Competition: Friend or Foe

If you don’t have competition, you don’t have a market.   Often we run into entrepreneurs who tell us they have no competition.  Comments like “we do it so different than others that we don’t consider them competition.”  This may be possible, you are the only company that does it this way or your product is the first to market with something.  Without competition, you have no one to compare your offerings to. 

Know your competition as well as you know yourself.  Get to know their personality.  How do they sell?  Are they reactive?  Are they the market leader?  Do they consider you a competitor?  Who else is a competitor?  When you can answer these questions then you will be prepared to compete.

Look for uniqueness and how that translates to value.  Make this so important that customers would not consider buying something else.  Your product will always have its USP’s, sometimes these fit into a particular market sector.  Use these when choosing a market and make them a “have to have” for your prospect. 

It sounds simple, but a sales strategy should be geared to win all of the time on your chosen market, most of the time in a second market and some of the time in a third market can be very effective.  If your competition comes after you in your primary market, they will expend resources going after deals with low probability of winning.  At times like these you can learn a tremendous amount about your competition because they are working extra hard to try and get this business.

Your competition will also be important in determining the value of your company.  Value is based on performance and market size.  Multiple competitors in a growing market create growth and excitement.  When one exits it starts to establish value. 

Treat your competition with respect; they help you build your market.  If they market well, you will get in more deals, learn when you can win and you will grow.  Your competition will help you determine what markets you will serve.  Know them well, learn to compete but remember they are essential to success.  

Growing Your Business

You are building a company, things are going well, and you need continued growth, continued excitement in your market and prove your contemporary business model. Your biggest worry is how to scale your operation. Direct sales are risky and expensive, geographic expansion requires localization and product investment and partnerships take time to nurture and pay off.

With all of these challenges how do we build an effective sales operation to take us to the next level? This is not an uncommon problem. All technology companies face it some point during their evolution. Whether it is picking the right sales reps, serving the right markets, or selecting the right partners, you need to stay focused on your core competence and plan your opportunities.  Stay away from the common pitfalls and get help from people who have successfully done it before.

The first question to ask your team; is our offering scalable? Most companies think of stability in terms of product performance and quality, though important for growth this is assumed. Your offering is scalable when messages are simple and your value proposition is easily understood. Your offering should have a straight forward implementation and should quickly integrate with larger solutions. When you have achieved this, then your offering is repeatable. When repeatable it becomes easy to train new reps, expand to new geographies and partner with companies that will integrate your product into their solutions.

It starts with messaging. Are your messages simple? Can you articulate your value proposition in a minute? Is it repeatable in targeted vertical markets? Do you have proof statements to back up your claims? It is very important to get his messaging crisp. When you go to market with a direct sales model, your good sales reps can overcome messaging problems at the point of sale, but these models don’t scale. Remember that direct sales reps sell your product many times, the customer buys only once.

If you have a configurable product that suits many purposes for many people, you will need to package and price solutions to show tangible benefits to end users. Once installed, expansion opportunities will emerge through good account management. Good messaging is the foundation of effective outbound PR. Outbound PR will gain influencer mindshare, company and product awareness and most importantly attract new selling partners. Good crisp messaging makes your offering scalable shortening direct sales cycles and jump starting the partnering process.

The scaling of your operation requires collaboration with the whole operations team. It involves listening to what is happening in sales situations, tracking your competition then projecting your core competence. This will help you choose your vertical markets, drive product development and align with solution partners. This sounds straight forward, but there is many pitfalls along the way. Staying focused requires a plan that can be executed by the entire operations team. The best operations are plan driven and process managed, allowing you to constantly measure and manage progress, make adjustments and learn from your actions.

Sales and Channels Execution

Direct Sales: Hiring direct sales can be risky. It takes time to train and build a book of business. It is important to develop a sales rep profile. The profile is important, moving too far away from it will produce poor results. An empty apartment is better than a bad tenant.

When hiring executive sales management, be sure you understand how they fit into your expected profile & company culture, because more than likely,  they will bring in their own team of sales people who behave similarly.  By nature, sales people tend to yell the loudest. Are they Theory X take no prisoners type guys, or do they have a more collaborative style. An interview does not always show these traits & is important to understand what you are in for before you bring in a new sales team. If not, your entire organization may suffer.

Other than references, one simple way to find out more about an important hire is to bring them out for a round of golf. You would be surprised what you can learn about someone’s style in a 6 hour pressure packed round of golf!

Make sure that the sales compensation plans are aligned with company business plans. Make sure that territories are clearly defined to avoid channel conflict with other reps and selling partners. Define the sales process and assign resources based on process steps. This will encourage information sharing and opportunity qualification. All this information should be contained in a collaborative sales tracking & forecasting system that all company stake holders have access to.

Geographical Expansion: Europeans like to buy from Europeans. A successful sales group in the US may not succeed in Europe.  Look for talent that has been successful selling similar products in the foreign territory.  It is important that they have contacts and the ability to bring in good people. Look for expansion through American multi-national companies to get local references.

 Partnering: Choosing partners can be very difficult. Analysts can be very effective at suggesting potential partners and making introductions.  Ask your customers what service providers they use. Look at your competitions, who do they partner with? Partnership include, selling partners that sell with you, OEM partners who embed your solution in their offerings and technology partners which extend your solution. To gain revenue through partners you must understand how they sell and get paid. Are they vertically aligned and is your vertical alignment similar. Are you speaking with the right people, you can spend a lot of cycles chasing a marketing relationship. Follow the money, sell with your partner. Check your contacts with analysts or other influencers to see if you are speaking with the right people.

