|
If your weekly sales team meetings look anything at all like the one in this video, you need to contact TopLine Strategies right away!
PS. Many thanks to Michael for playing the role of “Sales Person” in the video.
Tags: crm, CRM application, Productivity, Technology with Methodology, TopLine Strategies
Every once in a while I get to feeling sorry for myself. I see others accomplishing so much and making it look so easy. The very effortlessness by which they make things happen causes me to feel like they might have been born with a set of talents and skills that I don’t have.
But then, as often happens, just the right bit of inspiration came to me at just the right time in the form of a Harvard Business Review article entitled, “Six Keys to Being Excellent at Anything” by Tony Schwartz. In his article, Mr. Schwartz presents evidence that it is “possible to build any given skill or capacity in the same systematic way we do a muscle: push past your comfort zone.”
There is hope for all of us. Click here for more of his article
Tags: Entrepreneur, Planning, Productivity, Sales, Sales Strategy, Technology with Methodology
If one were to ask, what’s CRM? I would say something along the lines of, “CRM is the strategy of leveraging customer and market interactions across an organization to optimize communication and build longer term, more profitable relationships.” Seems pretty complex right? That’s what I thought before I had an opportunity to dive right in and see how it works. I think it’s safe to say that the main people that use a CRM application are not the technical experts that have the working knowledge to apply changes to functionality on the fly. They are unable to install their ideas for workflow enhancements, and find it’s predictably distracting to track down the right IT person and the approving manager who will listen to their suggestions. Seems like too much effort for little reward.
To most sales professionals, CRM is our pen and paper; our hammer and nail. It’s the number one asset we utilize on a daily basis. It’s because we are so reliant on this tool, all of us CRM super-users find opportunities for simple change on a weekly basis that could potentially save the user time — and we all know time is money. These simple changes often times can be applied with ease. Not only will they make users more comfortable with the system, and deliver productivity improvements, but will allow the everyday users and opportunity to take some pride in their handy tool.
Let’s take a look at a few changes we’ve made to our own system and the impact it has made. Granted all the information in a lead or contact’s profile is important, it’s not always visible or available without clicking and opening the profile in its own window. This could be anything from the person’s email address, job title, or status. Many times, especially when there are multiple contacts for an organization, it’s imperative we know their job title in order to know who to try and contact. This information is only available through opening and closing each profile. It was time for a change. Now with job tile as a category that is visible on the main page, we are able to identify the correct contact and stop with the opening and closing of multiple profiles.
Another example of a simple change we’ve implemented involves how we organize some of our contacts. By adding a Categories folder to the Sales tab, we have created a functioning way to organize contacts based upon a specific need. For example, say we want to create an email marketing list, but only with executives in finance. We now can identify these individuals, place them within a database with other finance executives; therefore, making it easier to create an email campaign, conduct follow ups, and revert back to for later use.
To quote from an earlier entry entitled, Sales Enablement: User Acceptance Means More Sales, “The fundamental purpose of a CRM initiative is to drive sales performance and foster profitable customer relationships… If the individual receives value from the CRM system then they will use it. If they don’t, they won’t. Salesperson acceptance is embedded in individual self-interest.” Company-wide acceptance is needed in order for CRM to be fully realized and utilized. In order to drive user acceptance, it’s vital to build a bridge of communication between users and administrators with a goal of creating an easy to navigate system.
In essence, it’s important to understand who uses it. By taking the time to listen to user feedback and suggestions, incremental changes can be implemented. Over
time these changes will not only save time and optimize revenue, they will also provide users with a sense of ownership. It could be beneficial at the next sales meeting to sit down with the CRM users and find out what they think. I’m sure they will all share some thoughts on how an already effective system can become more efficient. Collect and implement 10 of these ideas a month from the user community, and your organization will undoubtedly build longer term and more profitable client relationships.
Tags: CRM application, Sales, Technology with Methodology, Tim Fargo, TopLine Strategies
As leaders do we allow our teams to learn from mistakes? Really?
Where does our learning, our new knowledge come from? The Web, books and other forms of personal development, coaching & mentoring and training all come to mind. However, for me, most learning comes from mistakes I’ve made. By looking at what I might have done differently or better and applying that to the next, similar situation, I have continued to make the improvements I need to continue to evolve and remain competitive.
