Insights From Jeff Bezos

[youtube http://www.youtube.com/watch?v=kA_0W4hIhuA&w=420&h=315]

Somebody sent me this video of Jeff Bezos being interviewed by Charlie Rose back in 2011. The purpose of the interview was to announce the new Kindle that came out at the time. In the first part of the interview, Rose really pushes Bezos on how the Kindle competes with the iPad. I loved watching the way that Bezos responds. Brilliant. If you don’t have time to watch the entire video, here are the key lines/insights for me.

  • The Kindle doesn't compete with the iPad. It is the best device for long form reading. Amazon has made no tradeoffs in building the best product for long form reading.
  • Amazon isn’t providing the experience, that’s Hemingway’s job. They are providing the ability to enjoy that experience.
  • The number one thing that Kindle users are doing is reading Stieg Larsson. The number one thing iPad users are doing is playing Angry Birds.
  • Reading a book on an iPad is like reading while someone is pointing a flashlight in your eyes.
  • Amazon doesn’t want to be the 79th tablet. They want to be the best at what they do.
  • He urges employees to not wake up worried about competitors, but to wake up obsessing about the customer.
  • Amazon doesn’t force customers to pay for its own inefficiencies.
  • Business is not a zero sum game. Competitors can thrive together.
  • Amazon’s mission is similar to Sony’s missions when they started.  Sony’s mission was to make Japan a leader in building quality products. Their mission was bigger than themselves.

Groupon, Chest Pain And Consumer Behavior

It was unfortunate – but not very surprising – to see the news this week that Groupon laid off a portion of their 10,000 employees. If ever there was a predictable bubble, it was daily deals. But it was fun while it lasted, and you can see why there was so much overinvestment in the space. Groupon’s pitch to merchants was to ask them to take a loss by making a super compelling offer that consumers couldn't resist. The offer would generate tons of new customers that would come back and make profitable purchases for years to come.  On the surface, it seemed pretty compelling.

With the Groupon news in mind, I spent some time this week thinking about the problem of hospital readmission penalties in the healthcare industry.  For those that don’t know, the government is trying to improve accountability and the quality of patient care by imposing financial penalties on hospitals that have high rates of 30 day hospital readmissions.  Depending on the rate of readmission, the government will reduce Medicare payments by as much as 1%.  For an industry with very thin margins, this is a pretty big deal.

One of the major challenges with hospital readmission penalties is that now doctors have to not only care for the patient effectively during the initial encounter, they’re now responsible for changing the patient’s behavior after they leave the hospital.

Here’s an example: imagine an older man that doesn’t take care of himself.  He smokes, eats fatty foods, lives a sedentary lifestyle and hasn’t visited a doctor in years. One day, a pain in his chest becomes so severe that he is forced to check himself into the emergency room.  After spending a couple nights in the hospital getting treatment, he starts to feel better. When he’s finally discharged, the doctor recommends that he stops smoking, follows a cardiac diet, takes a prescribed medication, and visits a cardiologist for a checkup every week for the next 6 weeks.

But this is a person that is not used to doing any of those things. The problem that caused him to appear in the hospital – severe chest pain – is not an immediate problem for him anymore.  He feels fine.  So the hospital is being asked to significantly change the behavior of someone without the initial (and powerful) motivator in place. As a result, he’s very likely not going to follow the doctor’s orders and he’s very likely going to reappear at the emergency room.

It occurred to me that this is the fundamental problem with the daily deal industry.  Groupon has the same challenge that hospitals have.  Just like severe chest pain, their deals change behavior. Most of the people that buy half-off skydiving, or cooking classes, or services at the super expensive nail salon, weren’t planning to do those things until they saw the deal sitting in their email inbox.  But because the deals are so compelling (50%+ off) they bought them anyway and, as a result, Groupon was able to flood their merchant clients with lots of new business.

But it’s because the initial deal is so compelling that it becomes nearly impossible for Groupon to reliably deliver on their ultimate promise of bringing their merchants new, loyal and profitable customers.  Just like severe chest pain, the daily deal changes behavior.  It forces people to do something that they wouldn’t normally do.  But without a continuous and powerful motivator in place (like chest pain or 50% off) the doctor can’t get the patient to come in for an electrocardiogram and the nail salon can’t get the customer to come back for a second manicure.

