Strong Opinions @marksbirch

Random thoughts from a NYC entrepreneur and investor about start-ups, technology and the people that make it all happen. Also find time for good tunes and good food.
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Superior sales and distribution can create monopoly, even without product differentiation. The converse is not true.

Zero to One: Notes on Startups or How to Build the Future by Peter Thiel via Tom Tunguz

This was a snippet from Tom’s blog post.  Lean Startup and the startup world often say product wins and discount the value of marketing and sales.  But in fact history has shown us that the best product does not necessarily win, it is the company with the best execution to take the market that wins.  If you want to dominate a market, create a superior sales and marketing engine.  The product will get there, but do not wait for the product to be “ready” or good enough.

No amount of process, people, or product will help if the messaging is not working

Good messaging is like good art; it is hard to define but you know it when you see it. And like art, it can be hit or miss, and more often on the miss side when it comes to early startups. Many folks attribute those startups that start getting traction and achieve scale as being startups that found product-market fit. While that is true, what got them there was the right message which is the crux of finding one’s product-market fit.

Ultimately you are creating a clear explanation as to what your company is and what problem it solves for the market. You unlock that riddle and you will find that you open a lot of doors. In that sense, your sales messaging is the master key for your particular market that works for the segments you have defined.

How does this differ from marketing messaging? It shouldn’t, at least by much. Marketing however has a much broader audience to reach out to, which includes partners, analysts, investors, competitors, industry groups, and even customers and broader market. They are the catch all and so they are coming from messaging at a brand level.

Most of what marketing creates should still align with what sales does, but sales are focused on one audience only; prospects. So the messaging needs to be crisp, clean, and jargon free. The point is that anything that creates questions or concerns or roadblocks in the minds of prospects should be removed, and that includes messaging that could likely confuse potential customers.

Messaging is such an important topic that I made the next NYC Enterprise Sales Meetup all about that one thing. It will be a panel of sales and marketing experts in the B2B enterprise market talking about and sharing their thoughts and tips for crafting great messaging. If you are struggling with or have questions about how to craft messaging or what you even say to prospects to get their attention, then this meetup at Work-Bench on Tuesday, September 23 6 PM is for you.

Before I close out this post though, I thought I would jot down a few thoughts of my own since I am going through the same challenges now with my startup. Here are some things to consider:

  • Who are you trying to reach? Messaging is not some monolithic, one-size-fits all thing. You need to understand who you are reaching out to buying creating buyer personas and then targeting your messaging to fit that persona. If you neglect to personalize your message, you risk alienating the every audience you are reaching out to.
  • Is the messaging crisp? Like a good elevator pitch, the messaging needs to be easy to say, easy to understand, and short. Drag on and on, it makes your company and product look unfocused. Note that this does not mean you should adopt the “we are X for Y) format many startups utilize which sounds pithy and undermines your unique value.
  • Is marketing and sales aligned on messaging? Often these groups are working at cross-purposes, which causes marketing and sales efforts to appear disjointed. This creates questions in the mind of prospects as to what you offer, creating unnecessary friction in the sales cycle. It is critical that sales and marketing are working together as one united front.
  • Is the message too ambiguous? The best messaging strikes to the heart of what a company does and is offering. If the messaging is too broad or too “inside the studio” then you are forcing people to dig. In an age when attention spans are getting shorter, expecting people to dig for more is a bad assumption.
  • Is your messaging too complex? In the attempt to appear novel and cutting edge, sometimes we fall victim to being too smart for our own goods. The result is messaging that confuses prospects. The effect compounds at every stage of the sale, lengthening the time it takes to explain and educate prospects. Do not try to be fancy! Stick with plain language and remove the jargon which creates barriers.
  • Is the message unique and defensible? The opposite problem of complex messaging is reducing it to something so basic that it does not sound all the unique. For example, simply calling yourself a recruiting platform or a CRM tool may be simple, but it does not get across why your offering might be better than other options in the market.
  • Is it the very best messaging? You may think you have come upon the winning ticket, but you might be missing out on an even better message. Never be afraid of testing new messaging and trying new ideas to stay fresh. To that end, always be testing across your various outreach channels to see what is most effective. That also means you need to incorporate a metrics driven approach.
  • Is your messaging too static? Markets, customers, and products are constantly evolving at faster cycles, so the messaging should also evolve. Messaging need to needs to be relevant and timely, so make sure that you are reviewing the messaging on a regular basis.
  • What are customers and prospects saying? We often forget to take notice of how our customers describe the company and the products, or what transpires in conversations with prospects. Make sure to capture that information from the field and see if it aligns to your core messaging. Chances are the way they are explaining things might be more relevant to your target audience.
Life’s real failure is when you do not realize how close you were to success when you gave up.
Thomas Edison
Never allow a person to tell you no who doesn’t have the power to say yes.

Eleanor Roosevelt (via kennyherman)

Too many sales deals die a premature death due to gatekeepers, tire kickers, and others that have little power in the organization.  Do not let them get in your way and find the right people, those that have the power to make the deal happen.