I am happy with the manner in which I’ve learned from my mistakes. I am not happy; however, with how effectively I’ve helped those on teams I’ve led learn from THEIR mistakes. If I can apply to my team members what I applied personally then there has to be a significant opportunity for team growth and development.
I found the following article, “Forgive and Remember: How a Good Boss Responds to Mistakes” written by Robert I. Sutton. I love his line “failure sucks but instructs.”
To read the rest of the article
The difference between a CRM failure and a CRM implementation that delivers a high return on investment — often comes down to user acceptance. If users don’t enthusiastically embrace CRM, then the initiative may not only fall short of the ROI objective, the entire CRM initiative will surely be at risk. Sales users only embrace a CRM initiative if the toolset delivers to their self-interest — optimizing the productive interaction between the salesperson and the customer/prospect.
The following article by TopLine Strategies CEO, Tim Fargo, provides an insightful checklist for CRM success. Whether you are in the formative stages of a CRM project or wondering how to get your current CRM system on track, I am confident Tim’s article will serve you well.
Sales Enablement: User Acceptance Means More Sales
Industry Perspective | Strategy
To achieve the increases in productivity that lead
to rising revenues, sales force acceptance and usage
of the sales component of a CRM system is crucial.
by Tim Fargo
In many CRM installations, sales automation is installed first, sales personnel are the most dominant user community, and sales performance is the key metric of the CRM initiative’s success. For CRM to succeed, salespeople must use it with enthusiasm.
CRM customers are demanding revamps to their applications to make them substantially more attractive and useful to the field and inside salesperson. The sales representative’s adoption of the CRM system hinges on a system that delivers a sales productivity benefit and a user-friendly interface. To meet the needs of the firm, a CRM system must focus on optimizing the productive interaction between the salesperson and the customer/prospect.
Usability vs. Functionality: First Things First
The fundamental purpose of a CRM initiative is to drive sales performance and foster profitable customer relationships. If the application’s features successfully catalyze the relationship between the account owner and the account, then the CRM system will add value to the company. Functionality is defined as the feature set of any given application. Below are three common sense guidelines when a company is evaluating CRM functionality relative to the likelihood of sales representative adoption:
• Inclusion of hundreds of functions without regard to their probable usage does not produce a more powerful or productive CRM experience.
• Each required function must tie back to an ability to catalyze the relationship between account owner and account.
• What makes a CRM application viable is the usability of important features, not that they exist.
If the individual receives value from the CRM system then they will use it. If they don’t, they won’t. Salesperson acceptance is embedded in individual self-interest. The objective is user acceptance by the largest part of that constituency. Although there is no way that everyone in sales is going to immediately adopt a CRM system. The greatest level of initial penetration will occur if self-interest is addressed effectively.
Understanding Customer Relationships
The specific focus is to catalyze the relationship between the account owners during the various stages of an account’s life-cycle. Interest in sales automation will be peaked for the salesperson if:
• The new tools enable a higher rate of target accounts to be nurtured into opportunities. There has been an increasingly sharp understanding that a customer relationship begins by nurturing a target account into an inquiry, then an opportunity. A good CRM system must have effective structures (i.e. Leads separated from Accounts) and tools that aid this nurturing process from raw lead, to qualified lead, to suspect, to prospect.
• An opportunity is advantaged with tools that aid advancing the prospect thru the cycle. Managing a sale through the stages of a sales cycle is a traditional domain of Sales Force Automation; but forecast reporting to management has been the primary sales cycle function. Forecasting is important, but functions that improve close rates are more important for the sales person. CRM success starts with motivated usage, and motivated usage in turn drives universal adoption. Then adoption along with solid sales process and discipline will leads to an accurate forecast.
• Prospective opportunities within the existing client base are more easily discovered and closed. Most organizations find relationships considerably more profitable after the initial sale. Enhancing opportunity identification within existing accounts, making the offer, and moving the prospect easily to new opportunity management is perhaps the best chance to drive account owner self-interest.
What Are These Changes That Have To Be Made To Sales Force Automation To Make It Useable For Salespeople?
