Jul 182013

Book Short: The Little Engine that Could

Book Short:  The Little Engine that Could

Authors Steven Woods and Alex Shootman would make Watty Piper proud.  Instead of bringing toys to the children on the other side of the mountain, though, this engine brings revenue into your company.  If you run a SaaS business, or really if you run any B2B business, Revenue Engine:  Why Revenue Performance Management is the Next Frontier of Competitive Advantage, will change the way you think about Sales and Marketing. The authors, who were CTO and CRO of Eloqua (the largest SaaS player in the demand management software space that recently got acquired by Oracle), are thought leaders in the field, and the wisdom of the book reflects that.

The book chronicles the contemporary corporate buying process and shows that it has become increasingly like the consumer buying process in recent years.  The Consumer Decision Journey, first published by McKinsey in 2009, chronicles this process and talks about how the traditional funnel has been transformed by the availability of information and social media on the Internet.  Revenue Engine moves this concept to a B2B setting and examines how Marketing and Sales are no longer two separate departments, but stewards of a combined process that requires holistic analysis, investment decisions, and management attention.

In particular, the book does a good job of highlighting new stages in the buying process and the imperatives and metrics associated with getting this “new funnel” right.  One that resonated particularly strongly with me was the importance of consistent and clean data, which is hard but critical!  As my colleague Matt Spielman pointed out when we were discussing the book, the one area of the consumer journey that Revenue Engine leaves is out is Advocacy, which is essential for influencing the purchase process in a B2B environment as well.

One thing I didn’t love about the book is that it’s a little more theoretical than practical. There aren’t nearly enough detailed examples.  In fact, the book itself says it’s “a framework, not an answer.”  So you’ll be left wanting a bit more and needing to do a bit more work on your own to translate the wisdom to your reality, but you’ll have a great jumping off point.

Filed under: Books, Business, Marketing, Sales

Apr 042013

The Nachos Don’t Have Enough Beef in Them

The Nachos Don’t Have Enough Beef in Them

Short story, two powerful lessons.

Story:  I’m sitting at the bar of Sam Snead’s Tavern in Port St. Lucie, Florida, having dinner solo while I wait for my friend to arrive.  I ask the bartender where he’s from, since he has a slight accent.  Nice conversation about how life is rough in Belfast and thank goodness for the American dream.  I ask him what to order for dinner and tell him a couple menu items I’m contemplating.  He says, “I don’t know why they don’t listen to me.  I keep telling them that all the people here say that the nachos aren’t good because they don’t have enough beef in them.”  I order something else.  Five minutes later, someone else pounds his hand on the bar and barks out “Give me a Heineken and a plate of nachos.”  The bartender enters the order into the point-of-sale system.

Lesson 1:  Listen to your front-line employees – in fact, make them your customer research team.  I’ve seen and heard this time and again.  Employees deal with unhappy customers, then roll their eyes, knowing full well about all the problems the customers are encountering, and also believing that management either knows already or doesn’t care.  Or both.  There’s no reason for this!  At a minimum, you should always listen to your customer-facing employees, internalize the feedback, and act on it.  They hear and see it all.  Next best prize – ask them questions.  Better yet – get them to actively solicit customer feedback.

Lesson 2:  Always remember another person’s person-ness, especially if he or she is in a service role.  The old story about the waiter spitting and coughing in the obnoxious customer’s soup would dictate that self-preservation, if nothing else, should inspire civility towards people who are serving you, be it a B2B account manager or a waiter in a diner.  Next best prize – self-interest to get a higher level of service.  Better yet – engagement and kindness like you’d want people to show you.  Chances are, they’re trying to make your day a bit better.  Shouldn’t you try to do the same for theirs?

(Lesson 3:  Always listen to your bartender!)

Filed under: Business, Management, Sales

Nov 152012

Book Short: The Challenger Sale

Book Short: The Challenger Sale

I’ve written a couple times in the past about how we sell at Return Path.  I’ve written about our principle sales methodology for the past decade, SPIN Selling, by Neil Rackham (and Major Account Strategy, also by Rackham, which is basically SPIN Selling for Account Managers), which focuses on a specific technique for solution selling by using questioning to get the prospective client to identify his or her own needs, as well as Jeffrey Gitomer’s two short books, the Little Red Book of Selling and Little Red Book of Sales Answers, which are long on sales questioning techniques.  And I also wrote this post about another book called Why People Don’t Buy Things, by Kim Wallace and Harry Washburn.  The great thing about this book is that it dives into the need for variation in sales communication strategies based on BUYER personae, such as The Commander, The Thinker, and The Visualizer.

