Salesforce.com employed guerrilla marketing tactics early on. Budding entrepreneurs all over the world have elegant and innovative ideas. However, they struggle with the obstacles they face in their journey to turn their business into a commercial success. Worse still, each one thinks that they are alone in their fights. However, every entrepreneur goes through the same pain points. The story of Salesforce.com provides some valuable lessons that start-ups can learn. Although they are practical, it requires a mindset that embraces a radical approach to doing business. It that departs sharply from the more traditional one. Study them carefully and customize it for your businesses.
Stand out with a purpose
In 2000, at the salesforce.com launch party in San Francisco at the Regency Theatre, what stood out was the theme about waging war against the traditional way of delivering software services. They turned the lowest level of the theater into an inferno with actors locked up inside cages playing captured and frustrated enterprise salespeople. They were screaming, “Help, get me out,” “Sign this million-dollar license agreement. I need to make my quota!” etc. After the more than fifteen hundred attendees had worked their way through this hell, they went to the top floor. The place represented heaven where there was music, light and finally salesforce.com. There they obtain Nirvana.
The End of Software Campaign was the name of the party. On the morning of that day at the Siebel User Group Conference at the Moscone Center Salesforce.com sent hired actors. Their job was to pretend to be TV crew from a local station. They also sent protestors to picket the conference. Every person who went into the meeting were given an invitation to the salesforce.com launch party that night. Although the police arrived immediately, their presence only fanned the flames as the protestors were there legally.
PR Week recognized this End of Software Campaign as the “Hi-Tech Campaign of the Year”. Within two weeks around one thousand organizations signed up for the service. By daring to be different than the conventional way salesforce.com was able to get the much-needed press coverage at nil cost and reach out to the target market which was the end-users rather than the business enterprises and large corporations.
Aim for potential end users
Salesforce’s City Tour Program built Street Teams that got customers selling for the company on a local level. Each City Tour stop had a keynote address. Marc Benioff, the founder of Salesforce.com, spoke at each event followed by a live demo. There was also some time dedicated for questions.
In every City, the customers were eager to share their stories about their experiences using the software. This City Tour frenzy morphed into a movement. Salesforce.com contacted end-users in advance of the events, and most were eager to participate. Salesforce.com started to post blown up pictures of their customers at events and other marketing materials. Their companies acknowledged these employees’ success since it contributed immensely to the bottom line and they climbed the corporate ladder faster than otherwise would have been possible. Ads started appearing on job sites and soon “implementing salesforce.com” became a differentiating skill that set the candidates apart. It became a skill that employers sought out highly in sales professionals.
Salesforce.com evolves through a process called “intelligent reaction” – a process that involves making minor upgrades every week and constant releases incorporating real-time feedback from the end-users. The phenomenon, as they put it, means going where the business takes them rather than predicting the future trends without any inputs from the customers. It is, in essence, engaging the end-user as an active participant in the evolution of the company. In their early growth, salesforce.com built an online community through forums, blogs and chat sessions that have been emulated by many other companies since then.
Vulture and not venture capital
Raising money at the initial stage of the business evolution was no easy task for salesforce.com. It was an uphill battle. During the frothy dot-com era, Salesforce turned to the venture capitalists (VC) with their cold pitch for investment. When VC after VC turned them down, they turned to the age-old adage of 3F – friends, family, and fools – in other words, vulture-capitalists to raise capital for their start-up. This alternative financing model turned out to be a winning funding strategy that brought the investors exceptional returns in a short time. Subsequently, it attracted a steady stream of potential investors within a very short period. And the VCs regretted their decision not to believe in the company.
The journey of Salesforce thus began with a purpose to do enterprise software differently. By taking advantage of the enormous opportunities of the Internet in an industry known as Cloud Computing that was growing leaps and bounds at that time, Salesforce.com was able to deliver enterprise applications cheaply through a website. It started off in 1999 in a small rented apartment with three developers and a few computers. Ten years later the company morphed into a $1 billion company with a few thousand employees. Salesforce not only managed to survive the dot-com crash of 2001 but also grew to become the world’s largest growing software company in less than a decade.
