Sales and Marketing Performance Blog

Selling with IMPACT: a guide to selling disruptive technology.

Posted by Mark Gibson on Thu, Nov 06, 2014

If you subscribe to current research, buyers are contacting vendors at somewhere between 60-70% of the way through their buying process.  What this research fails to mention is this only applies to mainstream technology that is in established markets and where there is an identified and known set of competitors. 

Buyers enter the buying process depending on technology maturity and buyer risk tolerance. I like to use the IMPACT mnemonic to describe buying cycles because I think it more accurately reflects what is actually going on in the buying organization

IMPACT The six phases of the buying process are easy to remember as they will have an enormous IMPACT on your company’s performance:

There are the Early Adopters (EA) who are happy buying innovative solutions. There are the Early Majority (EM) who want to buy the market leader. And there are the Late Majority (LM) who want to buy a commodity at the cheapest price. Here is where the buyer starts to engage in terms of the IMPACT process.

Early adopters will enter the buying process at 10-20% of the way through a buying process and laggards will wait till they are 90% of the way - and all they care about is price or the service discount.

Successful entrepreneurs, marketers and salespeople selling disruptive technology must learn to recognize early adopters, understand how early adopters engage with innovative technology vendors and how they manage a buying process. 

This is the subject of a new eBook from authors of “Why Killer Products Don’t Sell”, Ian Gotts and Dominic Rowsell, and Adrian King, entitled “IMPACT - the technology executive’s guide for selling B2B disruptive and innovative solutions”.  

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Topics: killer products, selling early adopters, lean startups

Start-up Sales VP Regrets - I wish I had done this 2 years ago

Posted by Mark Gibson on Tue, Feb 14, 2012

I had dinner with a Sales VP of an early stage technology company this week and discussed her business and her experience in building the startup revenue stream. We got down to talking about "the how" of building the sales team, recruiting the channel and generating revenue.

They now have 6 people in sales globally and their resellers are starting to sell their product, although she mentions it was a painful process in getting there.  

Cash-burn and Unpredictable Revenue

The problem isn't lack of revenue as much as predictable revenue; it's that in one quarter we have a million dollar deal and blow the number out and the next quarter we're scrambling to bring in $500K....does this sound familiar?

The big problem now is cash-burn and with 40+ people in the company and investors who want to accelerate the growth, she is feeling the pressure.

Slow out of the Gate

"We were slow out of the gate. We have great technology, but it was disruptive 3 years ago and still is. There was no demand for the product and no buying category, so we had to create it, one deal at a time. Since then the smartphone market has exploded and most of our sales now relate to mobile and we are starting to get inbound leads."

Leads from Investors, Cold Calls, Trade Shows

I asked how they went about generating early leads. "In the first year we relied on introductions from our investors, who are very well respected and connected in the Valley. We also worked our personal connections and found our initial set of customers who validated our approach and gave us really good feedback.
We had a Wordpress blog from the outset, although it was all about us and the product, and it wasn't generating many leads. Targeted trade-shows were useful in generating leads, particularly with OEM's and resellers. The second year we hired a couple of sales people and started calling who we thought would be high probability customers."

I asked about how the sales team engaged prospects "Today the sales process starts with a free download of the tools. The sales team will then follow the lead up with a conversation and if qualified a short PowerPoint presentation to stakeholders in IT. If that goes well we then put together a proposal.

When I explained how we help companies to create clarity in positioning and capture the value in using complex products and services for both inbound marketing purposes and for visual storytelling using our Visual Storytelling method, she exclaimed... "I wish I had done this two years ago."

Take-Aways

  1. It's an order of magnitude easier to resegment an existing market than it is to start a new one. Steve Blank
  2. Selling discontinuous technology to early adopters requires a different sales approach than selling mainstream products.  Early adopters have a higher tolerance for risk and are prepared to engage potential suppliers earlier in the buying cycle. The big question for most start-ups with novel technology is, would they find you in a Google search?

    Click on the image to learn more about the Four Buying Cultures, the IMPACT buying process and view the Webinar, "Why Killer Products, Don't Sell" 
  3. It's never too early to start Inbound Marketing. Technology companies can easily put together Websites and link them to social media, but too often I hear we're doing all this Marketing 2.0 stuff, but nothing's working.
    Using an inbound marketing strategy on an integrated inbound marketing platform like HubSpot can accelerate growth, create mindshare in months and typically produce 5-times the inbound leadflow within the first 6 months.
  4.  Kill PowerPoint. You learn nothing when you are presenting. In a start-up every sales call is a learning opportunity. Get everyone in the company using visual confections to tell your story. Figuring out your value proposition early (even if it's a hypothesis) and creating visual stories will help win new clients, recruit new employees, win new investors and recruit partners.

