Sales 2.0 Leaders Interview: Solar 2.0 Meets Sales 2.0

I’m publishing a series of Q&A excerpts from my interviews with Sales 2.0 leaders, which will appear in my next book. This is the first excerpt from my interview with Andrew “Birchy” Birch, CEO of Sungevity, a leading provider of home solar-energy systems.

Sungevity is creating Solar 2.0 through Sales 2.0, and proving it is possible to work for social change and make a profit. Birchy worked with my company, Phone Works, to test and implement a customer-focused inside sales system and successfully introduce the principles of Sales 2.0 to the solar-energy industry.

Anneke: There really wasn’t a Solar 2.0 model before; you guys are breaking new ground with how you’re selling. Phone Works applied what we know works in other industries, and then modified that for Sungevity based on customer feedback, results, metrics and measuring.

Birch: It didn’t exist before we implemented it. Some 99.5% of all solar sold in California and across the states is sold by a very labor intensive, unscalable model. The customer goes to the Yellow Pages, online or however they find those installers; they then have to take valuable time to get someone out on the job a few days or weeks later. That experience is incredibly time-consuming, and it increases sales pressure, which makes the face-to-face sales process really intrusive on your life. You’ve got a guy or gal who’s just driven a truck at great expense, and they know they have to close that sale; they’ll push pretty hard.

The great thing about having much more of a pull strategy on the sales side is customers come to you and call the inside sales consultant to request information at their own pleasure and time frame, seven days a week from 8 am until 7 pm. They can get that service with no pressure, so it suddenly becomes a much nicer experience for the customer.

Anneke: Solar 1.0 reps are trying to force a decision in one in-person call. Because solar is still early-adopter territory for most people, they can’t make a decision that quickly. Your approach is not economics-driven. You can avoid the pressured sales approach that is necessary to cover the cost of the face-to-face sales call. You call that visit a “truck roll,” right? How much does that cost?

Birch: The cost of doing that truck roll generally adds up to about 10% of the end cost of the residential system. By removing that truck roll, you have a real economic advantage, which is basically passed on to the customer in the shape and form of a lower electricity bill with solar energy.

The process has made a meaningful impact on renewable energy, which is kind of unusual. If you think about it, most people wouldn’t imagine Sales 2.0 and Solar 2.0 could affect solar uptake, but it’s a really smart model.

Read the full interview with Andrew “Birchy” Birch in the Resources section of this website.

Tags: inside sales, Sales 2.0

Top 4 Sales 2.0 Initiatives for Q3 & Q4

Companies are emerging from their mid-year planning meetings having evaluated their sales performance for the first half of the year, and sales managers are resetting priorities for the third and fourth quarters. In Phone Works’ consulting work with large and small companies across industries, we are observing some trends.

Here are the top four Sales 2.0 initiatives we’re seeing for the second half of 2010:

1. Closer Analysis of Sales Cycle Metrics and Conversions

Sales 2.0 managers are realizing that measuring only revenue is not enough if they really want to improve sales performance. They are defining, measuring and analyzing sales cycle steps — based on how their buyers buy — and they’re getting a better grip on forecasts, and well as a clearer understanding of where both their teams and individual reps need help.

2. Alignment of Sales and Marketing

Whether they call it “closed loop,” “demand to close” or “click to cash,” Sales 2.0 leaders are attempting to work more closely with their marketing peers to integrate the functions. Their goals are to agree on the best-qualified prospect profiles, engage the right buyers, track and measure the results and ROI of lead generation marketing programs, and determine hand-off processes from marketing to sales — and vice versa, if a buyer isn’t ready to make a purchasing decision and is better served through a lead nurturing program.

3. Scrutiny of Technology ROI

Amid all the promise of Sales 2.0 technologies, many Sales 2.0 companies are getting smarter about determining the impact of technology on their sales results. In some cases, managers who previously implemented systems in hopes of a quick fix are now revisiting adoption and rollout plans and analyzing their sales processes to see where technology can accelerate or improve their sales. By establishing before and after metrics, Sales 2.0 managers can better justify what can be substantial investments in time and money associated with new technology purchases.

4. Creative New Ways to Engage Prospects

It is getting increasingly difficult to get the attention of our overworked, overstimulated buyers, who are being bombarded by marketing campaigns and sales calls in multiple media. We know personal, timely messages that are relevant to our prospects are the only ones getting through, but even these carefully crafted e-mails or voice mails can be lost in sheer volume of messages in the average business decision maker’s inbox. Sales 2.0 professionals are experimenting by sending personal notes by snail mail; including videos in e-mail; posting comments on prospects’ blogs; reaching out via Facebook, Twitter and LinkedIn — anything to stand out from the crowd and get a response.