Lessons for startups
The End of Software type of launch party may not be a possible thing for every start-up company due to many restrictions. Friends and family may not believe in and invest in a concept that resides just in the head of an aspiring business person. But the implication is that by leveraging a guerilla tactic and bringing on board well-wishers an entrepreneur with a can-do-attitude can take the company to soaring heights. The idea is not to copy and paste the ideas illustrated here but to borrow ideas and adapt them with some modifications depending on the nature of the business, the local culture and the needs of the end-users. Uniqueness within the norm is of the essence here.
Photo Credit: Daria Nepriakhina
The vexing question of every Sales Manager and Business Development Manager who is newly appointed is this: “What am I supposed to do and not do”?
Managing sales and developing business at the same time can be a nightmare for a large organization. Each role is a humungous task in itself. Combining the both together and expecting one person to handle both is not only practically difficult but also inefficient. Small business owners may not agree to this as more often than not they have just one person who wears both these hats, and they find it cost-efficient too. That may work out initially for a start-up or a mom and pop store, but in the long run, when the business grows to attain maximum scalability the firm must segregate the two tasks and appoint a Sales Manager as well as a Business Development Manager to perform two different kinds of jobs. Often the difficulty in doing so arises because of the ambiguity in the roles played by both employees who hold different titles. Business owners and managers themselves are confused as to what they are supposed to do.
The roles that are unique to a Business Development Manager are the following:
- Building the right product-market mix
- Determining whether the product meets the need of the client
- Expanding the reach of the goods to increase revenue
- Recommending timely adjustments to products
- Improving products to fill customer requirements
- Informing clients about new developments in the products
- Dealing with prospects unsatisfied with the products
- Responding to negative press about the products
- Pitching goods and services in new market segments
- Studying the competitive landscape in the industry
- Forming strategic partnerships with other businesses
- Segmenting the target customer market
- Prioritizing market segments or key accounts
- Identifying various routes to market
- Creating strategies to expand company’s current markets
- Researching markets to find new ones
- Planning and overseeing new market initiatives
- Attending conferences, meetings, and industry events
- Researching companies to hunt leads
- Exploring, prospecting, and qualifying leads
- Researching who makes decisions about purchasing
- Determining whether a lead is ready to buy
- Bringing in enough qualified leads to generate business
- Attracting customers to the front door of the building
- Maintaining fruitful relationships with existing customers
- Contacting potential customers to establish rapport
- Investigating if the price matches the ideal buyer’s affordability
- Negotiating prices with manufacturers and distributors
- Developing quotes and proposals to new partners
- Identifying new opportunities and methods for sales campaigns
- Generating demand and maximizing sales
- Writing reports and providing feedback to upper management
- Creating high-level vision and developing relevant strategies
- Understanding the fundamental drivers of the business
- Making wise decisions in pursuit of long-term value
- Determining when and where to scale the business
- Gathering data to validate paths to achieve business goals
- Identifying and executing new areas of business
- Weighing how changes affect the entire company
- Identifying signals that promise greater opportunity
- Assessing trade-offs between opportunities vs. risks
- Generating new channels to reach customers
- Producing long-term growth and profitability
- Planning operations and strategic marketing with top executives
- Coordinating with departments for new account setups
The roles that are explicit to a Sales Manager are the following:
- Demonstrating the product features
- Overseeing the distribution of products
- Maintaining appropriate inventory levels
- Gauging customer’s product preferences
- Monitoring market trends to tweak sales efforts
- Weighing how changes affect sales territories
- Taking deals across the finish lines
- Selling the product to the identified customer
- Convincing customer to go from the door to cash register
- Up-selling and cross-selling to existing clients
- Offering post-purchase service and support
- Resolving customer complaints regarding sales and service
- Optimizing existing channel to reach more customers
- Selling to customers in new territories
- Explaining price breakdowns to prospective customers
- Informing payment terms to end-users
- Developing pricing schedules and rates
- Developing promotional ideas and materials
- Determining discounts and special pricing plans
- Tracking sales team metrics and reporting to leadership
- Implementing sales plans based on company policies
- Developing sales strategy to achieve organizational goals
- Preparing and approving budgets and expenditures
- Coordinating and monitoring online sales activities
- Meeting business revenue targets
- Focusing exclusively on driving revenue
- Following up on business leads on a regular basis
- Investigating lost sales and customer accounts
- Tracking, interpreting and collating sales figures
- Maintaining data and records for future reference
- Formulating sales policies and procedures
- Executing and measuring sales plan
- Hiring, training and leading sales professionals
- Managing team of sales staff and assign territories
- Developing field sales action plans
- Collaborating with IT to improve the sales technology
- Developing direct sales techniques for the sales force
- Creating incentives for representatives
- Generating ideas for sales motivational initiatives
- Executing measures when performance deviates
- Advising representatives on ways to improve performance
- Demonstrating excellent team-building skills
- Transforming sales team into a high-performing one
- Determining ways to streamline and improve the sales process
- Keeping up to date with products and competitors
Business Development Manager is responsible for creating long-term value for the business while a Sales Manager is supposed to maximize sales. A good analogy is thus: A Business Development Manager gets the customer to the door, and a Sales Manager takes the customer from the door to the cash register. A Business Development Manager who is busy looking over the competitive landscape to spot trends and opportunities does not have time to service the clients. It is the job of the Sales Manager to take care of the prospect. Hence the separation between the two roles.
