Sales

Why it’s nice to know a CEO…

I am a CEO.  I hire people… a lot of people… at all levels.  I am desperately trying to find people to fill my 4 open positions (as of 8/15/13)… http://keyingredient.com/blog/jobs .   And I know a lot of people.  So why is it nice to know me???
The answer is simple.  The same reason it is nice to know any CEO:

  1. Because if you know one, and they know you, you’ve got a leg up on ANY job role they are trying to fill.
  2. If they know you well enough, the CEO might even reach out to you pro-actively!
  3. Because a CEO of a company today, will very likely be a CEO of a different company tomorrow… e.g. they will likely be in future hiring positions as well.
  4. If you know them, you know what they are like to work with, and the kind of culture they build at companies.
  5. Because there are plenty of Business Development opportunities that come up all the time with the CEO.
  6. Because we are cool (see the picture from my most recent family hiking picture above!)
So, come on people, get to know a CEO!  They just might be able to actually help you with your career some day!  * I’d be glad to help any of my friends or acquaintances as best I can, for example.

Proof that Marketing needs an engineering REMAKE! Only 25% of Marketers add measurable value.

This survey, while not perfect, highlights the need for a Marketing Revival.  We need to apply engineering and science to marketing, or this number (only 25% of Marketers add measurable value to organizations), will get worse and worse.  What exactly do I mean?

I mean this: imagine an engineer who “adds not measurable value to an organization”…. while technically possible, it certainly ought to be quite rare!  Why?  Because an engineer KNOWS that what he works on does X for the company: creates a new product.  improves the quality of a product. etc…   And they know X numbers of product, or Y% of quality improvement.
Now, what about a marketer?  If you write a report, does it add value?  If you “make an ad” does it add value?  If you build a website, does it add value?  If you write Facebook posts, do they add value?  If you write a blog post, does it add value?  If you organize an event, does it add value?  If you manage a print ad, did it create value?  Did the brand you invented add value?  WOW.  If you say no to any of those… you are in trouble.  But the hard part is “how much value did you add?”.
Here is the beginnings of how to measure Marketing Value:
  1. First, establish the fact that eyeballs have a value.  (call it $0.001 or something).
  2. Establish the fact that an Email or Like/Follow has a value (call it $0.10 or something).
  3. Establish the fact that an “engagement (comment, review, etc)” has a value (call it $0.25 or something).
  4. Establish the fact that a “sale” has a value.
  5. Establish the fact that market data (if used) and brand creation (if used) adds product value.. how much?  Call it 10%.
  6. Establish the fact that we CAN measure the above (except for #5).
  7. Now, focus on 1-4.. measure, and see if the values need adjustment.
    1. IF YOU DON’T DO WORK in 1-4… you are not adding measurable value.
    2. Go do 1-4.
  8. Meanwhile, consider #5… how can you measure that?  (I’m still thinking about it; but the answer lies somewhere in the “Price” of your products relative to competition).
Now, Marketers.  GET OUT THERE AND MEASURE!  Don’t be a “no value added” employee.

Engineers Need to learn Diplomacy

Diplomacy is not just a great game from the 1950s, its also a vital skill, that so many engineers (myself included) lack proficiency in.    Sure we know what it means, we may even have the “theory“, but we suck at it.  We engineers are too “black and white”.  Diplomacy is not about black and white/right or wrong.  It’s about understanding and mutual benefit.  My recent read of How to Win Friends and Influence People has led me to start thinking hard about how I communicate with people.  Read on for some situations that may apply to you!

Here are some situations where Engineers have the wrong idea & how to correct them:

  1. “You are wrong, and I am right.”
    • Wrong!  (hehe, see I’m an engineer).  You can’t put the real world into right and wrong.  There are shades of gray.  
    • A better approach: “I’m sure there is much to your statement that is correct.  However, I have a slightly different understanding.  Lets discuss till we can at least see each others viewpoint.”
  2. “This is a negotiation, I will try to get what I want.”
    • Wrong!  A negotiation should be a mutual discussion to find where both parties can find benefit (1+1 = 3).
    • A better approach: “I would like to tell you what areas we really need, and where we can be flexible   If you can do the same, perhaps we can find some win-win agreement, or just move on otherwise”
  3. “This is a sale, I will try to sell the other person, by convincing them this is the best for them.”
    • Wrong! A Sale situation should be about “qualifying” the person, and truly helping them determine if the sale is right for them.  (they have to decide, you can only ask questions and point out benefits that are relevant to their situation).
    • A better approach: “We are a X company, and we help people with Y.  Do you have any problems with Y or would you like your Y to be better?  Maybe I can be helpful, but if not, no worries.”
  4. “This is a rule, do not break it.”
    • Wrong!  Rules are for science & children.  Being flexible to the situation and listening to peoples concerns is the diplomatic way.
    • A better approach: “I’d like to understand what happened better to see if this rule is still applicable, or if there is some situation where it is broken.”
  5.   “Why should I bother helping this person, when they are clearly incompetent?”
    • Wrong!  This one is hardest for me.  But diplomatic way would be to learn more about the incompetence to be able to prevent the problem in the future or create a learning system that fixes the incompetency.
    • A better approach: “I’d like to discuss the problem further and understand how you get here so I can prevent it from happening in the future.”
Can anyone recommend a good book on Diplomacy?
I think I can use a good refresher as well!