While both these principles are good – asking questions and tailoring communication styles based on the buyer – anyone who has ever tried to run a whole sales call by asking questions knows that it’s REALLY HARD and can sometimes just outright flop.  There’s a new movement that I’ve been reading articles about for a few months now called The Challenger Sale, and I finally finished the book about it this past week.

If you run a company or a sales team that has any kind of complex sale or a hybrid software/service model, then you should read The Challenger Sale: Taking Control of the Customer Conversation, by Matthew Dixon and Brent Adamson.  Whether you adopt the methodology or not, there are a few really great insights in the book that will help you recruit and manage a sales team.  Some of the insights include:

  • Understanding the five types of sales reps and why/when they’re successful/not successful.  The labels are telling in and of themselves:  the Lone Wolf, the Hard Worker, the Relationship Building, the Reactive Problem Solver, and the Challenger
  • Why sales reps can be trained as Challengers, and how important it is to rally an entire organization around this sales model, not just train sales reps on it (that’s probably a good reminder for any sales methodology)
  • The ingredients of the Challenger sale – Commercial Teaching for Differentiation, Tailoring for Resonance, Taking Control of the Conversation.  I found the section on Commercial Teaching the most enlightening, particularly in our business, where we’re not selling an established category with established budget line items

The Challenger Sale feels like the beginning of a wave that will take over a lot of selling organizations in the next decade, either directly as written or as it inspires ancillary works and related techniques.  For that reason alone, it’s worth a read.

Mar 152012

Canary in a Coal Mine

Canary in a Coal Mine

From Wiktionary:  An allusion to caged canaries mining workers would carry down into the tunnels with them. If dangerous gases such as methane or carbon monoxide leaked into the mine-shaft, the gases would kill the canary before killing the miners.

Perhaps not the best analogy in the world, but I had an observation recently as we took on a massive new client:  over the years, Return Path has had a handful of “bellwether” clients that I’ve jokingly referred to as the canaries in our proverbial coal mine.  In the really early days of the business, it was eBay.  When we first started working with Email Service Providers, it was the old DoubleClick.  A couple years ago, it was a giant social network.  Now, it’s a social commerce site.

These kinds of clients help us break new ground.  They stretch us and get us to do things we had either never done before, or things we didn’t even know we could do.  And they are canaries in the coal mine, not because either they or we die, but because they are the clients who have the most complex and high-volume email programs who run into problems months or years before the rest of the world does.  So we solve a given problem for them, and as painful as it might be at the time, we learn and iterate and then anticipate for the rest of our client base.

I’m not sure I have a lot of advice on how to handle these clients.  The relationship can be tricky.  The best thing I’ve found over the years is to let them know that they are stretching the organization, but that you are working hard for them and will hit certain deadlines or milestones.  There’s no reason to overpromise and underdeliver when you can do the reverse.  Then of course you do have to rally the troops internally and deliver.  And of course produce regular post-mortems to institutionalize learnings for the future.

Feb 232012

Just Say No

Just Say No

An OnlyOnce reader submitted this story to me a couple months ago:

Went to a small, high-end restaurant last night. There were ~10 people there when our party of 9 arrived. Another group of 10 arrived soon after – amusingly, the chef declined to allow them to be seated. I asked him why afterwards – he turned down at least $1,000 worth of business. (like 30% of what he could have made that night).

His answer : Our quality would have suffered, and then they would have walked away thinking less of us.

Wow. What a revolutionary idea. Turning down money in light of maintaining your reputation and quality of service.

I’ve had this experience before — have you?  It’s a phenomenal statement, full of courage, and also common sense.  But how often do we entrepreneurs practice it as oppose to just saying “more more more” when presented with revenue opportunities?  This is particularly difficult in the early stages of a business’ life, when customer dollars are harder to come by.  But probably worth doing 9 times out of 10.

Filed under: Business, Sales

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Dec 012011

The Ultimate Sales Job

The Ultimate Sales Job

In a moment of productive tension a couple months back, one of my sales people said to me, “What do you know about selling?  You’ve never carried a bag in your life!”  Technically, the sales person was correct — I’ve never been a member of a sales department.  But as a product manager, GM, and CEO over the last 17 years, I have actually spent a significant of time directly selling customers.  But this comment got me thinking about the role of a CEO and just how much of a sales job it is.

My conclusion:  it’s not a just a sales job, it’s the ultimate sales job!  Why?