Photo Credit: Olu Eletu
Imagine this conversation between two shoppers at a car dealership:
Consumer #1: I want the one I read about in the latest issue of Car and Driver magazine: It has a six-cylinder turbo engine, a double-clutch transmission, a 90 strokebore, and 10:1 compression ratio.
Consumer #2: I want a red one.
Involvement describes a person’s perceived relevance of the object based on their inherent needs, values, and interests. Most marketers and salespeople grapple with the challenge of finding ways to get their customers interested in what they sell. Indeed, a highly involved customer is The Holy Grail of Marketing.
Why is this so?
Our motivation to attain a goal increases our desire to acquire the products or services that we believe will satisfy it. However, as we see in the case of Consumer #2 at the car dealership, not everyone is motivated to the same extent. Involvement reflects our level of motivation to process information about a product or service we believe will help us to solve a problem or reach a goal. Think of a person’s degree of involvement as a continuum that ranges from absolute lack of interest in a marketing stimulus at one end to obsession at the other. Inertia describes consumption at the low end of involvement, where we make decisions out of habit because we lack the motivation to consider alternatives.
As our involvement increases we think more about the product (“I’ve spent the last three days researching mortgage interest rates”) or we experience a strong emotional response (“I get goose bumps when I imagine what my daughter will look like in that bridal gown”).
Not surprisingly, we tend to find higher levels of involvement in product categories that demand a big investment of money (like houses) or self-esteem (like clothing) and lower levels for mundane categories like household cleaners or hardware. Still, bear in mind that virtually anything can qualify as highly involving to some people—just ask a “tool guy” to talk about his passion for hammers or plumbing supplies.
Cult products such as Apple, Hydrox, Harley-Davidson, Jones Soda, Chick-Fil-A, Manolo Blahnik designer shoes (think Carrie on Sex and the City), and the Boston Red Sox—command fierce consumer loyalty, devotion, and maybe even worship by consumers. A large majority of consumers agree that they are willing to pay more for a brand when they feel a personal connection to the company.
In our 24/7 world where consumers are bombarded with marketing messages, selling involvement is harder than ever. But, it’s well worth the effort to explore strategies to boost customers’ motivation to acquire a product, service or specific brand. This requires investment of time, money, — and especially creativity. But the payoff is well worth it – this is what we can think of as Return on Involvement (“the other ROI”).
Join us for a one-hour webinar on May 11, 2017 and learn more about “the other ROI” with Michael Solomon.
Michael R. Solomon, Ph.D.
Photo Credit: Meghan Duthu
BENEFITS, NOT FEATURES: 30 QUOTES
- Reid Hoffman: Founder, LinkedIn
If you are not embarrassed by the first version of your product, you’ve launched too late.
A great product isn’t just a collection of features. It’s how it all works together.
- Marco Arment: Founder, Instapaper
Making a product better often requires removing features.
The secret to building great products is not creating awesome features, it’s to make users awesome.