The Elevator Pitch is Dead

A while back there was a post on the Harvard Business Review blog titled, Win the Business with the Elevator Pitch.  The post started with this scenario:

Pretend that you are in an elevator at one of your industry's trade shows. You're heading down to the lobby when the doors open on the thirtieth floor. You instantly recognize the executive who walks in and quickly glance at his name badge to confirm he is the CEO of the most important account you would like to start working with. You have never met him before nor have you been able to generate any interest from his organization. You have forty-five seconds to introduce yourself, explain what your company does in a way the CEO would find interesting and applicable, and motivate him to take the action you suggest. Ready? Go!

The post went on to give advice on the best way to structure your elevator pitch and even gave a script.  I wrote the following comment on the post:

Great post, Steve. Though I have to tell you that if I ever found myself in the position you describe in the first paragraph, the last thing I would do would be to try to pitch.  Business people, particularly CEOs, hate being sold to -- especially in person, in an enclosed area, by someone they don't know.  A better approach might be to introduce yourself casually, talk about the event or the weather or sports -- basically show that you're a nice guy.  Then if you happen to bump into the CEO later on, you can start to talk more about what you do and -- if appropriate -- have a conversation about how you might work together.

Of course it may be unlikely that you'll get this CEO alone again -- but I'd argue that it's just as likely as converting a 45 second elevator ride with someone you've never met into a material sale.

That said, if you do decide to make the pitch on the elevator the framework you've described above is a great one.

The elevator pitch is dead. Yes, you need to be able to quickly and concisely explain your product's value. And having an elevator pitch in your mind is a great way to do that. But in today's complex sales environment, battering CEO's with your sales pitch is not going to work.

It's not about top-down pushy sales or bottoms-up deference to your prospect where you simply "learn about their business", it's about doing the work to build synergistic partnerships that scale way beyond the sum of the two parts.

So if you find yourself in the elevator with your dream prospect, don't pitch them -- get to know them. And if you're able to keep the conversation going outside of the elevator learn about what they do and tell them about what you do.  And get their implicit permission to keep in contact with them. And when it's appropriate to talk to them about how a partnership could help both of your businesses, send them your ideas and setup a time to talk (preferably, not in an elevator).

B2B E-Commerce

Erin Griffith had a good post on PandoDaily titled, Whatever Happened To The Promise of B2B E-commerce. I find this to be a super interesting topic. In short, Erin argued that "the trillion-dollar promise of B2B commerce may finally be on its way."

Personally, I'm not so sure. I posted the following comment -- though for some reason it never got posted to the post, so I thought I'd post it here.

Great post, Erin.

Though I’m not sure I agree that b2b e-commerce is finally on its way.  There are multiple, inherent transactional differences between b2b and b2c that, I believe, make a transition to b2b e-commerce nearly impossible in the short to medium term. There are so many steps in a large enterprise’s buying process that cannot be replicated in a scalable manner online (customized legal agreements, reference checks, price negotiation, unique purchase approval structures, payment terms and the individual emotions that drive big purchases). Just look at the legal side for a moment. Most e-commerce sites have their own “terms of use” section that dictates the legal terms associated with the use of their site. Large enterprises will want to review and customize these terms of use based on their own policies, procedures and appetite for risk.  It’s very difficult for e-commerce sites to allow for this in a scalable way across hundreds or thousands of clients.

Now you may argue that e-commerce has come such a long way that technology should be able to replace much of this bureaucracy. But in a large enterprise each of these steps represent a task that is completed by someone with a job. So you can either eliminate those jobs or assign those individuals to work on something else. But just like purchasing, reorganizing non-strategic job roles for an unclear upside will take a long, long time. And in my view, real growth in b2b e-commerce is simply going to have to wait.

Social Selling: 3 Questions & Answers

There’s been quite a bit written recently about social selling – that is, using social media to help companies and salespeople drive revenue. Much of the advice is targeted at companies -- with tips on how to have conversations with prospects/clients through social media. I’m much more interested in how individual reps can use social media to their advantage.

A few thoughts:

1.  Which social networks should I be posting on?

I've written in the past about social graphs. You need to decide on the audience that you'll interact with in each social network. For me, at a high level, I interact with people I know professionally on LinkedIn, pretty much anyone on Twitter, friends and acquaintances on Facebook and only very close friends on Foursquare. You can view a list of my social networks on my About page.

It seems to me that the best social network to talk to your prospects and clients is LinkedIn and possibly Twitter. Your prospects/clients, for the most part, don't need to see your Facebook photos.

