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3+ Great Books for Sales and Marketing
Three books I find useful in launching into new markets (updated since first posted in 2009)
3 Great Books
I am not a big reader of sales, marketing and business books. However, whenever I am working with someone who is interested in further developing their ability to sell and market, I find myself recommending the same three books.
The first is Rob Jolles book, Customer Centered Selling. It is unlikely that you have heard of this book as Rob is a relatively minor author in the field of spin/consultitive/complex selling, but I find his presentation is by far the best. He is a veteran salesman and sales trainer from Xerox. For me, there were two world class Silicon Valley companies in the Eighties: the great engineers came from HP and the great salesmen came from Xerox. While both have lost their shine in recent years, they were in their time factories for their respective talents. Rob concisely communicates sales as a science and a process for large complex consultative sales. Rob also does a great job of explaining why salesmen (real salesmen, not order takers) are a good thing for society.
Client Message And Your Message Collision
When selling services to other companies, you need to re-consider your key website messages.
Recently I came across a »corner case« of web site design. Two clients were providing services to other businesses (B2B), but in entirely different industries. Both struggled to create websites and key clients gave negative indications. The problem and the solution for both was the same….
Let’s imagine a simple outsourcing relationship to better understand the problem. Outsourcing is likely to be promoted based on a critical knowledge, price, location, language, or other advantage that the supplier (“SmallCorp”) has over their client’s (“BigCorp”) internal resources. However, BigCorp is selling to their customer’s with a message that they are uniquely qualified to solve a specific problem. The SmallCorp’s message, if ever exposed, is completely incompatible with their cleint (BigCorp’s) message. In an age where nearly anyone is potentially exposed to end customer-facing communications, it is high risk that an outsourced person could expose his name to an end client. Once exposed, social networks (linkedin, facebook,etc) quickly expose SmallCorp – including which company this person works for and what “priorities” his company has. The result—client message collision.
The solution, is to… Read more…
Managing Salesmen
With salesmen, you pay for results through commission. What is there to manage?
I made the transition to management while an engineer. At that same time, my main outside activity, sailboat racing, also made a transition from racing crew with a small role to starting my boat and taking on captain responsibilities. With both, I made lots of mistakes. Later, I started to educate myself in less damaging ways through reading and classes. One surprise, was that the problems I was facing on the job, were nearly the same that I was facing with my unpaid racing crew, and even more remarkable was that the management books would often describe the techniques that I discovered through painful trial and error. Engineers and volunteer sailors are difficult groups of people to manage effectively, but far easier, in my experience, than managing salesmen.
We pay salesmen almost exclusively based on results (not effort), yet they do not control markets, don’t make the products they sell, and have few control points within the customer. Read more…
The High Cost of Selling Software
The cost of getting software into the hands of customers is typically 2 to 4 times more than the cost of developing the software…
During the current economic downturn, governments have looked to stimulate the economy, and have shown particular emphasis on the small businesses that are seen as the engine for creating jobs. One common stimulus has been to promote new software and other technology R&D efforts that create Intellectual Property (IP). From my way of thinking, they have it wrong in their stimulus target. Many small businesses are able to create software IP through “sweat equity”, that is, labor that not directly compensated. The cost of licenses and hardware need to create the software is usually very small and the typical small business entrepreneurs invest their time while remaining in their home offices close to family and friends.
Unfortunately, after making the sacrifice required to create the product, many of these entrepreneurs then face the very sad fact that this software development effort is usually only a quarter of the total cost of getting the product to the final consumer. (Don’t believe me? Look at annual reports of software companies and software divisions of publicly traded companies to see where their costs are: R&D is typically 15-35% of total revenue.) Read more…
What is your Core Business?
“Do you want to sell sugar water for the rest of your life, or do you want to change the world?”— Steve Jobs, CEO Apple
I am a big fan of knowing what your company’s role in the marketplace is. You can call this your Mission, Vision, USP (Unique Selling Point), Evangelist Role, Cult Mantra, or even your Entrepreneurial root story. They are all variations on the same idea: your company exists to do something other than the dreary “increase shareholder value through retained profits” thing. Now, hopefully you do increase shareholder value, but that is the byproduct of doing something else that is more fun and more meaningful.
Is Marketing the Next Finance?