Sell the benefits, not your company or the product. People buy results, not features.
- Dave McClure: Founder, 500 Startups
Features are like having sex. You make one mistake and you have to support it for life.
Pick three key attributes or features, get those things very, very right, and then forget about everything else … By focusing on only a few core features in the first version, you are forced to find the true essence and value of the product.
Our old system was just not able to accommodate our newest product features. Our goal was to get a stable, scalable, system that would help us speed new products to market.
The best feature is less featureless.
We see a lot of feature-driven product design in which the cost of features is not properly accounted. Features can have a negative value to customers because they make the products more difficult to understand and use. We are finding that people like products that just work. It turns out that designs that just work are much harder to produce that designs that assemble long list of features.
I would say, as an entrepreneur everything you do – every action you take in product development, marketing, every conversation you have, everything you do – is an experiment. If you can conceptualize your work not as building features, not as launching campaigns, but as running experiments, you can get radically more done with less effort.
We now know that something between 85 and 90 percent of most software product features are unwanted and unneeded by customers. That is an enormous amount of waste of time and money that ends up on the floor.
We are focused on features, not products. We eliminated future products that would have made the complexity problem worse. We don’t want to have 20 different products that work in 20 different ways. I was getting lost at our site keeping track of everything. I would rather have a smaller set of products that have a shared set of features.
Even the best designers produce successful products only if their designs solve the right problems. A wonderful interface to the wrong features will fail.
What features your customers as for is never as interesting as why they want them.
Reducing a product’s definition to a list of features and functions ignores the real opportunity – orchestrating technological capability to serve human needs and goals.
If you watched companies such as Sony and Samsung grow, they focused first on features and then on industrial design, which made their products look and feel better.
No amount of data will tell you if a feature should be in the product, because it doesn’t exist. You need to have a very clear leader with a clear point of view…otherwise, you get a mishmash of features and stuff that doesn’t make a lot of sense.
You want to do a few things really well because you want to come out with a product that is fully baked, even though it may be lacking in a few features or whatever, rather than the one that’s all-achieving but not doing anything too well.
It turns out that if you optimize the performance of a car and of an airplane, they are very far away in terms of mechanical features. So you can make a flying car. But they are not very good planes, and they are not very good planes.
Normal people…believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet.
Technology is supposed to make our lives easier, allowing us to do things more quickly and efficiently. But too often it seems to make things harder, leaving us with fifty-button remote controls, digital cameras with hundreds of mysterious features and book-length manuals, and cars with dashboard systems worthy of the space shuttle.
The cost of adding a feature isn’t just the time it takes to code it. The cost also includes the addition of an obstacle to future expansion. The trick is to pick the features that don’t fight each other.
I don’t want features, I want value. I don’t want benefits, I want value.
Every feature has some maintenance cost, and having fewer features lets us focus on the ones we care about and make sure they work very well.
Prices are coming down. And they have the features and benefits people want.
Hardwood floors are very popular features in new homes. Many individuals are also installing hardwood floors when they renovate their residences. Consumers realize that this feature adds value to their investment.
This is true for most new products. The majority of people you’re competing with are non-users. They are people who have never used your service before. And what they say is actually the most important. What they say is the thing that blocks you from expanding the size of your market with your features.
The fossil record implies trial and error, the inability to anticipate the future, features inconsistent with a Great Designer.
Learn not to add too many features right away, and get the core idea built and tested.
Image: Imani Clovis
Asset-light business model is the key to success for start-ups
Asset-light business model is the ket to success for most start-ups. Around eighty percent of new businesses fail not because of a bad idea but because of choosing the wrong business model. They start with high fixed costs and no revenue. At the core of this bad implementation lies the ill-conceived notion that a heavily invested business would generate high revenues. Some have flourished, but most have floundered. People give too much concentration on acquiring operational resources for the company. But not enough gets done on generating at least break-even revenue. This has resulted in a majority of start-up flops.
Well, it doesn’t have to be that way. There is still hope for entrepreneurs. Seasoned business people have extolled the virtue of starting small with zero assets and leveraging the enormous power of technology. Put it another way, it means adopting an asset-light business model at the very early stage of the company.
