The Sales Law Of Conservation

A year or so ago I was at a meeting of NETSEA (New England Technology Sales Executives Association).  The topic was on B2B sales optimization – a key topic in this time of uncertainty.  At one point the conversation turned to an old and true topic — managing the mix of great, merely good, and lame sales reps that you find in most sales organizations. What was stunning to me was that this group of sales managers were rehashing a conversation that has been had over and over again.  It comes down to a fairly simple proposition.

A very few reps will thoroughly thrash the rest of the team on a performance basis.  In a smaller team it may be one rep – always 200% to 400% of quota, year-in/year-out.  You don’t “manage” these gems.  You get them whatever resources they need, when they ask, and you make sure that they get paid.  You ensure that they get the recognition of the CEO and that they get lots of face time with the other leaders in the organization as needed.  You only reign them in if they become disruptive to the organization and negatively impact the performance of others on the team.  Otherwise, you cultivate them and give them the run they need to get the job done.

The solid performers — 90% to 150% of quota consistently — you manage (I won’t go into detail).   The laggards are always there – never getting much beyond 70-80% of quota (or worse).  No matter how well you recruit, somebody has to be at the bottom.  They just lack the necessary sense to put the focus and effort in the right place.  A big mistake many sales managers make is to put a lot of effort into moving the laggards into the middle.  It can be done with some of these people, but the effort is usually pretty high for what is generally a small reward.

One person commented that when they fire an under-performing rep they often give the pipeline to the stars to qualify and close.  I believe this is a mistake.  Not that the stars shouldn’t get the opportunities — it’s just that most of the pipeline of your worst performers is trash.  You don’t want your stars having to waste time re-qualifying deals.   You don’t give the pipeline to your stars – you give them the biggest viable opportunities that really can be closed.   You, or a telesales rep or some other resource needs to weed out the junk first.  And don’t give your middle team the crappy pipeline either.  That’s a quick way to defocus them and help them to miss their quota.

I’ll give you an example.  One of the best reps I ever worked with was that good because he was brutal about where he spent his time.   There were deals with a greater than 0% probability – even greater than 50% – that he outright ignored.  Instead, he focused on the biggest deals with 70% or better (in his mind) close probabilities.  Fewer deals in his pipeline, but bigger on average than all the other reps.  Even if his total factored forecast was below other reps, he rarely didn’t beat them.  It was a great example of the Law of Conservation:  time spent on less important deals cannot be reclaimed, it is just transmuted into less time to spend on the better deals.

The answer was easy to see, but hard to apply.  By ignoring many “good” deals and focusing solely on a few “great” deals, he was able to spend far more effort on the deals he pursued – and he won most of them.

This is hard to teach or to get most reps to do.  Any deal with a pulse often gets attention, which makes it less likely that other deals will get the attention necessary to win them.  We all feel we can cover lots of deals and make them work.  The simple fact is that the general rule against being spread to thinly is critical to sales success, but often overlooked.  Filling the pipeline with lots of crap gets your manager off your back – and it should be the opposite.  A big pipeline with lots of deals, where each is a complex sales environment, should be a red flag.  It’s a zero sum game because there are only so many hours in a day.  Time cannot be created – it can only be applied.  Applying time to crappy deals just leaves less time for better deals.

The Sales Law of Conservation:  time cannot be created or destroyed, only transferred between competing priorities.  Improving the quality of your pipeline by finding the best deals and working them more is preferrable to finding more deals and working them less.

A Superb Company Culture

A couple of years ago I went to a reunion celebrating the 20th anniversary of the founding of Object Design, Inc. (now part of Progress Software).  I joined ODI as an intern in 1991 while at Babson because a friend at The Weber Group (Larry Weber’s PR firm from the 90′s) told me I should take a job there scrubbing the toilets if I had to because it was such an amazing company.  I only had to work in the mail room, (no, I’m not joking – I literally stuffed and mailed out collateral) but I got my high-tech start there and left in 1996 after product managing the launch of the ObjectStore ODBMS for Windows.

ODI, as we called it, was a rare company.  The intellectual talent across the company was as good as you’ll ever find (and I’ve yet to find since).  Any one of the engineers at ODI would be the “guru” at 99.9% of other software companies out there.  The stuff they did was just mind-numbingly great.