1. Usability
Here are a few known CRM user interface guidelines that have been tested to make a difference for the sales staff:
• A clean, easy-to-use interface
• Is visually appealing
• Has an uncluttered look
• Incorporates big buttons
• Uses clear labels
• Has simple-to-access tab interface
• uses easy drag-and-drop capabilities
• Contains something as simple as a “go back” key
• And provides a “recent records” button
Usability increases odds of sales staff acceptance.
2. Effective Account Management Tools
There is a distinction between a slick technological function and an actually useful account management feature. For example, it is a slick to have customer auto call for one of the Web features, but not necessarily a feature all that frequently used. Here are three features that will make the CRM application a real-time tool:
• Easy lookups on all the fields of an application
• Very robust “speed” search capabilities that allow exploration and discovery
• A salesperson requires the freedom to navigate the system. The application must allow the flexibility to move from account to contact to notes to opportunity to customer service readily without being encumbered by the database structure behind the technology.
3. Easy Integration with Familiar Desktop Applications like Outlook
Over 150 million people are using Outlook and Lotus Notes combined. Easy integration between these applications and the customer-facing CRM application is a fundamental requirement.
4. Seamless Integration with the Back Office
For salespeople to manage an account well it is often necessary to have both accurate knowledge of and timely access to back office activities such as product inventory status, order status, accounts receivable, catalog look-ups, and subscription management. The application should provide:
• Seamless integration with the organization’s back office, legacy and Web systems if these systems house information important to account management or opportunity identification.
• Transparent “back office” access; not requiring the salesperson to leave the familiar environment of the CRM sales automation application.
The less time a salesperson has to “stand in line” for accounting answers and the more direct access the rep has to back-office information, the more time he or she has to sell. Seamless integration is a critical factor in improving salesperson effectiveness. Pre-built integrations to major back-office systems can reduce the time and complexity of integrating to those systems, but can be constrained and limited. To achieve the objective, an application has to have an open environment that supports the integration technology that is most appropriate for the business. Good integration provides access to all meaningful information (timely and accurate), not just some.
5. Adaptable and Flexible Business Processes Capabilities that Fit
Mid-sized businesses and enterprise divisions are unique and so are their business processes. Even companies in the same industry have unique processes they have developed which differentiate them from their competition. A variety of best practices and sustainable business processes are going to be embedded in any CRM application. An extremely important part of making the salesperson comfortable is a CRM system that is adaptable to those unique business processes. What makes the system usable is the degree of flexibility to mold to the organization’s unique sales and business processes. Equally important is the system’s capability to change as the organization grows and acquires new processes.
6. Embedding Sales Methodologies into the Applications is a Qualified Benefit
There are a substantial number of successful sales methodologies that have been part of many a sales toolkit.
Corporations spend thousands of dollars to train their sales personnel in Solution Selling® or Miller Heiman or other prominent methodologies. Many companies even develop their own unique selling methodologies developed over the years of selling in a particular industry.
• A good sales automation application will embed the best and most widely accepted sales methodologies or allow new ones to be easily created.
• The application should give the sales person the means to either access or ignore these methodologies.
• The methodology should discipline forecast-ability — and suggest the close rating of the prospect
For the new salesperson, this is an especially important feature allowing them to conform to a methodology at an early stage of their sales career.
7. Tools that Enhance Interactions with the Customers
Access to your prospects and customers with multiple communications channels makes a huge difference in user comfort levels:
• Web
• phone
• email
• hand-held
• social media (Facebook, LinkedIn, Twitter…)
A CRM system that automatically tracks these important interactions with customers and prospects is essential.
8. High Level of Personalization so that the Individual Salespeople can have a System that is “Them”
Each human has a personality that is his or her own. On the other hand, in a corporation of any substance, it is clear that there needs to be universal business procedures that govern the general method of doing corporate business.
Configurability, or personalization, is the answer. Individual salesperson can incorporate their comfortable quirks and approaches into the system (within limits) without affecting anyone else’s use of the system. A user should be able to create their own:
• Customer and prospect lists,
• Tab structures,
• Sales letters, and
• Even screen colors that fit their own way of being efficient; not a rigid application that enforces its own idea of efficiency on users.