Have you redefined your sales priorities? What are YOUR key initiatives for the second half of 2010?

Tags: Engagement, marketing and sales alignment, Sales 2.0, sales process

Sales 2.0 Leaders Interview: Characteristics of Sales 2.0 Professionals

I’m publishing a series of Q&A excerpts from my interviews with Sales 2.0 leaders, which will appear in my next book. This is the third and final excerpt from my interview with Jim Pitkow, CEO of Attributor, which produces Web-monitoring software that protects publishers’ revenue by preventing unauthorized use of content.

An inside-sales veteran, Pitkow worked with my company, Phone Works, to research his market and customers, as well as test the feasibility of using an inside-sales model, before he ramped up his sales efforts. Like most Sales 2.0 leaders, Pitkow isn’t afraid to try new things, but he is smart enough to test his hypotheses on small scales with pilot programs in all aspects of his business.

Anneke: How are your customers changing?

Jim: They don’t require face-to-face. They’re happy with online and phone communication. We close six-figure deals without ever seeing a customer.

Anneke: There are people who believe it can’t be done — “Not in my market, not my customers” — and sometimes that’s true.

Jim: Yes, I hear that a lot, especially in markets outside the U.S. There is still this rolling wave, an evolution of acceptable business practice. We are constantly looking for as much efficiency as far down the stack as we can to reduce our costs and increase our margin.

Anneke: There are certain types of people — Sales 2.0 professionals — who aren’t afraid to ask for help, aren’t afraid to take risks, do things a little differently, experiment, do pilots, test — and not think traditionally about selling. But there are a whole lot of people who aren’t comfortable with that. Why do you think that’s the case?

Jim: The valley is filled with entrepreneurs and business leaders who feel they have to know everything and do everything. There is a lack of confidence from the business community, as well as their investors, as well as their employees. They feel if they’re not Superman, they won’t be successful.

Anneke: And they feel they’re not earning their compensation plan.

Jim: Right, and the exact opposite is true, at least from my experience: Good management knows where it begins, knows where it ends, knows where its strengths are and where they aren’t. Good management doesn’t have ego around itself such that it can’t ask for help; it can try and fail. There is a mantra these days of, “If you’re going to fail, fail quickly and cheaply.” It’s easy to say. It’s a great sound bite. It’s very hard to do — to sit there and say, “I want 50-grand, 100-grand, and at the end of that I’m going to tell you whether we have a scalable sales business.” To me, it almost seems too cheap. If the answer is actually that simple to find, it demystifies everything. A lot of people have a hard time realizing the answer is that simple and that efficient to get to.

Read the other excerpts of this interview series, “Why Pilot Your Sales 2.0 Programs?” and “When NOT to Build Inside Sales,” or find the full interview in the Resources section of this website.

Tags: inside sales, Sales 2.0, telemarketing, telesales

Does a Freemium Model Drive Revenue?

David Satterwhite is a Sales 2.0 pro, with an impressive track record running sales in companies such as newScale, Genius and Yammer. I’m so glad he’s willing to share his insight here as a guest blogger.

The term “Freemium” refers to a model in which you give away some part of your solution for free to acquire customers, with the hope of generating revenue from some of these users with a “premium offering” of some kind down the line. The Freemium model has been used often in the business-to-consumer (BtoC) world; companies such as Facebook, Twitter and LinkedIn allow people to use their products for free, gather millions of users and then find ways to monetize the business over time, typically with advertising and/or premium tools.

Lately, I’ve seen increasing use of, and interest in, the Freemium model in the business-to-business (BtoB) world. The benefit of the Freemium model is you can capture a lot of users quickly. If done right, these users refer the product or service to friends and colleagues and, if the stars align, “virality” happens. That‘s nirvana in the Freemium world, and that’s what happened for Facebook and Twitter. Once the viral effect took place, the number of users grew exponentially.

From a BtoB sales perspective, these many “free” users equate to pipeline building. However, instead of spending enormous amounts of time and money on demand-generation tools and campaigns, telemarketing, cold-calling, etc., the Freemium model takes care of engaging prospects. Your sales team can focus on contacting users who have already shown interest in your offering by using it for free, so you can say goodbye to cold-calling.

There is still room in this model for leveraging Sales 2.0 best practices, but there are key differences in the approach. For example, the traditional lead-qualification function can be used to develop and nurture the free users, passing them to sales when they are ready to upgrade and pay for additional features or services. Demand-generation tools also can be used to nurture the free users and educate them on the value of premium tools available for purchase.