2.  What is the point of social selling?

So often I hear salespeople talking about how their clients/prospects just “don’t get it”. They have an awesome solution to their problem but their contact just doesn’t see it. It’s not that the contact is stupid, it’s that they’re looking at the problem through a much different lens. As a result, they don’t see your solution as the clear answer. Using social media intelligently is a great way to slowly and steadily begin to get your clients/prospects to see their problems through your lens. That isn’t to say you should be posting things to try to sell or to teach people something they don’t know.  Instead, the approach is to show your audience how you see things and let them come on board with your way of thinking at their own pace. Social sales is a very passive form of "drip marketing". I've written a few posts on drip marketing -- check them out to get some more context on this -- you can find them here, here and here.

3.  What kinds of things should I be posting?

Knowing that the goal is to attempt to get your clients/prospects to see the problem the way you see the problem, you should post links to intelligent articles, blog posts, white papers, etc. related to the problem that your product addresses. Don't be afraid to widen your problem into other areas -- you don't want to appear to focused on your own small world. The critical thing here though is to never just post a link. Post a short note about the topic with your take on it or a quick introduction as to why people should find it interesting. The point is that it's interesting to you and something you're passionate about so you want to share it with your network. Finally, if your company gets some good press, I'd advocate posting links to those articles and videos on your social networks. Don't overdo it and post it in a humble way, but allowing your clients/prospects to see what others are saying about you and your company is another effective and passive way to help clients/prospect see you in a better light.

In short, social sales is not going to close deals. But if done well it's a great way to get your clients/prospects to change the perception of their problem, your solutions, your company and you in a favorable way.

Segmenting the Unemployment Rate

Any data set is a lot more useful if you segment it.

As an example, let’s say you find out that your e-commerce website converts at a rate of 3%. That is, for every 100 visitors, 3 make a transaction. That’s somewhat useful data, but it isn’t actionable -- i.e. you can't do much with it -- until you segment it. 

You need to break the users into segments: by gender or age or income, etc. When you do, you’ll find actionable insights that will allow you to take actions that will increase your conversions. For example, you might find that men between the ages of 30 and 40 that make more than $100k per year actually convert at the rate of 20%, but that most of your site’s visitors are in lower converting segments, thus the aggregate 3% conversion. With information like this you can adjust your marketing to bring more higher converting users to your site -- you'll get more marketing bang for your buck.

We must do the same with our unemployment data. The unemployment rate -- last time I checked -- was 9%. This number is quoted over and over again in the media as if, by itself, it actually means something. 9% unemployment is not actionable.  It must be segmented.

For example, the U.S. unemployment rate for those with graduate degrees is 2%, college grads 4.5%, high school grads 9.7%, non-high-school grads 15%. 

It’s critical to recognize the difference between these segments. The data is telling us that for the educated segment of our population, unemployment is at or well below its natural rate. But for the uneducated population it’s super high. This is actionable data. This tells us that there isn’t necessarily a shortage of jobs. There may actually be a shortage of qualified labor. Politicians should keep this segmentation in mind when evaluating "job creation" vs. "job training" programs.

Soap Operas & The Internet

You may not know that soap operas are called soap operas because they were originally created as a way to sell more soap.  Putting a quality drama on television during the day is a great way to get peoples' attention.  Sprinkle in some ads for soap and you have a pretty nice business model.  This is what's known as the "interruption-based" advertising model.  The viewer shows up to watch a drama and gets interrupted every 10 or 15 minutes with profitable ads.

Many of the top internet companies are beginning to look a lot like soap operas.

Facebook is covered with irrelevant display ads and requires you to install all kinds of apps to work effectively.

Irrelevant advertisements have started to pop up in my Twitter feed.

LinkedIn has gone from a super clean site to a mess.

Spotify and Pandora ads are poorly targeted and happen too frequently.

Don’t get me wrong.  I recognize that these are businesses that need to generate revenue and I have no problem with them doing so.  I guess I’m just a bit disappointed that as internet companies have evolved into real businesses, they’ve defaulted to old fashioned disruptive marketing to make money. Each of the companies above have built great products and innovated significantly.  You can't say the same about their business models. 

Transactional Differences Between B2B and B2C

Recently I heard a quote from Steve Jobs about B2B businesses.  He pointed out that one of his favorite things about working at Apple was that, in some ways, his job was easy.  All he had to do was create amazing products and eventually consumers would buy them.  This, he noted, isn’t necessarily true in a B2B environment.

It’s an interesting and important insight.  To sell an iPhone, all Apple has to do is build it, put it on its website or in a retail store and an independent actor with full decision making authority will come to the store, give the cashier their credit card and make the purchase.