This is not customization, which is traditionally not done by the end user but rather by the IT department.
9. A Highly Mobile Sales Force — Access and Mobility
An effective CRM application will provide today’s highly mobile workforce access in both a connected or disconnected environment, with PDAs, Tablet PCs, and laptops. Mobility is a critical technology that enables users to share up-to-date customer and sales information in the field. Approaches vary widely – as do the amount of success they achieve. Evaluating a solution’s mobility system can help avoid problems that have doomed many CRM projects to failure. The judgment as to which mobility system best meets a particular company’s needs is, of course, a business decision. It must support the overall goals of an organization including providing salespeople with more time to sell and real-time access to customer information, fostering a more efficient sales process, and yielding up-to-the-minute and accurate forecasts.
The mobility system that best meets these needs best serves its users and owners.
10. Comprehensive, interactive business analytics tool Business Analytics can transform your CRM data into actionable information.
An effective business analytics tool puts rich information at your sales force, manager’s and executive’s fingertips; giving you the visibility you need to keep a pulse on key performance indicators and to focus your teams’ efforts on the most effective activities. Sale force analytics provides the ability to:
• Analyze critical business metrics with customizable dashboard views that illustrate your organization’s state-of-health
• Should provide rep and manager: KPIs, Maps, Ranking, Forecast, Win/Loss, Opportunities, Activities, Marketing, Customer Service, and contextual details on a “click”
• Enable fast, reliable business decisions based on accurate and usable information
• Integrated with data security so users will see only the data their security profile allows
• Optimize your human investment with a reporting connection that links up with customer data stores to extend business intelligence — and help monitor changes or trends.
• Leverage seamless integration of customer details from your CRM database.
• Optimal if in separate data repository architected to optimize data load time, but minimize query affects on response time of live CRM environment
11. Tribal Knowledge
With so much useful tactical information in a sales organization, the greatest problem remains access to the critical information when it is needed. Here are five common symptoms that poor access to critical information is affecting sales performance:
• Sales managers spend too much valuable time answering repetitive questions from their team members,
• Sales reps are re-creating similar presentations and proposals
• Crucial new competitive information is never logged
• New product positioning is missed
• Customer references are not reliable and
• Incredibly valuable sales innovations stay locked in the tool-kits of the “eagles.”
Perhaps the most dramatic opportunity to drive sales performance is the availability of “answer on demand” resources for the sales representative. The emerging breed of sales intelligence systems included at least these five categories of advantages:
• The application is operated with common email interfaces and as a result takes little to no time for the sales reps to learn to operate.
• Access to information is highly mobile; the application can be operated from a PDA including Blackberry, a laptop, or cell phone.
• The library not only stores information but rates the information; combining the best attributes of a document library with an Amazon.com-like reader rating system.
• The application supports business incentives to use the tool; providing combinations of innovative incentives, constituent usage statistics, and reminders that motivate field intelligence contribution.
• Delivers the obvious value of anytime/anywhere responsiveness to questions on pricing, availability, objection handling, competition, references, subject-matter expert identification, best of breed proposals and letters, and much more.
Conclusion
Automating the sales organization is almost always the first task of any CRM initiative. Nearly 90 percent of all successful CRM implementations have sales automation installed. Over 90 percent of the CRM users in the mid-sized and enterprise division segment are sales users. Therefore, sales force enablement is a critical outcome to any CRM effort.
The sales enablement value chain works like this:
• First salespeople accept the system; then,
• Sales force productivity increases,
• Finally, sales force productivity drives sustainable sales performance.
Deliver a tool that provides your salespeople value and usability. In return, you will have a system that people actually use, and that is what ultimately benefits the entire organization.