  5.  Putting it all together.
     
New- Selling with IMPACT Whitepaper
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Topics: inbound marketing, visual storytelling, lean startups, steve blank

Using a Whiteboard to get your Killer Product Across the Chasm

Posted by Mark Gibson on Wed, Jun 22, 2011

Early adopters of new technology are prepared to accept more risk when buying technology than the majority of buyers.

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Topics: killer products, whiteboarding, lean startups

The Role of Sales and Marketing Consultants in Start-ups

Posted by Mark Gibson on Sun, May 23, 2010

In the past couple of months I have met with four entrepreneurs, all highly passionate about their products and excited with the potential for them in the market.

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Topics: inbound marketing, marketing messaging, lean startups

Start-up Sales and Marketing Insights and 2010 Priorities

Posted by Mark Gibson on Tue, Mar 09, 2010

CSO Insights have been publishing sales performance data for technology companies for the past 16 years.

This year is the first time they have broken that data set down to include a survey of Start-up sales and marketing performance.  In their 2010 Sales Performance Optimization Survey, a total of 182 startup sales leaders completed the comprehensive survey of all aspects of the sales and business development process.

As a consultancy we focus on solving marketing and sales problems in both start-ups and in established companies. Established firms trying to sell innovative technology to early adopters, have similar problems to startups, except for the cash-flow constraints.

This survey of 182 start-ups of which 60% were based in the USA highlights a number of issues of which we have first-hand experience. We believe the following data are interesting and worthy of discussion.

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Topics: CSO Insights, marketing messaging, lean startups

The Four Steps to the Epiphany and Key to Startup Sales Success

Posted by Robin Russell on Fri, Feb 26, 2010

I Did it My Way

If you were to interview entrepreneurial high-tech CEO's having just sold their companies, or less than successful CEO’s who wound them up, they would provide a great source of information; however their reflections could sound like a lyric from Frank Sinatra's "My Way",  “Regrets, I’ve had a few".

Underachievement of potential is an opinion many investors will have reached on exiting their high-tech investment.

In a conversation with Nic Brisbourne, investment partner at Esprit Capital Ventures in London last week, we concluded that the principal factors causing underachievement are generally people, not product related and the root cause is nearly always poor sales and marketing execution.

In hindsight CEO’s will generally agree that they should have made changes earlier and knowing what they know now, can tell you what they would have done differently.

But what if entrepreneurs had a method or set of best-practices that were proven to create early sales and marketing success in both startups and new product introductions in high-tech companies…would this change the odds of survival and over/underachievement and the value of the company on exit?

I believe it would and am currently reading and absorbing the wisdom and knowledge captured in Steven Gary Blank’s “The Four Steps to the Epiphany”, subtitled "successful strategies for products that win", a book about building successful high-tech companies.

Blank is better known in the US than in Europe, having started 8 companies in CEO or Marketing roles, five of which were IPO’s including names you may remember: E.piphany an enterprise software company, Ardent a Supercomputer company, two semiconductor companies MIPS Computers and Zilog and according to Blank, three very deep craters.

Blank teaches entrepreneurship and Customer Development at UC Berkeley’s Haas Business School, in the Colombia/Berkeley MBA program and at Stanford University at the Graduate School of Engineering.


I love this book!; it’s the best advice I have ever read in one volume for entrepreneurs. So many times through this book I said aloud, “wow if i'd only known this back then…..Blank’s core thesis in building companies is that there are four discrete stages in the process:

1. Customer Discovery

Customer discovery is about finding out if there are customers for your idea and if and what they would be willing to pay for it, before you write a line of code.
This must be done by "getting out of the office" and talking to real potential customers and of course this removes the guess work in initial product specification - as the spec. is the founders vision and the minimum working set required to win first customers (or earlyvangelists as Blank calls them).
Customer Discovery removes pricing risk because prospects tell you what they would be prepared to pay and it removes the hiring and market failure risk of alternate approaches, including the popular "build it and they will come" start-up strategy.
I strongly recommend Ash Maurya's Lean Stack approach to developing astartup business model and minimum viable product, whether doing astartup or incubating a killer product in a large company.

2. Customer Validation

Customer Validation creates a repeatable sales and marketing road map based on the lessons learned in selling (not giving it away) to the first early customers.

These first two steps validate the assumptions in your business model, that a market exists for your product, who your customers will be, the target buyers, establishes pricing, sales process and channels strategy.