Imagine the same scenario in a B2B environment.  Apple makes the same great product, but there are a multitude of differences that make the actual sale dramatically more complex.  In a B2B environment before a simple transaction can happen, the following things must happen first.  The buyer needs to:

  • Be sure they’re not already buying iPhones (in a big company it’s possible that the buyer doesn’t know)
  • Assign a procurement team to survey a variety of teams within the organization on what features are most important to them in a smart phone
  • Prioritize those features
  • Build a framework for valuing smartphones
  • Review that framework with multiple teams
  • Research other smartphones to see if there’s a better option
  • Potentially request a proposal from those other options
  • Determine a budget for smartphones
  • Negotiate pricing with the vendor
  • Once a decision is made to go with the vendor, they must get buy in from multiple groups and multiple levels (this is where its more about emotion than process, any person at any level could stop the deal based on their own whims)
  • Check vendor references
  • Write up an agreement with the vendor
  • Have legal team review the agreement
  • Negotiate legal and business terms with the vendor
  • Circulate negotiated agreement among senior managers and executives
  • Request sign off from the appropriate executive
  • Get sign off from appropriate executive
  • Issue purchase order
  • Receive and process invoice
  • Pay invoice based on negotiated terms

Finally, if Apple is able to get through all of these obstacles, they’ll finally get a check.  These transactional differences illustrate why a super strong sales team can be a true competitive advantage for B2B businesses.

Mastering the Complex Sale

I just finished Jeff Thull's bestselling book, Mastering the Complex Sale

I highly recommend it for individuals focused on complex and exploratory sales.  It gives some excellent perspective.  It points out that there have been three key phases in selling over the years. 

Era 1: Cold Calling, Presenting Your Features (me, me, me), Answering Objections

Era 2: Consultative Selling: Asking questions that lead the prospect down a path into your solution

The third era, and the one that Thull promotes, is around truly understanding a prospect's business and key business process and to diagnose problems and their impact.  Much like a doctor, Thull encourages you to spend time asking questions to determine whether the patient (prospect) has a problem at all and what is its impact.  Only after you and the prospect have a detailed understanding of the problem and the impact can you discuss a solution.  And in many cases, you may find that the prospect doesn’t have a problem or it isn’t a material problem, and you should walk away.  Just like a doctor wouldn’t operate on someone that didn’t need an operation, you shouldn't make a sale if there isn't a problem.  

Here were some of the key insights I took away from the book.  

  • Don’t present.  Always have one foot out the door.
  • You don’t want a decision on the solution, you want a decision on the problem
  • There’s no such thing as a decision maker – there are multiple people involved in decisions.
  • People make decisions based on emotion (Boeing is based in Chicago because the CEO wants to live in Chicago)
  • There isn’t a decision to buy, there is a decision to change.
  • Credibility comes from asking questions about the prospect's environment or situation that they haven’t thought of themselves.
  • Most prospects have a positive present state, they don’t feel they need to change.
  • Key question: How does the absence of my product manifest itself in my customer?
  • Procurement creates a framework for a decision and they always make the right decision within their own framework.
  • Most salespeople are selling with 90% of their product’s value behind their back because the problem isn't understood by the prospect.
  • Include all costs in your ROI analysis – including the cost of their resources to implement.
  • Talk about your top 3 pieces of value, but know all of them.
  • When diagnosing, get to the people that are closest to the data.
  • Don’t be a person that makes a sale, be a person that transforms your client’s company.
  • Take the customer backwards to get them to move faster, focus on the problem.
  • Don’t focus on bringing the prospect a positive future – a positive future implies they’re incompetent now.
  • Good salespeople mention the side effects or potential negatives of their solutions (like a doctor).
  • Don’t get emotionally involved, always be leaving.
  • If you can’t quantify the cost of the prospect's problem then there is no problem.
  • The decision to change is made during the diagnosis of the problem.
  • Don’t talk about your value proposition, talk about value hypothesis (e.g. net profit).
  • If you’re feeling pressure during the sales process you’re doing something wrong.
  • Go for the no.
  • Crisis drives change.
  • You cannot sell a group.
  • Find out out who owns the business metric that is impacted by your product and work with them to diagnose.
  • The hardest part of a psychiatrist’s job is getting the patient to see that they have a problem.  Same thing for salespeople.
  • When reaching out to someone cold, be sure that the message you send could not have been sent to anyone else in the world.
  • When a prospect goes cold, use the rule of two to give them the opportunity to tell you the truth.  “When I don’t hear back from someone it’s usually for one of  two reasons: 1.) they’re really interested in moving forward but they have some legwork to do internally to get the pieces in place or 2.) they’re really just not interested.  Either one is fine of course.  Which one is the case here?”