About the author: Tim Fargo has over 30 years experience managing and leading IT organizations that deliver large-scale project management, consulting, commercial application software development, and software and system service. Tim spent over fifteen years as CEO of AIS, Advanced Information Services, and managing partner of its parent corporation. AIS grew from 9MM to $250MM and was sold to a Fortune 500 corporation. While managing SalesLogix, Tim reported directly to Interact Commerce chairman and founder, and recognized software entrepreneur Pat Sullivan. At Interact Commerce, Tim was responsible for all aspects of the CRM product line, including product development, sales, marketing, channel management, professional service, and technical support. During his tenure, SalesLogix led the industry and was rated by Gartner in it’s “Magic Quadrant, and by Destination CRM as the industry’s leading mid-market product. Tim is currently chairman and CEO of AEP LLC’s (AncAla Equity Partners), and it’s subsidiaries, including TopLine Strategies, Top IT Staff, and the Venture Resource Group.
In my business I have the chance to work with all sorts of people with a wide variety of backgrounds, qualifications, cultures, educations and skills. I feel quite fortunate to be able to say that 99.7% of the clients I work with are smart, fair, ethical and decent. I don’t want to appear to be the “glass half empty guy” but I wanted, for a moment, to focus on the “.3%”. Why? Because of the amount of my energy they consume.
I often wonder if, in the process of doing business with these folks, if I have ignored any warning signs that might have allowed me to walk away or to better negotiate specific (pain advoidance) points. I came accross a blog by Steve Nguyen entitled “People with a Situational Value System” in which Mr. Nguyen, using observations from the hospitality industry, points out one of his warning signs- people that treat the wait staff poorly while behaving perfectly civily with their dinner guests.
After reading his article I guess I need to take all my new prospects out to lunch!
To read the rest of the article
How to Think Like a Bootstrapper
Scott Allen
I just read this article by Scott Allen and, although it is directed to small businesses, I believe every point he makes applies to most of us and our businesses.
Bob
Jun 18, 2010 –
It may be the high-growth, venture-funded companies that get a lot of press, but the fact of the matter is that the vast majority of businesses are started for under $10,000, usually provided by the entrepreneur’s friends and family, credit cards, or their own pocket. While it’s true that bootstrapped companies have a slightly higher failure rate than better-funded companies, the difference isn’t significant, and there are lots of bootstrapped businesses that succeed, just as there are many well-funded companies that flop. Good management practices are far more important to your success than big piles of cash are.
Here are a dozen tips to help you start and grow your business with little or no capital.
The most important question before you start is: how much will it cost to make your first sale? Consider everything: product research and development, operational overhead, marketing, cost of goods, etc. If it all adds up to more money than you have, you’re not bootstrapping. Rethink your model – can you really bootstrap, or do you need a bigger stack of working capital?
Cash flow isn’t the most important thing — it’s the only thing. For the bootstrapper, cash is like oxygen. When it stops for more than just a brief period, you die. Learn everything you can about accelerating cash flow and apply as much as possible to your business. Focus on cash — not on profits, market share, or anything else. Be super-realistic — even pessimistic — when it comes to revenue projections. You have no margin for error on the back end — you have to build it into your estimates on the front end.
Start with partners, not employees. Payroll is most companies’ biggest expense. Without a big pile of cash, you can’t afford it, period. Find people who are willing to work for equity, or at least deferred salary, when first starting out. Don’t hire any paid employees until profits allow you to pay them. Of course, this means that you have to have all the core competencies for the company covered in your core team. Find people whose strengths cover your weaknesses.
Develop continuous, passive income, even if that’s not your core business. Your main business may be big-ticket, one-time sales, or project-based services. These are rollercoaster rides that may be wildly successful, but may also frequently bottom out for extended periods. In your business model, be sure to include an offering that creates steady positive cash flow — subscriptions, consumables, automated product sales of information products, etc. It may seem like a distraction at first, but the first time that rollercoaster bottoms out, you’ll be glad you made the investment.
You’re not in the business of lending money. So don’t. If a customer says they have cash flow issues themselves, that’s what credit cards are for. If payment plans are common in your market, find a financing company to partner with and let them handle it. Get payment — even partial — up front whenever possible. Require a deposit that at least covers your hard cost of the sale. Don’t make excuses — just make it your policy and be clear about it up front.