Be sure the compensation plans for your direct sales teams are in line with your channel objectives. Compensation drives behavior. Do not create compensation plans that are destructive to your channel objectives. Find a compelling reason to partner. Make sure that your joint value helps them win deals. Make sure they understand how the partnership makes them more competitive.  Never get stuck in a program.

There is a lot to do, and if you can do it quickly you will beat your competition. Who is your coach? Palladin can help. Our partners have lived this problem at many companies in different roles. We can help you through the process rolling up our sleeves, working with you, sharing contacts and giving you the benefits of our experience. Why can we help, because that what we do? Go to our Website, then please give us a call.

Plan for a 60 minute game !

The Patriots are 18-0, why?  Because they play every game the entire 60 minutes.  The teams that have been close and took them into the 4th quarter, lost because they couldn’t stay focused for the entire game.  Why do the Patriots play 60 minutes? Experience.  They have a game plan and they run to it, making minor adjustments as they see what their competitors throw at them. Business is the same, management teams have to play 60 minutes and it all starts with a good game plan.  How many times do businesses panic and lose focus, away from their plan and travel down wrong paths.  Your number one competitor gets bought by a gorilla, how do you react, how do you leverage it to move your message forward.  Who can you get to help you get out this message and how does this affect your plan. You launch a new partnership, how will your competitors react?  How will your sales force leverage the partnership and how will the market react?

All of these events are predictable and should be part of a plan, as they happen, they should be considered market validation.  It is all part of the planning process. How a team reacts to these events will determine whether they will play 60 minutes or lose focus in the 4th quarter.

Trouble in Paradise

As consultants, we work with a variety of companies ranging from start ups, to the very large, in growth & in troubled conditions. One common thread we often see in both environments is a lack of  coordination between the strategic business plan & the companies operational, organizational & individual plans. Or worse yet, there are no plans at all, just really bright founders, sales teams with polished resumes & a potentially hot product.

This lack of coordinated planning can really sink a company. They have truly left port without a compass. Only a stroke of luck will get them to their desired destination.

It is easier to get this point across to executives at troubled companies. Getting it across to executives & investors at emerging growth & fast growing companies is another matter.  Why? In the latter, early on sales are brisk with their products & services flying out the door. Everything appears hunky dory. It’s a cash bonanza for everyone!

However, most likely, competition will eventually creep in, market conditions will change, & growth will slow. Without factoring these variables into your companies overall plans, it may be hard to recover.  Is it a product problem? A marketing problem? A sales problem? It will be tough to know since there is no orchestrated plan.

As a result, like in troubled environments, even these companies will begin to stagnate.  The deer in the headlights gaze will start to appear at company meetings as customers, executives, sales reps & investors begin to abandon ship for the life boats. Death is in the air. The industry is littered with great ideas gone by the wayside or sold off at bargain basement prices.

Only companies who are dedicated to coordinating their plans between all four phases: strategy, operations, organizationally & individually –  will be in a position to make seamless mid course corrections. Your customers, partners, employees & potential acquisition candidates will understand your mission. You will be rewarded in the marketplace by your consistency.

This does not mean companies should remain inflexible to their plans to take advantage of opportunistic events.  However an ongoing selling, marketing & operational du jour process is a recipe for disaster in the long term.

Branding

1. Brand your product or brand your company.
2. Don’t mix company messages with product messages.
3. Your company is about it’s people & what you offer.
4. Your product is about what you deliver for money & how it helps your customer.

Outbound PR – “key event management”

1. Your number one competitor gets bought by a gorilla,  when a gorilla enters,there is no oxygen left in the room.
2. Leverage the event to get your messages across
3. Leverage it to move the ball on partnerships.
4. Leverage it to gaun more attention.
5. Leverage it to validate your market.

Hiring Sales Reps

1. Create a profile & stick with it, don’t compromise, an empty apartment is better than a bad tenant !
2. Be honest in the challenge ahead.
3. Compensation drives behavior, they are important!
4. Good reps are hard to find, but if one is not working out, cut your losses with a “walk in the woods” with them.
5. Listen to pre-sales consultant’ s feedback on reps.
6. Sales tools have to be ready.

Vertical Sales & Marketing Strategies

1. Align your verticals with your partner verticals
2. Vertical alignment is about packaged solutions, show value, package & price so they can easily be sold by both your folks & partners.
3. Avoid channel conflict at the rep level, begin vertical alignment with presales folks, communicate with product management, build real solutions.
4. Compensation drives behavior, be sure your comp plans incent your reps to work with partners, not compete with them.
5. Have strong references for the packaged solutions with real ROI.
6. Start with two or three & get them going
7. Vertical solutions will help you scale your offerings with partners

An Effective Partner

1. Avoid the 68 relationship, always get something in return.
2. Don’t be put into a partner program, paying fees to be a partner satisfies their quota not yours.
3. Figure out why they should partner with you & convince them of the value.
4. Share contacts, but only if you get good leads in return.
5. Check contacts with analysts to make sure they can perform.
6. Use your analyst partner to begin the relationship.
7. Only partner with companies compatible to your exit strategies.