More importantly, the culture there was just as amazing.  People would go out of their way to help each other be successful.  The sales people and engineers and marketers all worked together to build a great business.  While the management team was part of that, the culture at ODI was more from the bottom up than top down.  You saw it in the hallways, when people went into their colleagues’ offices (we all had offices – very few were in cubes and often just temporarily), and in the lunch room.  Nobody was disrespected, and very few honest disagreements turned acrimonious.

The culture stayed that way until just after ODI was named as #1 on the INC 500 list of fastest growing private companies.  Oracle offered $100M or so to buy the company, but the management team turned it down (I was not on the mgt team).  We were going to crush Oracle, certainly!  Oh, the arrogance.  You know what happened next… we started missing our quarterly numbers.  Eventually the investors took over and kicked out the old management team, cut salaries and let go a good portion of the company.  The culture was gone then, but not forgotten.

Looking around that night I saw many familiar faces.  Sure, we all looked a bit older, but most were still looking great after all this time.  Funny how all of our stories to each other last night were about all the good times… the big early deals, the technical breakthroughs, the demos at OOPSLA, etc.  A lot of people came out last night – more than I expected.  One of the ODI Germany sales guys even tried to find a flight in but couldn’t afford the 1,000 Euro airfare from Frankfurt.

The number one refrain I heard was how nobody had landed somewhere that special again in their careers.  Someday I hope to be in a situation where I’m surrounded by so many awesomely talented and truly great individuals.

Enterprise Cloud Computing – We’ve Only Just Begun!

 cloudWay back in 2006 when Amazon released their first enterprise web service, S3 (Simple Storage Service), I immediately wanted in. At the time we were wracking up huge data center and hardware bills (for a small company) and storing tens of terabytes of image files. We got in the S3 early beta but didn’t get too far because we needed image processing to happen in the cloud to be cost-effective.  My contact at Amazon hinted that a compute infrastructure was not long in coming.

When EC2 (Elastic Compute Cloud) launched in 2007, I really wanted in. The digital photo business was winding down, so there was no point.  My 2008 venture, did use EC2 and S3 and we saved many thousands of dollars and hours by not having to worry about hardware. While there were countless stories of Web startups using cloud services back then, only recently have I begun to hear of enterprise applications in the cloud.

I know what you’re thinking.  What about SaaS vendors like Salesforce.com with their PaaS (platform as a service) models?  Yes, these are in the cloud, and fit in most people’s definition of “cloud computing.”  However, for me the inflection is where enterprises are now deploying any type of application, not just those that are build as ASP or SaaS frameworks, or that require you to build into a narrow framework like sforce.   Truly custom apps written in any language are not what sforce was designed for.

Now I am hearing about life sciences companies putting the cloud to work in HPC environments for drug discovery or genetic mapping. And trading firms, like Majedie Asset Management, who own or manage no physical data center assets.  All of their applications – from the most trivial to the most mission-critical – live in the cloud.

There are tools providers like RightScale and  Stax building deployment management environments on top of Amazon and other cloud infrastutures.  There are folks like Enomaly building cloud stacks for deployment by telcos and hosting providers.  There are guys likeGood Data building BI in the cloud.  

Think of the opportunity!  Over the next 10-15 years millions of systems now operated in-house will be ported to the cloud.  An increasing number of new applications will be built specifically for cloud environments.  Vendors of systems management, security, indentity and access control, databases, ERP, CRM, and most other types of IT technology will create cloud versions of their systems, and new vendors will emerge for this new environment.  

There will be opportunities across all aspects of enterprise IT to profit from this wholesale shift.  How will you participate?

Twitter and The Hive Mind – Assimilation is Good!

Twitter The BorgWe’ve all heard the concept of the hive mind, where when one member/node/bee/ant etc. knows something it gets transmitted instantly throughout the hive. The Borg from Star Trek is the hive made evil, with no free will.

Twitter behavior is starting to look more and more like a benign hive, where participants have free will but often willingly join in collective behavior.  A recent example of this came from Demi Moore (twitter user “mrskutcher“) who saw a tweet from someone in San Jose who said she was going to kill herself.  Demi re-tweeted one of these horrible tweets from sandieguy and the collective jumped into action.  The San Jose police were contacted.   Hundreds of Twitter users sent supportive messages (a few a-holes were mean), and we all hope that the crisis was averted and @sandieguy is getting the help she needs.