NYC Enterprise Sales Meetup

The first event for the newly launched NYC Enterprise Sales Meetup went way better than expected!  Free events are tricky to gauge when it comes to RSVP’s, but that evening over 75 sales folks attended and out of 90 sign ups.  The first panel topic “Your First Five Customers”  garnered some great discussion by our five panelists and moderated by Jake Dunlap of Skaled.  It was great to hear each panelist candidly share their experiences in finding and driving home those first enterprise deals for their early startups.

We have to sincerely thank our panelists for being so generous with their time and insights:

We also have to thank our sponsors, Work-Bench, who provided the space and Enhatch, who sponsored the food and snacks.

Come join us for the next event in September on ‘Creating “Sales Effective” Sales Messaging’.  It will  be a panel discussion talking about how one takes a marketing message and transforms it into something that gets buyers interested.

Full house for our first ever NYC Enterprise Sales Meetup last night! Thanks for everyone that helped out and that attended. (at Work-Bench)

I was planning on writing something that helped break out the differences between the elevator pitch, the unique selling propositions (USP’s) and value propositions.  Then I came across the exact same post written last year by sales guru Jill Konrath, which is pretty solid, so I am reposting here in its entirety down below.

One key point here is the difference between a USP and a Value Prop, which most times confuses folks.  When you are selling B2B enterprise solutions, USP’s are the equivalent of check box items in an product evaluation.  Sure, they help “differentiate” from the crowd, but at the feature level and without any context.  Just because something is different does not mean it is better for the prospect.  That is why Jill states that USP’s provide little value in the B2B sales campaign.

The Value Proposition is much more useful in the early sales cycle, because it hits upon results and gets closer to the perspective of the customer.  Having hard numbers helps, but not absolutely necessary, particularly when you are still early in the product development cycle and return on investment (ROI) is difficult to measure.  The point though is that a good value proposition should be relevant to the prospect’s need and demonstrate the type of upside that makes your solution a worthwhile investment.

Without a strong value proposition, it’s much harder to sell your products or services in today’s economy, much less even get in the door of big companies. But what is a value proposition? And how is it different from other commonly used terms?

A value proposition is often confused with an “Elevator Speech” or a “Unique Selling Proposition.” It’s essential to understand the difference between these terms because their purposes and sales impact are very different.

Elevator Speech

An elevator speech is a short, 1-2 sentence statement that defines who you work with (target market) and the general area in which you help them.

About 10 seconds long, it’s used primarily at networking events to attract potential clients and stimulate discussion. The following elevator speeches show you how some people describe what they do:

  • “I work with small businesses who are struggling to sell their products or services into large corporate accounts.”
  • “We help technology companies effectively use their customer information to drive repeat sales.”
  • “I help small-to-medium sized manufacturing companies who have difficulties with unpredictable revenue streams.”

Unique Selling Proposition

A unique selling proposition (USP) is a statement about what makes you and your company different from other vendors.

Its primary value is to create competitive differentiation. A USP is often used in marketing materials or in talking with customers who are ready to buy.

Here are a few good USP examples:

  • We specialize in working with financial institutions. (Specialty)
  • We guarantee service in 4 hours or your money back. (Guarantee)
  • We use a unique tool called SureFire! to analyze your critical needs. (Methodology)

Helping customers understand your USP is imperative when they’ve already decided to make a purchase decision. But USPs have absolutely no impact when customers are satisfied with their situation or when they’re frustrated but haven’t yet decided to change. USPs are far more effective in the business-to-consumer market than in business-to-business sales.

Value Proposition

A value proposition is a clear statement of the tangible results a customer gets from using your products or services. 

A strong value proposition is specific, often citing numbers or percentages. It may include a quick synopsis of your work with similar customers as a proof source and demonstration of your capability. Here are a couple examples to stimulate your thinking:

  • “We help large companies reduce the cost of their employee benefits programs without impacting benefit levels. With the spiraling costs of health care today, this is a critical issue for most businesses. One of our recent clients, a large manufacturing company similar to yours, was struggling with how to reduce spending in this area. We saved them over $800,000 in just six months. Plus, they didn’t cut any services to their employees, nor did their employees have to pay more.”
  • “I help technology companies who are launching an important new product into the marketplace – and need it to be successful to achieve their sales forecast. Where I help my clients is in the often dropped hand-off between marketing and sales. As a result, they’re able to more easily meet projected sales goals and significantly shorten time-to-profitability.”

Both the elevator speech and the USP are cousins of the value proposition, but there is one vital difference: they lack the punch of a value proposition when selling to the corporate market.

Announcing the NYC Enterprise Sales Meetup

If you are an enterprise sales rep, where do you go to meet with peers, learn new techniques, or share your experiences?  If you peruse Meetup.com, you can find plenty of groups around NYC to join that are nominally in the sphere of sales.  The problem is that many of these groups were either networking centric ,were too unfocused in trying to cover everything sales, or were too narrow in their focus on a niche subset of sales.

Another thing I noticed, especially now that I am once again leading the sales charge, is the dearth of knowledge and experience in the area of enterprise sales.  This is particularly acute for technology startups, but also applies across the board.  For most people that enter sales, the training is on the job.