Use credit for cash, not capital. It’s perfectly sensible to borrow money to manage short-term gaps in cash flow, such as using vendor credit to delay payment until you can receive payment from your customers, or paying for something that will quickly generate profits that exceed the interest, such as a marketing campaign. What you don’t want to do is borrow money to gamble with. You wouldn’t (or shouldn’t) put a cash advance on your credit card to gamble in Vegas…don’t do the same in your business. You may very well have to personally guarantee those loans, and that’s how entrepreneurs end up in personal bankruptcy, not just closing the business and moving on.
Do without it until you can no longer do without it. Postpone any and every purchase as long as you possibly can. Share office space, supplies, equipment, etc. The longer you can wait to make the purchase, the more time you have to discover the best deal, or to clarify your needs and find which product or service is best suited to them. Also, particularly with technology purchases, prices tend to go down, not up. This also may mean doing things like having a founder’s spouse keep the books and using free contract templates instead of hiring accountants and lawyers at first. Sure, it has risks, but so does spending available cash on those services rather than on things that will generate revenue.
Don’t try to beat the big boys at their own game. Large companies have access to capital, massive distribution channels, widespread brand recognition, and established customer relationships. They also have baggage — bureaucracy, formalized risk management, overhead, massive investments in their current business model and brand. Forget about massive retail distribution (for now) — sell direct and/or focus on close relationships with a small number of niche resellers. Take advantage of your ability to be agile, to make decisions quickly and put them into action immediately.
Don’t sell what you can’t deliver. Manage your growth. Big companies can deal with manufacturing capacity, customer service problems, or even major product issues by throwing cash at the problem. You can’t. While it may not feel like it when you’ve been struggling, there really is such a thing as too much business. Make your current customers your top priority. While potential new customers may be disappointed about not being able to obtain your product or service, they’ll understand. Sure, you may miss out on some potential business, but you won’t risk crashing and burning because of reduced quality control or poor customer service. I recently heard a business owner tale a cautionary tale about his experience of growing too fast. At one point, he called his own customer service line to see just how bad the problem was, and the automated attendant told him his expected hold time was 14 hours!
Don’t gamble what you can’t afford to lose. Don’t finance your business with a second mortgage on your home unless you’re willing to be homeless. Don’t bet the whole company on one opportunity. No matter how much you believe, no matter how good the opportunity looks, until you have the money in the bank, nothing’s a sure thing. That said, take advantage of the fact that you don’t have nearly as much to lose as big companies do. You won’t destroy billions of dollars of market value with a poor quarterly report. Employees who come to work for a startup know they’re taking a risk, while those working for a large company are usually expecting more stability. You can take chances that they can’t because you really don’t have as much at stake.
Establish relationships to support your growth before you need them. Sooner or later, you’re going to have an urgent need for resources or expertise outside of your company. It may be your first business tax return, a big order that requires additional resources to deliver, an urgent legal question, etc. Figure out who you want to use and establish a relationship with them in advance, so that they’re ready to go when you call them. If you have to scramble to figure it out when the need or opportunity presents itself, your risk of problems goes up dramatically.
Focus on the customer. Create raving, passionate fans by consistently exceeding their expectations. It’s far cheaper to keep customers than to acquire new ones. And happy customers are both your cheapest and most effective advertising. Develop your relationships with them above and beyond the sale. Learn about their business and refer people to them. Connect with them on LinkedIn. Check in with them on a regular basis with no sales agenda – just to see how things are going.
Bootstrapping is really more of a business philosophy than it is just about a shortage of capital. Even if you have capital at your disposal, or if you’re well past the startup stage, applying these ideas will help you reduce your risks and achieve smart business growth.
Scott “Social Media” Allen is a 25-year veteran technology entrepreneur, executive and consultant. He’s coauthor of The Virtual Handshake: Opening Doors and Closing Deals Online, the first book on the business use of social media, and The Emergence of The Relationship Economy. His latest venture, NFN8 Media, maintains a growing portfolio of niche content and community sites. He enjoys working with entrepreneurs and serves on the advisory board of several startups.
How to Leverage the Pain vs. Gain Mentality
August 20, 2007 by Stephen Shapiro
I came accross this blog by Stephen Shapiro–about the power of language. His articlecasued me to think about my choices and word selections. I hope you find this valuable.
Bob
In an earlier blog entry, I discuss the power of language. I want to explore this a bit further today.