This is only the beginning.  Imagine as tweeting gets even easier, and more pervasive.  The ability to mobilize the hive mind to deal with a crisis, inform the world, solve problems, generate action and more is only going to get more powerful.  

A collective/hive mind can be powerfully negative as well.  Imagine at some point a Rush Limbaugh-like personality who uses Twitter to mobilize hate and fear-mongering in a way that is destructive.  Imagine Hitler with a Twitter account (no, I’m not comparing Rush to Hitler).  Scary, though perhaps if there was a Twitter in the 1930′s Hitler may never have been able to go so far.  Maybe the benign, voluntary, and informed collective would have forced a quicker response to the threat.  

For marketers, this collective mind is a huge opportunity – and an even larger threat.  Never has it been so easy to inform a huge community of influencers about your experience with a product or service.  We all know that people are much more likely to complain than to compliment, so downside risks from the hive will impact more brands than upside.  A strange trend, though, is that my informal scan of the environment shows that there are a LOT of positive tweets about brands.  Perhaps this is because collective participation is so easy and immediate – it takes only a few seconds to tweet about that great customer service you just got, so why not?  If you’re not following your brand on Twitter, you are missing a huge opportunity.  Someone talks you up?  Reward them!!  Someone puts your brand down?  Make it better and win them back – instantly.  They’ll tweet about how impressed they are with your attention. 

One brand that gets the collective is Zappos.  Tony Hsieh (CEO) follows most of his followers, and he probably has a whole team dedicated to tracking the conversations about his incredible service.  There are over 350,000 people who follow his tweets.  Most are huge fans and never miss an opportunity to say so. 

For good or for evil, the global collective mind is here – and it’s growing.   Resistance is futile – assimilation has begun!

Marketing the Presidency

Open for Questions

Yesterday a post from Barack Obama appeared on my Facebook feed.  It was about the Open for Questions system on Whitehouse.gov.  The Open for Questions application allows anybody to register and vote up or down on questions related to the economy, health care, security and other topics of interest.  You can also ask your own questions.  On Thursday (tomorrow), President Obama will answer some of the most popular questions in a town hall setting.

Open for Questions 2

It cannot be overstated how innovative and powerful this concept is.  The established model is that you communicate your wishes and concerns to your elected representatives in Congress, and they’re supposed to advocate for their voters.  Of course, nobody trusts these (mostly) guys to listen or to do anything other than what’s in their own interests – which are often not in alignment with the voters who elected them.  Plus – to get your voice heard you need to get to three members of Congress who may or may not have a great and responsive staff.

Obama just bypasses Congress to gather the Will of the People on a national level, and uses highly viral social media to do it (bypassing old media as well).  He can then look at the results -  and with the support of hundreds of thousands or even millions of votes and voters he can steer the discussion with far more legitimacy.  By letting us in, he’s binding himself to the people.  By giving us voice, he’s removing the filters and communication blockages that occur with any leader.  Obama describes the presidency as a “bubble.”  When you’re in the bubble, you can’t know that people are thinking or feeling.

Open for Questions is a powerful way to burst the bubble and get close to the voters — his customers.  Sure, this makes for good policy – but this is mostly about marketing.  His supporters love him even more for his openness and proof that he “gets” the social graph and why that matters.  Even his detractors have to stop and admire the openness and leveraging of new media, and some of them will – perhaps grudgingly – grow closer to Obama’s view of the world.

What are you doing to listen to your customers?  Are you using social media to bypass the filters from sales, marketing and customer service that make it difficult to know what your customers are really thinking?

B2B Websites – Now Comes the Hard Part

Many hours are spent on building the best website for the money.  We think about site structure, content, look and feel and other elements to the design and delivery of the site.  As much work as it may be to get this new beauty out the door, it’s just the start.

There was one client I worked with a while ago who wanted a new website.  We discussed where there business was coming from, how they wanted it to grow, and the types of clients they wanted to attract.  Once we had an idea of what the site should say, I tried to engage this client in a discussion about how they were going to get people to see it.  If a tree falls in the woods and nobody hears it… Well, you get the picture.

Let’s make something clear – their monthly unique visitor count is in the low hundreds.  Very low hundreds.  Most of the inquiries they get from their site are related to a service that they have listed but they don’t perform anymore.   The website was actually worse than nothing – it was costing them time and effort to respond to these unwanted inquiries.