3. Customer Creation

Customer creation builds on early sales success and after completion of Customer Validation. Blank states that customer creation is dependent on the market entry type which is governed by the nature of the product - is it a disruptive innovation or a me-too.

Customer Creation strategies define the four types of start-up
* Startups entering an existing market
* Startups that are creating an entirely new market
* Startups wanting to resegment an existing market as a low cost entrant
* Startups that want to resegment an existing market as a niche player

4. Company Building

Company building is where the company transitions from its informal learning and discovery oriented Customer Development team into formal sales, marketing and business development teams to exploit the company's early success.

If you are an entrepreneur or a sales, marketing or business development leader responsible for introducing new products or services, then this book is a must read.

If you click on the book cover above it will take you to Amazon.com where you can order it.

If you are interested in the history of Silicon Valley and the birth of the modern venture capital business, you could watch Steve Blank's one hour video on The Secret History of Silicon Valley...its fascinating and a great presentation.

If you are interested in startup best practice, you could join the lean startup circle group on Linkedin. If you are interested in more ideas on building companies and successful product introductions, you could read the following blogs;

 New- Selling with IMPACT Whitepaper

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Topics: sales performance, lean startups

VC'S Don't Make Bad Investments - How to Sell Killer Products

Posted by Mark Gibson on Wed, Feb 25, 2009

Working with a number of VC's over the past 5 years, I have completed several sales due-diligence assignments. I've developed a healthy respect for the experience, insight and skill that VC's invest in due diligence, prior to making a decision to fund an early stage company.

Most VC's will see more than 100 opportunities a year and invest in a handful, representing the combination of best teams, best products, great business cases and a market receptive for the products.
Ask any VC about their portfolio; most will tell you they have a couple of stars, a whole bunch that are mediocre performers and a few that are dying or that they will wind-up.

Is this Darwinian or the hidden hand of some great technology creator?

What happened to that great investment?

If the due diligence was correct and the product works and there is a market, how come there are so few stars and so many companies struggling to win new accounts after the founders handed over the selling to the professionals?

What if anything can be done about it?

Our business is in improving the performance of early-stage and mid-sized technology companies through aligning sales and marketing messaging around the buyer; creating transparency in sales process; and in teaching people to sell consultatively and to disrupt status-quo thinking.

I was delighted to find and read in "Why Killer Products Don't Sell"by IanGotts and DominicRowsell, a clear and logical explanation of why so many early-stage companies get it wrong. 

Symptoms of a problem?

On an assignment in an early-stage software company last week, with the book fresh in my mind, was not surprised to learn they had hired and fired 5 sales people in the prior 3 years - none of them could sell their product.
There are no competitive products with the same functionality; the founders are still making sales and stress levels are high.
It's a big-ticket product/consulting sale into mobile-operators and requires industry knowledge and contacts, product knowledge, product-usage knowledge, skill in managing the people involved in the decision cycle and most importantly - patience.

So many companies with novel products make the same mistake. It goes something like this; - after the founders have made the first few sales, the owners decide it's time to hit the gas. They raise a funding round to ramp sales against an aggressive target; hire a sales director and team of proven sales professionals. WARNING!

Did anyone specify these sales people will look more like consultants; that they need early-stage or start-up experience; are comfortable calling-high and having business conversations with senior execs about their problems (consultative selling).
In addition, are they capable are of guiding the buyer to envision how they could achieve success using the product and then leading the buyer through their own internal machinations in order to reach a decision and start the buying process? 
According to authors IanGotts and DominicRowsell, symptoms of the problem are:
  • Sales are stalled, you generate plenty of interest, but mainly educate
  • Numerous pilots, but no pull through
  • Big deals keep slipping from one quarter to the next (value-created customer buying cycles have no connection to the quarterly revenue problem)
  • You run out of mates and technology enthusiasts to sell
  • Small incremental sales, but no large follow-on orders
  • You confuse your customer and you have internal arguments about whether you are a consulting company or a product company...(this is irrelevant, to your customers you are a product company).
....does any of this sound familiar?

A Process for Managing the "Value Created" Buying Cycle

One very clear message from the book for VC's and leaders of early-stage companies is to understand and align with the buying behavior of their customers. "The value-created buying culture occurs when the customer senses there is an opportunity, but can't describe it. It takes the supplier to bring it into clear focus and suggest a solution."
Authors Ian Gotts and Dominic Rowsell have created the IMPACT model, which accurately describes the process of how all companies buy. 
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Topics: killer products, lean startups

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