Here’s my variation of the “Asian disease problem” mentioned in that earlier blog entry:
Which would you prefer?
■OPTION 1: A guaranteed gain of $75,000?
■OPTION 2: An 80% chance of gaining $100,000 with a 20% chance of getting nothing?
When I give a speech and ask the audience this question, 75% choose Option 1. This percentage is consistent across all groups, regardless of who is in the audience.
Ok, what about the following? Which would you choose?
■Option 3: A certain loss of $75,000?
■Option 4: An 80% chance of losing $100,000 with a 20% chance of not losing anything?
When audiences answer this one, 99% choose option 4.
This once again supports the premise that people will take risks to reduce losses, yet will be more risk averse when it comes to increasing gains.
Interestingly, when you look at these options, even though most people choose options 1 and 4, options 2 and 3 give you better returns. On average, you will gain $80,000 with option 2 and will lose $80,000 with option 4.
Look around and you may begin to see examples of advertisers focusing on losses rather than gains, with stellar results. For example…
How many mattress commercials have you heard that say, “Buy our xyz bed and you will get your best night’s sleep ever.” Yawn. Boring. The commercial may put me to sleep, but it’s not going to get me to buy a bed.
Consider this actual advertisement. “If your mattress is 10 years old, it weighs twice its original weight due to the dust mites that accumulate over the years.” Ouch! This makes me want to replace my mattress now.
Instead of selling customers on how great your product or service is, show them the downside of using a less reliable alternative. As a friend of mine says, “If you need open heart surgery, would you shop for a cardiologist based on price?” She then launches into the risk associated with not getting it (your product/service) right.
What examples have you seen of great sales pitches, advertisements, or anything else that uses this concept?
P.S. One place where this concept apparently does not apply is on TV game shows. I see people on “Deal or No Deal” risk a certain $500,000 for a 50% chance of winning $1 million. Their interviewing process must do a great job at finding the few people who really do take risks to increase their gains.
May 17, 2010
Why You Should Love Failure
Posted by Donna Fenn at 3:58 PM
I spent part of last week at a conference called MultiMania in Kortrijk, Belgium, speaking about young U.S. entrepreneurs and learning about their European counterparts. One of the most striking things I discovered is that while young people in Europe do have the desire to start their own companies, many are faced with a major stumbling block that is largely cultural: fear. Not fear of taking the leap into the world of entrepreneurship, but fear of failing at it. The topic also came up at SXSW last March at a panel discussion on “How to Teach Entrepreneurialism Globally.”
On all fronts, the consensus seems to be that it’s awfully tough to encourage entrepreneurship in environments where failing is viewed as catastrophic and humiliating, as it is in many parts of the developing world as well as in Europe. Not that we are universally in love with failure here in the U.S., but somewhere along the way, many of our entrepreneurs seemed to start wearing their failures as badges of honor – evidence of risk-taking, resilience in the face of adversity, and the ability to dust yourself off and start over again.
But there’s something else going on here as well, I think, and it’s a concept that Srikumar Rao lays out brilliantly in his new book, Happiness at Work. It’s about valuing process over outcomes. In other words, while you most certainly start a business with a big goal in mind, the true value of the entrepreneurial experience comes from what you do every day to achieve that goal. If you love the process and learn from it, then achieving the goal itself almost becomes secondary. In fact, you may discover that your accumulated knowledge can be leveraged more effectively toward an even worthier goal. It’s that laser focus on the process – not obsession with the end goal – that ultimately leads to success.
Great entrepreneurs understand this intuitively and I’m beginning to believe that this is particularly true of our younger entrepreneurs. Last Friday at Elliot Bisnow’s excellent DC10 Conference, I listened to Trip Adler (Scribd), Adam Smith (Xobni), and Drew Houston (Dropbox), speak with incredible enthusiasm and pride about the failed ventures that ultimately led them to their current successful businesses. “The worst thing is not having your idea fail,” said Houston, “it’s when it takes a really long time to fail.” That’s where fear comes in again: we’d rather hold on for dear life to something that doesn’t work than admit failure.