  • Assisting on sales calls is the most obviously basic sales component to the job.  While some CEOs are more “in the market” than others, and even ones who are active with customers and prospects don’t do it every day, most CEOs that I know have either closed or assisted their sales reps on scores of deals
  • Articulating a vision for where the company is headed is selling to the team and building consensus that keeps everyone’s eye on the ball
  • Raising money to start or expand the business is selling the company, the vision, the management team, and the market to investors (some of the world’s toughest customers!)
  • Recruiting talented employees is selling that same vision as well as your leadership capabilities to a prospective member of your team
  • Speaking at conferences and trade shows maybe a subtle form of sales, but it usually involves presenting the image and expertise you want to present to be “on message” to drive new business in the door
  • Building strategic partnerships is similarly selling a potential partner on how you can channel the core assets of your business to work for the partner company

In the end, most successful startups end up either going public or getting acquired.  Selling the actual company — now that’s the ultimate sales job within the ultimate sales job.

Nov 032011

Learning to Embrace Sizzle

Learning to Embrace Sizzle

One phrase I’ve heard a lot over the years is about “Selling the sizzle, not the steak.”  It suggests that in the world of marketing or product design, there is a divergence between elements of substance and what I call bright shiny objects, and that sometimes it’s the bright shiny objects that really move the needle on customer adoption.

At Return Path, we have always been about the steak and NOT the sizzle.  We’re incredibly fact-based and solution-oriented as a culture.  In fact, I can think of a lot of examples where we have turned our nose up at the sizzle over the years because it doesn’t contribute to core product functionality or might be a little off-point in terms of messaging.  How could we possibly spend money (or worse – our precious development resources) on something that doesn’t solve client problems?

Well, it turns out that if you’re trying to actually sell your product to customers of all shapes and sizes, sizzle counts for a lot in the grand scheme of things.  There are two different kinds of sizzle in my mind, product and marketing — and we are thinking about them differently.

Investing in product sizzle (e.g., functionality that doesn’t actually do much for clients but which sells well, or which they ask for in the sales process) is quite frustrating since (a) it by definition doesn’t create a lot of value for clients, and (b) it comes at the expense of building functionality that DOES create a lot of value.  The way we’re getting our heads around this seemingly irrational construct is to just think of these investments as marketing investments, even though they’re being made in the form of engineering time.  I suppose we could even budget them as such.

Marketing sizzle is in some ways easier to wrap our heads around, and in some ways tougher.  It’s easier because, well, it doesn’t cost much to message sizzle — it’s just using marketing as a way of convincing customers to buy the whole solution, knowing the ROI may come from the steak even as the PO is coming from the sizzle.  But it’s tough for us as well not to position the ROI front and center.  As our Marketing Department gets bigger, better, and more seasoned, we are finding this easier to come by, and more rooted in rational thought or analysis.

In the last year or two, we have done a better job of learning to embrace sizzle, and I expect we’ll continue to do that as we get larger and place a greater emphasis on sales and marketing — part of my larger theme of how we’ve built the business backwards.  Don’t most companies start with ONLY sizzle (vaporware) and then add the steak?

Sep 222011

Who Are Your CPO and COO?

Who Are Your CPO and COO?

Every senior management team needs a CPO and a COO.  No, I’m not talking about Privacy and Operations.  I’m talking about Paranoia and Optimism.  On my leadership team at Return Path, many of us are Paranoid and many of us are Optimistic, and many of us can play both roles.  But I’m fortunate to have two business partners who are the Chiefs – George Bilbrey is our Chief Paranoia Officer, and Anita Absey is our Chief Optimism Officer.  Those monikers fit their respective roles (product and sales) as well as their personalities.

My view is simple – both traits are critical to have around the management table, and they’re best when they’re in some kind of equilibrium.  Optimism keeps you running forward in a straight line.  The belief that you can successfully execute on your plan, with a spring in your step and a smile on your face, is very motivating.  Paranoia keeps you looking around corners.  It may also keep you awake at night, but it’s the driving force for seeing potential threats to the business that aren’t necessarily obvious and keeping you on your toes.  I wrote about the benefits and limits of paranoia (with an extreme example) years ago here.

Too much of either trait would be a disaster for a team’s psyche.  But both are critical points of view that need a loud voice in any management discussion.  It’s a little bit like making sure your management team knows its actual and target location along the Fear/Greed Continuum.

