Matt Mayfield's Blog on Business

When and how can I raise prices?

First, let’s start with an assumption that your product is great value and your existing pricing strategy is leaving too much money on the table.  (See other blogs on licensing strategies and setting prices).  Let’s also assume we are talking about a business that has repeat purchasing– like a subscription.

For new customers, you can normally just raise your prices without any unsuspected consequences.  Pro tip: Signaling an upcoming price increase can trigger a sense in urgency in many who cannot otherwise decide quickly.  Legacy customers, however are a more complex Read more…

At the end of the day, the “correct” price is the price where both the buyer and seller agree to a transaction– Everything else is theory, guidelines, and positioning.

Pricing

How should a customer think about price?

1. Value.  This is the one they teach you in any marketing or sales class.  In truth, if your customer is pushing back on price, the most likely reason (and most easy fix) is to understand how the customer perceives the value and then question if that perception is correct.  When setting a value based price, make sure to Read more…

We now have many ways to communicate with customers, too bad they never read or answer what we send

Email is still relevant, but it is easier and easier to get lost in the mountain of communications that your customer receives every day.  Here are a few best practices:

Three emails to get one answer

It is now normal that you will need to remind someone 2 times to get a response.  Assume this is the case and plan your reminders in advance.  You want to Read more…

I have long since recognized that there were two distinct types of salesmen.  (see https://www.telekta.com/blog/2009/03/production-vs-protype-sales/)  The person that has a business card that says Sales is usually the one that brings in all the money that keeps all the rest of us in paychecks.  New professionalism in startups, has now created some new vocabulary to describe the other types of sales people.  My expertise as a “prototype salesman” can now be described as Discovery and Vaidation Sales in the vocabulary of modern startup and product launch.  While ‘normal” sales is better described as Scaling Sales (also Efficiency and Extraction stage)

Startup Gurus for some time have been warning and now there is real hard statistical data now prove that “premature scaling” is the biggest cause of startup (or breakthrough product launch) failure.  Read more…

When launching a product (especially when you are a small startup), there is a common mistake that most everyone makes the first time around: benefit inflation.  The problem arrises when someone thinks of a small change that could be made to the product that might appeal to a particular group of users.  As they add more and more features/benefits, the hope is that the product will appeal to a larger and larger audience and better justify its price point.  The reality is that additional features/benefits do the opposite: they restrict your market and reduce the perceived value of an otherwise good product.  To explain how this happens and how to avoid it, we will make a few mind experiments: Read more…

In a previous post I talked about “Referenceability and Introducabilty”— now let’s scale this.

In a previous post I introduced the concept of Connectors (people who can introduce you to Targets) and how to think of them in terms of Introducabilty & Referencabilty as well as how to ‘activate them”.

Can this scale?  Most people would say no.  In my experience, the answer is Yes.  How?  Starting with the obvious assumption that you have a great product or service and Read more…

Take the express lane to getting customers for large, complex products

Every salesman is desperate to avoid the dreaded cold call.  People with great networking skills have always been able to get introductions to prospective customers.  Social networks like Linkedin have revolutionized this type networking by making everyone able to find a 2nd degree connection within almost any potential customer.  The technique is simple– it ends with your Connector sending an email to the Target (and putting you on the cc) introducing you as a good guy to know.  In my terminology, your Connector has high “Introduceablity”.  Often such a Connector can introduce you to several others over time if you don’t abuse the privilege.

Introducability gets you the Target’s attention and results in a high probability of a meeting taking place.  Unfortunately it does little to build trust or get you any closer to closing a deal with the prospect.  For this, you need another type of Connector– one with “Referenceability”.
Connectors with Referencability Read more…

Will the real salesperson please stand up….

I have managed different types of professionals, but I can attest that no group is harder to influence than Salesperson.  A typical interraction might be:

1. On Monday, “Joe, I need your forecast by Thursday End of Business”.  His response “Ok, I’ll do what I can” (Result: No report)
2. On Friday, “Joe, you promised that forecast yesterday”.  His response “sorry Matt, I’ll get it by the end of today”  (Result: No report)
3. On the next Monday 9am, “Joe, I have a board meeting at 2pm, I need that forecast by noon”.  His response “sorry Matt, I’ll get it right away” (Result: partial report by 12:45)

In fact, this chain of events is so predictable that I started to use this as an indication of future sales success.  Let’s look at each step in detail and I will try to explain this from the Salesperson’s perspective/nature and explain my insight.

Read more…

With all the technology people who have ambitions of joining the startup world, I thought I might talk about why technical people struggle so hard at learning the critical sales roles. The interest in this D-Labs sponsored talk was far more than I expected.