Manufacturer Coupons

If you are a marketer, and you sell products at retail, you might have wondered: “how do I make a manufacturer coupon that works for any retailer?”  The answer is quite complex, but I’ve figured it out.. and here are my instructions/thoughts:

1. Get a GS-1 barcode.  You’ll have to have an approved GS-1 Prefix (ID) number.  http://www.gs1.org/

2. Your products should have a GS-1 barcode on them.  Start grouping your products with the 3-digit group id.  (Products around the same brand or price can be grouped for example).

3. Your coupons will use that same GS-1 Prefix.

4. Find a Coupon Design shop… (here is my favorite: http://couponsindemand.com/  Small company, but great service!).  Got a big budget or making a LOT of coupons?  Go to: http://coupons.com  (expensive but good in volume).

5. Build a coupon!  (use their wizard, as understanding the GS1 codes is not easy!).

6. Get (or borrow) some legal text for the front of your coupon… (example: look at any other MFG coupon, and ‘borrow’ the legal verbs from it).

7. Test the coupon!  (be sure to put your street address where the coupon can be redeemed).

8. IF you don’t want to handle processing coupons yourself, get a “clearing house” to do it for you… this is the best one for small companies:  
http://www.mpspromotions.com/ 

9. Good to go!

It really is that easy to do MFG coupons.  You might get some flack from your retailers, so giving them a heads-up is a good idea.  But in general, coupons can be a great thing to reward or motivate your loyal customers or get some new people to try your products.

How to Market a Bad Product

There are Classic Bad Products, such as “New Coke” and “Ben-Gay Aspirin”.  There are also horribly bad Tech Products, such as “RealPlayer” and “SoftRAM”.  There are few things they have in common:They often “borrow” from another brand (Brand/Line extension), such as Ben-Gay Aspririn.

  1. They often “do not perform as advertised”, or are otherwise misleading such as SoftRam
  2. They sometimes are just so annoying to use and so invasive that they are not worth the hassle, such as RealPlayer.
  3. Often, they are all 3!
So, can you market a bad product?
Can you get someone to buy it???
Yes.  All you have to do is figure out “who” the product is really meant for… and a ‘fair’ price for the product delivered (not dreamed).
Is it ethical?  Yes.  You have to change the price (to what is truly delivered), and you have to choose the market (to those that actually need a solution), and if yo do those two things, and make a sale, it is fair.
Can you make a lot of money?  Probably not.  Depending on how bad the product is, you will have to narrow the market to be quite small and reduce the price to where it may not make money (and may actually cost you money to sell it).
How do you market a bad product?  You tell the truth.  Be what you are.  Know who you are for.  And HIDE NOTHING.
Ironically, some people may find that refreshing and buy your product anyways… certainly if you can “find the niche” that the product has some use for.
Here are some examples from some Classic Bad Products:
  1. New Coke.
    1. this is a ‘brand extension’…  and uses the new coke brand…. unfortunately Coke tried to make “ALL MARKET” accept this as a brand replacement. (Bad Idea!)
    2. As a brand extension though, New Coke, could have been marketed beside “Coke” as a different flavor, a flavor targeted at younger folks, or targeted at Pepsi lovers.
    3. Given that kind of target market, it might have found a niche.
  2. Microsoft Zune.
    1. Microsoft COULD have carved out a DIFFERENT target market or audience with Zune.  E.g. perhaps Zune was an MP3 Player for Senior Citizens?
    2. Ironically, marketed like that you might have charged “more” for the Zune.
  3. SoftRAM.
    1. Yes, it mislead folks about that it was… but… it also kinda-worked!
    2. SoftRAM could have priced itself as a $0.99 utility to tweak Windows.
    3. They might have sold Millions!  (and not been the target of FTC investigations).
    4. The could have targeted people with extra HD capacity…. or perhaps Housewives… or ‘old PC owners’….
    5. Being HONEST about what they are and are not would have been key
So, my top list of “Bad Products”…  here you go… 
  1. Canned Chicken  –  It’s disgusting.  I am not in the target market.
  2. Windows Mouse – It was terrible, and required a driver install.  Utter fail.  Not worth the price.
  3. Thin Black Socks – They are uncomfortable and do not last long.  Hate those socks  (I’m not the target market)
  4. Playstation 3 – Horrible quality.  Breaks so easy.  Not worth the price.
That’s just a few…. but every one of those DOES have a market somewhere, and a price.
(you just may have to PAY ME to wear those thin black socks).