When I tried to steer the conversation towards marketing, the client looked at me like I was from Mars.  The site was their marketing, right?  At least that’s what they thought.  Even in B2B, many people get to a vendor or service provider site through search.  Or ads, or PR, or some form of marketing activity.

They were willing to spend $ on redoing their site, but nothing on marketing it so people would visit.

Folks, it’s simple.  The website is a tool – it’s not the marketing plan.  The really hard part is driving traffic to the tool to start them down the sales funnel.  And programs that work for one company may not apply to yours.  So, you need to have a comprehensive plan to test different marketing vehicles — and this can be done without spending a lot on the programs.

Would paid search yield results?

What about SEO?  Is the content relevant, current, and do you have people linking to you?

Do you post your own blog?

Do you have lots of great referenceable clients and can you post their stories on your site and alert a bunch of bloggers who may care about them?  Not just in your industry, but in theirs?

Can you showcase your talents by making something interesting for people – like a microsite on something with interest in your target audience?

You don’t need to have  a huge budget these days to generate traffic.  Note – for this client, a few hundred more visits by people who are interested in their offerings could result in a big jump in business for them.

Bozeman Explosion – The Twitter Effect

A few minutes ago my cousin’s wife updated her Facebook status looking for updates on the explosion this morning in Bozeman.  They live in Livingston, MT.  Their radio and TV stations did not have anything.

I did like many others and went right to Twitter Search to get the update.  Found a Livingston radio call-in show and am listening live now.  It’s amazing how once again the people are way ahead of the media.   I hope that the current status of no injuries or fatalities stays that way.

Services Marketing is Harder Than Product Marketing

I have recently done work for a couple of IT services firms.  One in NY and the other in Cambridge, MA.  As a guy who has primarily been involved in product organizations over the years, the marketing challenges of services businesses were harder than I expected.  Really – products are way easier to market than services.

The explanation is fairly simple – competition and differentiation

First, the competition for services is way more intense than for products.  How many vendors of a specific type of technology can you find?  In some product markets there are less than ten viable competitors.  Like CRM or DBMS or Internet Banking – there are not that many credible vendors.  Same is true for any goods you buy — be it electronics, autos, etc.   But services – wow!  There are hundreds of Web development shops in Greater Boston, and tens of thousands nationally.   IT outsourcing may have some big names like Infosys, Accenture and Wipro.  But there are several hundred firms of reasonable size outsourcing to India.  Think of all of the law firms, doctors, dentists, advertising agencies and the like.   So, I think you can make the point that services are, to a great extent, more competitively intense than products.  That’s because it’s fundamentally easier to launch a services company.  Just start signing up clients and you’re in business.  Products take time to develop and bring to market.  That means capital, which means fewer entrants.

The next issue is differentiation.  Now, I can differentiate myself from the next guy.  But when there are a hundred or thousand people in a firm with widely diverse backgrounds and capabilities, how can you differentiate them from the other companies with their merged hoards of people?  Some firms, liked Goldman Sachs, are known to attract the very best and brightest.  But in your average Indian outsourcing shop, how can you – the buyer – really understand how one group of people may be better for you than the next?  And what about in two years when some of those people are at another shop and you’re working with new people?

That’s where you have to start thinking more like a consumer branding guru than a product person.  Now you’re into the realm of true marketeers – where it’s not the feeds and speeds, features and wizbangs that get you noticed.  Positioning must, by definition, be far more emotional and conceptual.

Look at Accenture – their brand is all about “performance.”  Sure, you don’t have millions to put Tiger Woods into your ads, but Tiger’s just an image that goes with the positioning statement.  What you don’t see them leading with is anything about their people being the smartest or most capable.  In reality, they are not.  Accenture has plenty of good people, but they are not on par with the tech folks at Google or the folks that worked at CTP and Sapient in their haydays.

Marketing of services is really about marketing the outcome.  With Accenture the outcome is business performance.  With IBM it’s innovation.  With Infosys it’s about winning in the “flat world” – which means being global to win globally.

Most services companies don’t do this well.  They describe what they do – not what they cause.

Your Corporate Website Stinks… Now what?

So many times I go to look up a company and take a run through their website to get an idea of who they are and what they do.  More often than not I am thoroughly underwhelmed.  It’s not for lack of effort – many of the worst sites I’ve visited were professionally produced with good design and graphics.  Hey, they look like real companies.  Most of the time what sucks is the content.  The content is well written, in the sense of grammar and editing, but after about 2 minutes I’m practically begging for mercy.    What’s my problem?