Aug 112011

Peter Principle, Applied to Management

Peter Principle, Applied to Management

My Management by Chameleon Post from a couple weeks ago generated more comments than usual, and an entertaining email thread among my friends and former staff from MovieFone.  One comment that came off-blog is worth summarizing and addressing:

There are those of us who should not manage, whose personalities don’t work in a management context, and there is nothing wrong with not managing.  Also, there promotion to management by merit has always been a curiosity to me. If I am good at my job, why does it mean that I would be good at managing people who do my job? In other words, a good ‘line worker’ doth not a good manager make. I’d prefer to see people adept at being team leads be hired in, to manage, then promotion of someone ill-fitted for such a position be appointed from within. This latter happens far to often, to the detriment of many teams and companies.

For those of you not familiar with the Peter Principle, the Wikipedia definition is useful, but the short of it is that “people are promoted to their level of incompetence, when they stop getting promoted…so in time, every post tends to be occupied by an employee who is incompetent to carry out their duties.”

Back when I worked in management consulting, I always used to wonder how it was that all the senior people spent all their time selling business.  They hadn’t been trained to sell business.  And a lot of the people great at executing complex analysis and client cases hated selling. Or look at the challenge the other way around:  should a company take its best sales people and turn them into sales managers?

We’ve had numerous examples over the years at Return Path of people who are great at their jobs but make terrible, or at least less great, managers.  The problem with promoting someone into a management role mistakenly isn’t only that you’re taking one of your best producers off “the line.”  The problem is that those roles are coveted because they almost always come with higher comp and more status; and if a promotion backfires, it generally (though not always) dooms the employment relationship.  People don’t like admitting failure, people don’t like “moving backward,” and comp is almost always an issue.

What can be done about this?  We have tried over the years to create a culture where being a senior individual contributor can be just as challenging, fun, rewarding, impactful, and well compensated as being a manager, including getting promotions of a different sort.  But there are limits to this.  One obvious one is at the highest levels of an organization, there can only be one or two people like this (at most) by definition.  A CEO can only have so many direct reports.  But another limit is societal. Most OTHER companies define success as span of control.  You get a funny look if you apply for a job with 15 years of experience and a $100k+ salary yet have never managed anyone before.  After all, the conventional wisdom mistakenly goes, how can you have a big impact on the business if all you do is your own work?

The fact is that management is a different skill.  It needs to be learned, studied, practiced, and reviewed as much as any other line of work.  In most ways, it’s even more critical to have competent and superstar managers, since they impact others all day long.  Obviously, people can be grown or trained into being managers, but the principle of my commenter – and “Peter” – is spot on:  just because you are good at one job doesn’t mean you should be promoted to the next one.

I’m not sure there’s a good answer to this challenge, but I welcome any thoughts on it here.

Jun 092011

Sometimes, Things Are Messy

Sometimes, Things Are Messy

Many people who run companies have highly organized and methodical personality types – in lots of cases, that’s probably how they got where they got in life.  And if you work long enough to espouse the virtues of fairness and equality with the way you manage and treat people, it become second nature to want things to be somewhat consistent across an organization.

But the longer we’re in business at Return Path and the larger the organization gets, the more I realize that some things aren’t meant to fit in a neat box, and sometimes inconsistency is not only healthy but critical for a business to flourish.  Let me give a few examples that I’ve observed over the past few years.

  • Our sales team and our engineering team use pretty different methodologies from each other and from the rest of the company in how they set individual goals, monitor progress against them, and compensate people on results
  • The structure of our sales and service and channel organizations in Europe are very different from our emerging ones in Latin America and Asia/Australia – and even within Europe, they can vary greatly from country to country
  • Although we have never been a company that places emphasis on job titles, our teams and leadership levels have become even more inconsistent over the years – sometimes a manager or director has a bigger span of control or more impact on the business than a VP does, sometimes individual contributors have more influence over a broad section of groups than a manager does, etc.

It’s taken me a while to embrace messiness in our business.  I fully acknowledge that I am one of the more hyper-organized people around, which means this hasn’t come naturally to me.  But the messiness has been very productive for us.  And I think it’s come from the combination of two things:  (1) we are a results-oriented culture, not a process-driven culture, and (2) we give managers a lot of latitude in how they run their teams.

I’m certainly not saying that striving for some level of consistency in organization is a bad goal – just that it’s probably not an absolute goal and that embracing messiness sometimes makes a lot of sense.  Or perhaps phrased more actionably, allowing individual managers to use their own judgment and creativity in setting up teams and processes, as long as they follow high-level guidelines and values can be an incredibly productive and rewarding way of maximizing success across an enterprise.

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