Austin Technology Incubator SEAL team Presentation

Occasionally, I am invited to speak at The University of Texas or at the Austin Technology Incubator (part of U.T.).  I love giving talks, guest lecturing, or speaking, and this weeks topic was for the SEAL program on “Startup Sales & Marketing”… an expertise of mine.  I usually just “wing it”, but today I brought slides.  And here they are attached below for your convenience and reference!

If you have ever wanted a 1-stop reference for Sales & Marketing advice at a Startup, I hope you enjoy theses slides.  Feel free to share with reference to the author (Harlan T Beverly) and my blog (tytusblog.blogspot.com).

Enjoy the Slides -> Click Here!

Proving a Marketing/Sales Model.

How do you prove anything?  Very,very difficult from an engineering perspective.  Instead, how about “verifying a hypothesis”.  In other words… create an H0 hypothesis about your sales & marketing strategy… then; test that hypothesis, and most importantly measure the results closely.

If you can say that your hypothesis works, then do the hard part: try to scale it up!  (wow, that can be tough).

So many companies think: well I’ll get X customers, and then I’ll be at a critical mass and then my model will be Y.  The problems… how do you get to X customers?  How do you know what will happen when you get there?

Instead, I focus on getting to x customers (note the smaller x), and prove that the model works at x.. (e.g. the business is profitable at x).  Then, I slowly scale up towards X.  If Y happens, great… but my X is still my x and that’s good enough for a profitable business.

Go x yourself.

Know how you plan to grow!

Here’s the deal.  If you have a business, and you don’t have a plan for how to grow.. you are already failing.  You need to at least have a hypothesis by which you believe you can achieve SCALE-ABLE GROWTH.  And there is not reason to not grow.. here are the top strategies.. the key is always test (“Is your strategy working?”):

  1. you will grow by viral behaviour.  Once you get a boost of new players, you will auto-grow because your virality is above 1.0.
  2. you will grow by advertising.  You make enough profit $$ per item/customer (after acquisition costs) that it justifies continued ramped up investments in advertising.
  3. you will grow by retention and word-of-mouth.  Similar to virailty, but more personal.  you will retain your customers so well, they keep buying more and more and even bring friends occasionally.
  4. you will grow by ‘free’ marketing.  People are searching for what you got, and your SEO will help them find you in a scalable fashion. (p.s. this is very difficult)
  5. you will grow by hiring a sales-force and hunting out the best customers.
What’s your strategy?
Got any others to add to this list?

Learn Quickly the Cost of Acquiring a Customer

One of the most common advice I give to aspiring entrepreneurs about their business plans is to Learn as fast as possible the true cost of acquiring a customer.  Why?  It tells you quickly how viable your business is AND helps you to focus your message.

One of the easiest ways to do this is to run a test ad campaign with several simple landing pages.  Can you convince some (hopefully targeted) web traffic to convert into interest? Can you convince them to become a buyer?  How much did it cost to get 10 customers?  (divide that cost by 10 and you have a rough idea how much it will cost to acquire customers in the future).  Too high?  Consider A/B Testing new landing pages, or being more targeted… or maybe even improving the offering (the product).

Get Busy!  Test. This book (which I thought was quite good, especially for engineer-type thinkers) may help:
http://37signals.com/rework/

Summary from my Entrepreneurship Speech at The University of Texas: Austin Technology Incubator

Sometimes I wish I had a little camera the followed me around taping some of my ranting/speeches.  Would certainly save time having to type anything up!  Usually I speak about either Marketing or Entrepreneurship; so when I was asked to speak on “What it’s like to be an Entrepreneur” at The University of Texas: Austin Technology Incubator I thought I knew just what to say…. but after some thought I realized, the usual crap people say about Entrepreneurship is just flat wrong.  Hard work WILL NOT win the day.  An awesome idea is NOT the way to success.  What is needed is 1 skill: Sales.

I began this speech saying that I wasn’t going to say the usual stuff about Entrepreneurship.  Yes, you’ll be poor for a bit, and yes, you’ll work hard, etc.  But in truth to be a successful entrepreneur all of that barely matters; what matters is:

  1. Sales (your ability to sell product/service/and STOCK).  
  2. Presentation/Showmanship (your ability to present ideas and put the best foot forward; even when sometimes “THERE IS NO FOOT”.
  3. Persistence (your ability to NOT QUIT, even when everyone around you [especially potential investors] make it seem hopeless.
Theses skills can all be learned and practiced, and here are a few “Sales books” that I think are really, really good:
Sales Dogs: A great intro to sales and YOUR personality for sales.
Sales Bible: Amazingly good book filled with tactics and skills you NEED to learn to be good at sales:
I also went into great detail about the organization of VC funds (their management structure and decision making process), and also some small bit about my Laser-beam-Shotgun approach to fundraising!
More on those topics soon.