At the Berkshire Hathaway Annual Shareholders Meeting held in April 2016, Warren Buffett commented that asset-light businesses are the ideal investment opportunities. They generated significant cash flow by investing in some asset-light businesses in the early years of the company. At the heart of today’s most successful start-ups lies the emergence of asset-light business model empowered by deep-pocket private investors who are disappointed by the returns from other investments. The business model helps companies exploit new revenue opportunities faster than more mature and established firms. On closer inspection, it is not hard to find some common traits and features of several new generation businesses.
The disruptive trend towards asset-light business model has bolstered the bullishness of Uber’s investors. The model has enabled its strategy of growth over the pursuit of profits because of the lower cost of expansion. Uber does not own or maintain any vehicles because it uses the gig economy for its survival.
What started off as a simple online business in 2008 selling flip-flops from a Berlin flat has developed into large e-commerce selling goods to 15 countries. Zalando sales revenue is rising by around 15% a year. Guess their business. Selling other brands through the Internet. Surely, the asset-light approach is nimble and sustainable.
One of the ways to adopt an asset-light business model is through outsourcing as Wendy’s has done. It has reduced capital and the amount of real estate they own and managed through franchising their American outlets. Many fast food giants have followed suit and have taken advantage of such scalability.
Capital equipment OEMs
Most OEMs have transferred the task of designing and manufacturing the systems and subsystems to suppliers as new parts sold by vendors are replacing certain obsolete ones thereby passing on the operational complexities and costs associated with producing them using the capital-intensive equipment.
An innovative business model whereby partnering with existing hotels and getting a percentage of commission from them has made OYO Rooms a huge success. The brand owns hotels without having to build them from scratch thus resulting in huge savings, less risk, and exponential growth path.
From homegrown online start-up to an e-commerce giant Snapdeal has managed to garner a huge customer base just by leveraging technology. The Internet has made it possible to reach a wider range of market than ever before with lower asset requirements. In just over five years it has managed to achieve a valuation of USD 5 billion making it attractive to future investors.
Accor group of chain hotels and InterContinental hotel franchises some outlets to other hotel operators. They manage but not own some others. Only a minority of the outfits is owned or leased by the companies. Here the bricks-and-mortar is the property of someone else. Similarly, Marriott owns only a tiny fraction of the hotels that bear its brands.
Utilization and not the acquisition of aircraft is key to stellar returns in the aviation industry. Lan flights use their aircraft to service both passengers and cargo. Likewise, DHL and Cathay Pacific share aircraft for their cargo and passenger routes respectively enjoying the advantages of increased utilization of their capital intensive wide-bodied aircraft.
Types of asset-light business models
Boston Consulting Group points out the most common types of asset-light business models based on the sources of differentiation. They are outsourcing, asset-sharing, licensing in, and licensing out. Inherently these models help companies to keep costs low, diversify risks, and to branch out into new markets. Companies outsource the supporting systems so that they can free up their resources and concentrate on their core business. Similarly, asset-sharing helps in lowering operational and labor costs. Licensing in and licensing out has helped companies to foster valuable strategic alliances in a cost-effective manner.
Lessons for start-ups
It is only natural for a wide-eyed entrepreneur to get overwhelmed and intimidated by the sheer enormity of all these successful businesses. But they all started off with zero capital. All they had was the founder’s drive. Their success lay in adopting an asset-light business model that had virtually no cost and was easy to exit in case the business failed. An asset-light business model start-up company to be successful and to have the edge over others in the market should have the following essential qualities:
- Start with the potential for future growth by paying attention to the market demands
- Do strive for a wider and deeper reach of the target market to achieve quick scalability
- Follow the trends consistently and continuously for long-term business sustainability
- Invest in cutting-edge technology such as software, systems, and subsystems
- Take fewer risks i.e. less capital-intensive investment, equipment, and real assets
- Explore cost-effective measures such as sharing resources with other entrepreneurs
The growth path of traditional old businesses was linear which implies that it took a considerable amount of time to expand the business sometimes even took the founding entrepreneur’s lifetime to achieve the desired scalability and financial success. An asset-light business start-up, on the other hand, can grow exponentially bypassing many of the life cycles of a traditional business by adopting an asset-light model enabled by modern technology. Today advanced e-commerce software has made it possible for companies to find success with a mere fraction of the cost and time.