So I left Europe with fingers crossed for the same type of youth entrepreneurship revolution that we’re experiencing here in the U.S. Some notable bright spots: Fraser Doherty (otherwise known as Jam Boy) who started SuperJam with his grandmother’s jam recipe and experienced his fair share of failure before taking the UK market by storm; and a little Belgian design company called Elevenfeet whose co-founder Wouter Doornaert summed it all up perfectly: “So what if I fail? At least I’ll have a story to tell.”
Umair Haque On:Global Business, Competition, Economy
Forget Your Elevator Pitch — What’s Your Dumbwaiter Pitch?
So you’ve got an elevator pitch — a short, pithy description of why your business is special, exciting, and unique. Yawn. Today, elevator pitches are the economic equivalent of speeches at a beauty pageant: predictable, often vapid, always bland.
Here’s a suggestion. Try a Dumbwaiter Pitch instead. It’s an exercise I often do with startups, giant corporations, social entrepreneurs, and investors. Its goal? To strip an organization right down to its bones, and see how compelling it really is.
What’s the one-word description of your business? That’s right: just one word. The most common answer is: hmming, hawing, and silence. The second most common answer is an imaginary benefit. The third most common answer is a raw product — just another mass-produced, meaningless commodity. All three answers reveal a business with whose foundation, its economic concept, is confused, muddled, and perhaps even nonexistent.
Let’s go through a few examples.
What’s the Dumbwaiter Pitch for a soft drink company? “Happiness” is Coke’s latest answer. Of course, the link between soft drinks and happiness is tenuous at best, and probably totally nonexistent in reality. Let’s get real: the Dumbwaiter Pitch for a soft-drinks company isn’t “happiness.” It’s just “sugar-water.” And in a world where the costs of obesity on the one hand and poor nutrition on the other are ever more apparent, that’s a weak, uncompelling proposition.
What’s the Dumbwaiter Pitch for Vertu — the Nokia subsidiary that makes luxury mobile phones? “Luxe” doesn’t work — it takes more than merely ostrich leather to make high-end tech, as Apple’s groundbreaking software so vividly keeps demonstrating. Blinged-out versions of a $50 phone that sell for 100x the price? The only Dumbwaiter Pitch for that set of economics is “consumption.” And that highlights the problem with the very foundation of the business, its economic concept. In a world where consumption must rebalance sharply, Vertu’s concept has reached its expiry date.
What’s Foursquare’s Dumbwaiter Pitch? If it’s “gaming,” there are plenty of more involving games, more powerful substitutes around. If it’s “connection,” who’s connecting? There’s a long way, it seems, to go before real connections are made. The Dumbwaiter Pitch highlights the need for Foursquare, while cool, to get serious about next-gen economics.
What’s Twitter’s Dumbwaiter Pitch? I’d say: “alerts.” And that’s powerful in a roiling, seething world where risk and volatility are vastly amplified. Information that alerts you to possibilities and opportunities matters more than ever before. You can’t get alerts anywhere else: not at Google, Yahoo, or Microsoft. Twitter is one of the few companies in the economy with a solid, compelling Dumbwaiter Pitch.
In simplicity lie the seeds of explosively powerful propositions. In complexity, only confusion, incoherence, and uncompetitiveness.
Reductive, simplistic, restrictive? Think again. Nearly every disruptive business, in fact, has a Dumbwaiter Pitch as pure, simple, and powerful as Niagara Falls. Google? Search. Apple? Beauty. Lego? Creativity. Conversely, companies that aren’t sharp-eyed enough to see that their real Dumbwaiter Pitches are lame, tired, or just plain evil — well, they usually end up facing extinction. Wall Street’s should have been “wealth” but it was really “looting” — pow! Big Pharma’s should be “health” but it’s really “pricing” — zap! Big Food’s should be “nutrition” but it’s really “obesity” — bang!
The Dumbwaiter Pitch is so powerful because it cuts through the obfuscation, glad-handing, and double-talk so beloved of boardrooms and beancounters and asks them to get straight to the real point. And, of course, like the sharpest of scalpels, it reveals where there never was any meat on the bones to begin with.
Only businesses with a razor-sharp, laser-focused vision — and a disruptive economic concept — can craft a Dumbwaiter Pitch. Do you have what it takes? What’s the one-word description of your business?