First, if I read one more absolutely worthless line like “we leverage our unique capabilities to drive strategic value for our global customers” I’m going to go break something…  Really, WTF does that mean??  Your competitors say the same thing, so why not?  That’s precisely the problem.  They all say the same stupid, meaningless and impossible to prove crap.

Oh, but you put it in a CMS with RSS feeds and lots of flash – doesn’t that make it good?  No – sucky content cannot be improved with technology or sizzle.  It still sucks.

My friend recently took on a new career as a counselor at a well-known outplacement firm.  He has learned more about marketing in 2 months than most marketers learn in a lifetime.  Beyond helping with the transition process and giving his clients confidence to move forward, one of the first transformations he can accomplish is with their resumes.  Recruiters and hiring managers don’t respond to stuff you find on most resumes.  Why should your customers respond to the same level of crap on your site in in your collateral and presentations?

The problem with most resumes is that they focus on responsibilities (features) and not on accomplishments (benefits).  Employers want to hire people with impact value.  What was the result of your 10 years with XYZ corp?  So what, you managed this function.  What improvements did you make?  Or, did you fail to move the business forward while it was under your care?  If so – you’re not getting hired by me…

Instead of writing your site like everybody else – how about writing it like a resume?  I can tell you right now that it’s very hard to do this well – but what things of value aren’t hard work??  It starts with a brief (2 sentences, max) summary of who you are.  Then an exploration of your capabilities as told through your accomplishments.  Let me give you an example.

Sybase Trip

I love to give my ex-employer Sybase a hard time because, well, they’re easy…  Anyway, look at what they put in the image to the left This is what shows up on their home page.  And actually this is better than what you find with most companies.  Now, imagine if the what you saw front and center on their home page was the following:

Sybase’s iAnywhere mobile solutions helped McKesson Corporation save millions of dollars by delivering solutions that reduced calls for delivery errors by 97%, eliminated imaging costs, and reduced delivery claims by 30%.  What can Sybase help you achieve?

As a buyer, CEO, business line manager or even technologist, which approach is more powerful?  Which message might make you more interested?

What if all sites were written like resumes with accomplishments front and center, and perhaps a framework of capabilities to show where the successes fit in your strategy?  Then, everybody could easily see that your old, features-oriented and tripe-laden site just plain sucks.

I’d love to give you examples of sites that do this really well, but I have not seen any recently.  Have you?  If  so – let me know.

The Yin of the Yang…

So Jerry Yang has stepped down as CEO of Yahoo! This is no surprise.  Yahoo! has been floundering for quite some time, and Jerry’s much-vaunted return did not have the same results as the Steve Jobs or Michael Dell Parts Deux.

In many ways Yang had a much easier job than either Jobs or Dell, but he still punted it.  Dell hasn’t lit the world on fire, but you don’t see him getting creamed by the press at every turn.  Yang went mano a mano against a carnivorous Steve Ballmer and made just about every wrong move in the book.  Now, I never really understood the MSFT/YHOO merger idea at all anyway.  MSFT really should be focused on the cloud thing as the future of the platform and apps business and let the ad business swirl around them.  Steve’s not listening to me anyway, but my gut tells me Microsoft should extend their value proposition along the lines of strenght.

So, here’s my recommendation for Yahoo!  Hire someone who doesn’t feel inferior about themselves.  Yahoo is arguably the most undervalued property on the web because they are too focused on competitors and not focused enough on customers.

Yahoo search is okay, pouring billions into competing with Google is just stupid.  Yahoo content – with their Sports, Finance and other great properties – is the crown jewel.  Partner for search if needed – and just keep sucking away at whatever value proposition is left in the newspaper business.  Who needs the Boston Globe if Yahoo can get better at local content.

Start with Yahoo! today, add a regional focus much like Craigslist (http://boston.yahoo.com anyone?), and hire local writers and editors to stoke the engine.  Sports, money (perhaps buy the bizjournals.com businesses?), jobs, news, culture, etc.

Yahoo could pwn the Globe and all other regional properties.  They could even use some technology to allow people to create their own “morning paper” that can be assembled into a PDF and printed at home (for those who like to have the paper in their hands).

Okay, Yahoo – hire me for CEO!

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