It is for these reasons that I launched the NYC Enterprise Sales Meetup with the help of two of my friends and rock star sales professionals, Mike Pierce and Jeremy Baksht.  The idea is to have a community for people dedicated to enterprise sales, whether they are considering a job in sales, just starting out in their career, or they are a long time professional with decades of success.

The focus of the group will be learning and networking.  Our community will be a place where people can learn new techniques and tools, sharpen their skills, share their experiences, educate their peers, and grow their professional network.  While our energy will be on hosting our monthly in person events featuring guest speakers and panelists, our goal is to expand the opportunities to network, to contribute, and to build an online body of knowledge on the topic of enterprise sales.  As we are truly committed to building a community, we also want to get your input and hear your ideas for programming that you want that could benefit the group.

I encourage you to join our group if you are involved in enterprise sales or exploring opportunities to enter the field.  I would even say startup founders, whether business or technology oriented, should join us given how it is often one or more of the founders that wears the sales hat early on to secure those first few customers.  In fact, our very first panel discussion is on the topic of closing those first big deals called “Your First Five Customers”.

The first event is Tuesday, August 19th starting at 6 PM in the enterprise tech accelerator space Work-Bench on 110 Fifth Avenue.  Please do sign up for the group and even though our August event is full, I will be opening up some more spots shortly.  I look forward to seeing you next week!

Everyone has that picture in their head of the prototypical sales rep. Not the used car salesman image, but the one of the über successful sales person. Tall good looking, outgoing, and probably athletic. Of course, having known many sales people over the years, the reality is there are all shapes and sizes and personalities. The only commonality that ties sales people together is an unhealthy appetite for accepting rejection and an incredible well of persistence. Otherwise, most sales people are all over the map.

Recently Jason Lemkin of EchoSign fame came to NYC to spend some time meeting with various SaaS startups founders. He also gave a few talks which I was grateful to have the opportunity to attend. One of the reoccurring themes I picked up from his talks was the idea of hiring athletes whether to manage product or to run sales.

Now you might think that hiring athletes seems to be a bit of stretch. Let’s face it, many folks in tech do not exactly hue to the ideal of being athletic. Besides what does being an “athlete” have to do with closing long and complex deals for nascent innovations offered by startups? Well, not much because if experience is any guide, one’s ability to do triathlons or bench press stacks of weights does not translate to quote killing, sales comp smashing performance.

image

However, I look at the comment in another way. It is not about the physical body, but the mental ability. The athlete has intense focus and discipline. The athlete has clear and specific objectives. The athlete is results driven. The athlete is relentless in improving and iterating and practicing. The athlete does not back down from the challenge, but instead tackles it head on.

That is the model of the modern sales rep. In a day and age when building chummy relationships and getting by purely from one’s network are gone, there needs to be a better way for sales people to succeed. It is not by being the classic relationship builder and simply working hard only goes so far. Running purely on gut feel is too high risk in high stakes sales opportunities. On the other hand though, being too data oriented and detailed can stifle the initiative and creativity needed to break into new accounts.

The new model of sales is the idea of being a “challenger”. This is not meant in a confrontational way, but as a way of introducing new ideas that changes the perspective of the prospective client. Those new ideas are novel and contrary to industry currents, are pertinent to the audience being pitched, and are always tied back to value. In short, the sales person better be well prepared long before introducing themselves to the potential customer.

What is responsible for spawning this different approach to sales? It is mostly a function of greater information available to customers through analysts and Internet sources as well as the growing complexity of enterprises themselves. This has created better educated customers that are both in control of the sales process and have higher expectations of the vendor sales teams.

So the type of sales people you need are athletes, but the mentally tough kind that have the discipline and perseverance to succeed. Sales is the toughest of jobs in a company which is why it is the highest paid position, but also the one with greatest turnover. It is no mistake that many famous quotes by athletes work so well in a sales context like this one from Michael Jordan:

I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, >I’ve been trusted to take the game winning shot and missed. I’ve failed over and over >and over again in my life. And that is why I succeed.

That could be any sales rep that is prospecting, hitting the streets, and banging on doors. It is drudgery and thankless and often humiliating. It is not a job that one takes if you need instant gratification or to be always liked. You wear rejection nearly every single day and it is enough to wear out the most seasoned professional. And that it why it is so crucial to hire the “athletes”, the ones that can push through the down periods to get to the high points.

One note before closing however on the physical side of being an athlete. Many sales people forget that they not only have a sales quota to smash, but they also have their bodies to care for. This is something that I have personally been negligent of since jumping back to the entrepreneur side. It is easy to push things too far to the point of causing serious harm to one’s health. Unlike money or relationships, your health is not something you can ever get back.

The best athletes recognize the importance of balance between pushing oneself hard and rest. The best sales people understand the need for hard work but to also get adequate rest with interspersed with down time in order to rejuvenate. If it is good enough for top athletes, then it is good enough for any sales person.

Never Try to Sell a Meteor to a Dinosaur

Kind of how what enterprise sales feels like sometimes.  Lots of dinosaurs thinking you are selling meteors.