However, all these free users aren’t very meaningful unless they eventually can be converted to paying users (though it can be easy to lose sight of this in the quest for virality). The monetization strategy is indeed tricky and is one of two places where the Freemium model often fails. We BtoB people are especially prone to making errors here. In our zest to capture revenue, we can err on the side of trying to sell too much too fast. And when we do this, we stifle the benefit to free users and slow down our virality — or even stop it. The first law of Freemium is to keep the funnel growing. Don’t turn your monetization dial up so high that you negatively affect your Freemium dial; if the free-user growth slows down, the whole model comes to a halt. So, the first law to monetization in the Freemium model is, “First do no harm to free-user acquisition!” The secret sauce is to find just the right premium features that won’t get in the way of a free user getting enough value out of the product to start using it meaningfully, but will motivate him or her to want to pay money for “more.”

Back at the top of the funnel is the big free-user “dial.” The key here is matching the right product to the right market; this is the other place where the Freemium model can fail. It requires a large market of potential users, as the majority of your users will always be free users. Therefore, small market equates to small revenue and, often, failure. And the product is super important. In contrast to the old enterprise software market, where great sales, marketing and services teams could make up for a mediocre product, the moment of truth in Freemium comes when you’re not around to influence the outcome. So your product has to be extremely focused on a specific high-value activity an end user will want to take advantage of immediately; there can’t be bugs. This is the ultimate user-experience test. If the customers get confused or have trouble, they’re most likely gone. There’s no sales person around to get them back on track. From what I’ve observed, this requires a very different type of product development. This is where the BtoC guys shine. They are used to building product that can’t hide behind sales, marketing and services.

To successfully drive revenue with a Freemium model, you need a large market; a focused, easy-to-use product with extremely quick time to value for an end user; and a very strategic monetization approach that provides an adequate conversation rate (3%–13%) without slowing down free-user acquisition.

Do you agree with David’s observations? What are your experiences with the Freemium model?

Tags: Freemium, Sales 2.0

Sales 2.0 Leaders Interview: When NOT to Build Inside Sales

I’m publishing a series of Q&A excerpts from my interviews with Sales 2.0 leaders, which will appear in my next book. This is the second excerpt from my interview with Jim Pitkow, CEO of Attributor, which produces Web-monitoring software that protects publishers’ revenue by preventing unauthorized use of content.

An inside-sales veteran, Pitkow worked with my company, Phone Works, to research his market and customers, as well as to test the feasibility of using an inside-sales model, before he ramped up his sales efforts. Like most Sales 2.0 leaders, Pitkow isn’t afraid to try new things, but he is smart enough to test his hypotheses on small scales with pilot programs in all aspects of his business.

Anneke: I’m curious about your perspective on testing sales messages and approaches, markets and sales processes before building a sales organization. Many companies want to do this themselves with their own employees — often after they’ve hired an entire sales team. Why didn’t you do that?

Jim: I’ve run inside sales. I ran a $10 million-plus run rate telesales company, multinational, multiple sales offices and stuff like that. The first issue is, if you haven’t done it, you’re going to pay the cost of learning on the job and go through all the inefficiencies of that. Even in my situation where I’ve done this — I’ve seen the movie, and I know how it ends — there are certain risks I’m not willing to entertain at certain critical points in the company’s growth cycle.

There is a certain amount of data I need before I’ll commit toward constructing a full telesales department. I’m a believer in efficiency being more a function of time than cost. I’d much rather bring on a temporary team for six months — where there is zero startup cost outside of working with them — to get to know them and nail the messaging.

I would hire outside consultants if I were building my own sales team. The startup costs are near zero, and in our project we were getting data back within four to five weeks from when we signed a contract, so we could execute upon our thesis. That began to shift our messaging, shift our notion of the product and shift our thesis in the entire marketplace.

Had we seen different results, we would have moved toward building an inside sales team. I wouldn’t build an inside sales team until I had the data that showed it was proved and repeatable. I wouldn’t want to spend six months building the team and then six months dismantling it.

Anneke: Exactly, and paying for all those severance packages.

Jim: There are multiple costs: the physical cost, the morale cost, the resourcing cost. It’s just an expensive proposition. In this day of low-cost, high-efficiency, quick time-to-market requirements, it doesn’t make sense not to test first. We don’t have time to lose getting it wrong. We’ll pay a little extra to get it right, and everybody benefits. The VCs are happier. The employees are happier. Our customers are happier.

Read the other excerpt of this interview series, “Why Pilot Your Sales 2.0 Programs?,” or find the full interview in the Resources section of this website.

Tags: inside sales, pilot programs, Sales 2.0, telesales