Photo Credit: Suhyeon Choi
What is the best way to communicate new campaigns to the salesforce? Traditionally there has been a constant tension between sales and marketing. The tension escalates when the marketing department designs a campaign to increase the sales of a particular product or a season without the input of the sales staff. Often the person in charge of marketing campaigns senses a disconnect between the marketing team and Sales team. Successful marketing cannot happen in a silo. It has to happen with the buy-in from the Sales team. Happy salespeople build lasting customer connections. Today, there is an urgent need to converge both the sales and marketing teams together to accomplish the desired results. The Marketing leader can adopt some proven methods to get the group to own the campaign.
Engage Sales early
If the Sales team is accountable for the success of a particular project or campaign, gain their buy-in early. Not after the campaign launch. The sales team are constantly in touch with the customers on a regular basis. Hence they can be a valuable source of strategic as well as tactical input. They can also drive creative thinking. Bring the sales force early on. It can be the most efficient strategy to find out how the target market will respond to the marketing campaign. Perfect the campaign at the initial stage itself with advice from the sales department. Then during the campaign, not much tweaking would be required.
Demystify the clutter
As a marketer, it is important to explain to the sales representatives the mechanics involved in the campaigns. Avoid using jargon as far as possible as it would only add to the confusion. Make it easy for them to implement the campaign. Telling a compelling story, pointing the team to an important thought leader in the field, and illustrating it with a diagram are all tactics that can help the team better understand the objectives that the campaign is meant to achieve. A better-informed sales rep does a better job in supporting the marketing team in their campaigns.
Address the pain points promptly
Before launching a new campaign, the sales team goes through a learning curve. The duration of the learning time differs from one person to another depending on their learning propensity. Marketers should work hand in hand with the sales team to identify the pain points involved and address them in real time. Sometimes the team has a good understanding of the process. However, they waste an enormous amount of time during each step of the process that would ideally take a far lesser amount of time. This wastage of time should also be addressed using automated workflows, educational slide decks, and if needed by installing an internal CRM software.
Show them what’s in it for them
Each team member in the sales department is different. So are the personal aims. Meet with each to find out what they are and relate the corporate goals to each person’s goals. Show them how the management can help them achieve these aims by accomplishing the company goals. After that, let them know that the communication lines are open to deal with any concerns, complaints, and ideas they may have as they go along. Give them the necessary training and tools required to roll out the campaign successfully. The sales team will then start feeling encouraged and motivated to be on the side of marketing.
Make sure the campaign tasks assigned to each member of the team play to their strengths. There is nothing more inefficient than putting people in mismatching tasks. People love to do those tasks that they are good at doing. It motivates them and keeps them productive. Then set measurable goals consensually and hold them accountable as agreed. Allow them to have a say in the improvisation process going forward. Paint the bigger picture and remind them why it matters to the company as a whole and how their personal goals and career advancement fit into the grand scheme of things.
Keep the team informed with regular updates
Keep the sales members regularly informed about the progress of the campaign through daily briefings, staff meetings, newsletters, etc. the staff will then start to see results as and when they happen and will feel valued by the management for their contribution. If there are any areas of the campaign that needs catching up, this will help the team come up with ways to bring the campaign back on the trail and forward. The methods thus suggested can also make their jobs much easier while enabling them to spend their valuable time on closing deals with qualified leads.
In larger corporations, it is a common practice to find task force teams set up around projects. Each of them would consist of 5 to7 members whose mandate it is to recommend ideas around an issue. The entire team agrees that they would strictly adhere to the recommendations thus made. In most cases, this arrangement has produced phenomenal results.
Companies launch marketing campaigns and promotions in response to varying market trends and consumer tastes. It is often the key responsibility area of a high-level Marketing Director or Business Development Manager who have a say in designing the campaign. Doing so without the input or feedback of the salespeople is doomed to failure. It is imperative to get the buy-in of the people who sell the products to the end-users. The success of the campaign, thus, to a large extent depends on including the salespeople in the decision-making process.
Photo Credit: Olu Eletu