Rory Sutherland at Ted Talks helps me understand the value and cost of customer loyalty
I recently discovered Rory Sutherland from one of my favorite podcasts: Ted Talks. After rapidly devouring all the You
Tube videos and blogs on this Olgilvy “Ad Man”, I found myself stuck on one of his minor theses: “Is marketing the new finance?” (quoted from Guy Phillipson). He argues that every new corporate initiative in the last ten years has created the all-important spreadsheet analysis that carefully laid out shareholder value, including an analysis of the perception of the company by the financial community. How about using the same care in analyzing how the customers feel about the company and its products? From Rory’s perspective, business is simple: Find something that customers want to buy and then remove the barriers that keep them from buying it. I think he is on to something. He proposed that this current financial emphasis should be replaced by a real solid marketing emphasis. Read more…
The Falacy of the Total Addressable Markets
The Chinese Market fallacy in business planning….
Most every guide to a business planning process includes a section that describes the need for identifying the potential market size, sometimes called the total addressable market. The exercise usually starts with some governmental or Gartner-like information source to identify a global or regional segment. The planner is then instructed to make some assumptions that better restricts the addressable market, but typically the remaining market is still huge. Based on this information, inexperienced (or deceiving) business champions will compare their first few years cost against some percentage of this huge market as justification for proceeding with the business plan which I believe results in the common market penetration mistake I call “Chinese Marketing”. This is a term that I intend to push into the business vocabulary: “Chinese Marketing” is the fallacy that you can create a successful business based on getting a very small percentage of a huge market. Read more…
Practical Sales Outsourcing
When you have a great idea, but the world will not come to you…
I was recently invited as a guest speaker and panelists for an entrepreneur development group. My fellow panelist, Charles Leadbeater (a recognized proponent of innovation and Web2.0 thinking) started with a call for more collaboration and cited amazing successes and fantastic creativity. While I agreed with his thesis, I could not help but recount the many initial business (tech initiatives) failures caused by an improper reliance on collaborators for their sales channel. Charles was right to highlight a new paradigm of collaboration as a significant opportunity for small entrepreneurs, but for the sake of the technical entrepreneurs in the audience, I found myself taking a contrary position and highlighting the limitations of collaboration.
- Author Charles Leadbeater
Engineers have a serious defect– they cannot resist solving a problem. The reason I call this a defect is that it keeps getting in the way of sensible business. For the most naive, they normally worry about things like manufacturing, on-line order taking systems, and future developments, but dismiss the challenges of path to market by either assuming customers will come on their own (once they recognize the brilliance) or they assume that they will outsource sales through resellers. The truth is that many people have very successful businesses using resellers and OEM relationships, but this will not be possible at the same time as you are just entering the market. (See earlier, related blog post “Production vs Prototype Sales“). I wish it were possible to simply outsource initial sales the same way you can outsource initial manufacturing– in truth, I am a “recovering engineer” (an addictive and life long disease) and would likely have stayed a happy engineer if it were not for this unfortunate truth.
Moral Skill in Sales
Barry Schwarz at TED talks
“Not just is it profitable, but is it right?” -Obama
I just listened to Psychologist Barry Schwartz give a lecture on “virtue” at TED Talks. If you have not heard of TEDTalks, they are Technology, Education, and Design talks, a free-form gathering and speaking by some truly intelligent people. I highly recommend it. In this season’s speakers, Barry was a standout. I also found his talk on moral intelligence and virtue particularly relevant to sales.
First off, we need to eliminate the “pusher” and “manipulator” salesmen as not “real” salesmen because the value of a true salesmen is that they connect need with ability to supply. A true salesman knows that discovery is key: “You probably did know we exist (or could do this) but….” While this is a necessary part of selling, it is only the first, smallest, step. The real bulk of the work begins when the salesman has identified a customer with a need his company can fulfill. After discovery, the salesman identifies an entire list of reasons why the customer will not make the obvious business engagement; They can’t decide; the order process is too complex; already committed to another (likely less good) supplier: we don’t trust your company; we are scared and can’t decide… There are also supplier side barriers that come into play: We don’t know that they will pay; they want special treatment; we sold to them before and had a bad experience…. Read more…
Lawyer Rant no.1
Numbered because I suspect there will be more….
When we enter into negotiations with our customer, we are distributing risk based on who perceives the lowest risk and who can best manage, absorb, or assess the risk. If your company is unable to manage any type of risk better than your customer, then you are in trouble. If you are doing complex selling, then you are trying to get paid for risks that you can handle more efficiently than your customer– that is the essence of large, complex, services (and often product) business. Unfortunately, there are a number of techniques corporate lawyers use to sabotage good, healthy risk taking: Read more…