Bringing Sales 2.0 to VCs and the Start-Ups They Fund

Bruce Cleveland, a partner at the venture capital firm InterWest, gets it — Sales 2.0, that is. Last week, Bruce invited me to deliver a Sales 2.0 workshop for management team members of the portfolio companies he and his colleague, Doug Pepper, have funded.  Bruce and Doug are representative of forward-thinking VCs who understand that companies focused on improving sales effectiveness and optimization with Sales 2.0 will grow revenues faster at a lower cost, making their investments more valuable.

The workshop participants were CEOs, VPs of sales and VPs of marketing of young companies, some of whom attended the event live and others who participated via phone and Web conference (using Sales 2.0 for a Sales 2.0 event!) The executives’ businesses are varied, but their challenges revolve around common key issues:

• Generating and nurturing sales leads and increasing the pipeline of qualified opportunities
• Identifying which prospects are the most likely to buy
• Expanding the customer base
• Introducing new sales techniques to traditional businesses and their buyers
• Determining best practices for selling through partner channels
• Upselling customers of free or low-cost products

My workshop content included an introduction to the key concepts of Sales 2.0 and illustrated how large and small companies are generating improved, measurable results with Sales 2.0 best practices and technology. My objective was to present proven new sales approaches, tested by our client companies and the best-performing companies we follow, and to give the management-team attendees at least one new idea that could accelerate results or create new opportunities at their companies. To provide multiple perspectives from key thinkers in the Sales 2.0 community, I invited Barry Trailer, co-founder of CSO Insights, and Bill Binch, VP of sales and service for Marketo (an Interwest-funded company), to be co-presenters.

Barry, who describes CSO Insights as “a 2.0 analyst firm,” presented a wealth of data from his recently released survey report on sales effectiveness, gathered from 2,800 companies on 100 metrics across industries.  Among other key metrics, he reported that only 56.3% of sales forces in companies of all sizes are meeting quota, but within the start-up community, the average percentage drops to 50.2%. Clearly there is room for improvement.

Bill offered his expert views on the core Sales 2.0 concepts of sales and marketing alignment and collaboration. Bill asked workshop participants to re-think traditional expectations of sales reps.  For example, he challenged executives who require their sales forces to generate a certain percentage of their own leads, asking, “Who cares who creates sales leads, as long as they turn into revenue?” He  suggested sales and marketing leaders should not be frustrated by sales reps who do not follow up on leads, stressing sales reps should only follow up on qualified leads. Bill also gave participants this excellent tip: To get a good read on how customers experience your company compared to your competitors, go to their website and fill out a form. Then, see what happens next:

• Is an automatically generated e-mail sent?
• If there is an offer, is it fulfilled?
• Do you get a phone-call follow-up within 24 or fewer hours?
• Do you get added to an automated lead-nurturing program?

Then, Bill said, “Once you understand your competitors’ responsiveness, try the same process for your own company, and see how you compare.”

If you work for a start-up company, do your VCs “get” Sales 2.0? Does your management team?

Tags: InterWest, Sales 2.0

What the World Needs Now: How the TED Conference & Sales 2.0 are Similar

I just got back from the incomparable TED (Technology, Education and Design) conference in Long Beach, Calif., exhausted but inspired. At my first TED five years ago,  I ran into Paul Holland, general partner at the VC firm Foundation Capital (and an early Phone Works client at Pure Software, now IBM Rational Software), who described the TED experience simply as “sublime.”  Thanks to Chris Anderson, who runs TED, and his talented staff, anyone can now access the ted.com website, view the unrivaled video content, and get a sense of what the conference is all about.  But describing the experience of attending the TED conference is a bit like explaining Sales 2.0: The whole is greater than the sum of its parts.

TED is essentially five days of a hundred or so lectures, mostly 18 minutes long, covering “ideas worth spreading”: the latest thinking on topics as diverse as medicine, physics, conservation, renewable energy, film, architecture, games, law, education, technology, art, music and dance.   Speakers this year included Nobel laureate Daniel Kahneman; technologist/philanthropist Bill Gates; musical icons Sheryl Crowe, Natalie Merchant and David Byrne; and celebrity chefs Dan Barber and Jamie Oliver. But equally impressive are less well-known presenters who are doing such awe-inspiring things that they bring the audience to its feet or move them to tears. And it’s well-understood that the conference attendees include a wonderful mix of similarly extraordinary innovators, inventors, change agents and optimists who also happen to be mostly CEOs. This makes every meal, break and party an opportunity to share ideas and compare thoughts with like-minded kindred spirits and is the reason why TED is the only conference for which I sacrifice sleep and completely unplug. I just don’t want to miss having a potentially life-changing conversation in order to respond to an e-mail or get to bed at a reasonable hour.

So how exactly is TED like Sales 2.0? Here are some similarities:

1. TED, like Sales 2.0, requires flexibility and openness to new ideas.

2. TED, like Sales 2.0, is interdisciplinary and a combination of art and science, right brain and left brain.

3. TED, like Sales 2.0, encourages collaboration and idea-sharing.

4. TED participants, like Sales 2.0 professionals, seek to improve the status quo rather than settle for the way things are.

5. At TED, and in Sales 2.0, traditional, self-serving sales pitches are not done.

6. At TED, and in Sales 2.0, technology is a key component but not the only one.

7. Both TED and Sales 2.0 take one out of one’s comfort zone.

8. TED’s ideas and Sales 2.0’s improved business results are what the world needs now!

Check out www.ted.com to see what I mean. Notice any other parallels between TED and Sales 2.0? Which TED Talks do you find inspiring?

Tags: Sales 2.0, TED

The 2.0 Practice: What One Innovative Architect is Doing to Attract New Clients

At a time when even top design firms have been laying off their entire staffs and shuttering their doors, Mark English, a San Francisco-based architect, has tripled his client base in the last year – during the biggest recession and housing crisis almost since The Great Depression. In this interview, I ask Mark about the innovative, “Sales 2.0″ thinking that enabled his growth.  I also ask him to describe his experiences with new media: How does he use his separate blogs to reach different audiences? How do tools such as Twitter and Facebook expand his reach? How did he get started, and to what does he attribute his success during challenging economic times?

Anneke: Tell us about the business opportunity you capitalized on this year.
Mark:  Like many business owners, I started the year wanting to grow my practice.   With the help of a business consultant, though, I came to the conclusion that a lot of the work we do is not scalable.  But I also realized [that] we had a unique opportunity. When I started my business in 1992, it was a lot like today’s economic climate.  I started doing energy and structural calculations for other architects just to get me through the recession. The energy compliance work was boring, specialized, and tedious – but unavoidable. Just like taxes. My energy compliance work (known as “Title 24”), which leads to repeat business several times a year, was my ticket to growth during a slow economy.

Anneke: When you came to the realization that energy compliance work could drive your business growth, what was your experience level with social media and social networking?

Mark: A year ago I had no clue what Facebook and Twitter were, or how I might use them for business purposes. I had to have someone sit me down and actually physically take me through them.  At that time, we had 15-20 clients on the energy compliance side of the business, without any active marketing.  The goal was to get to several hundred clients using social media.

Here’s a picture of how I integrated social media into my traditional marketing approach:

Anneke: So how do you use the social media sites for business benefit?
Mark: We looked at what would differentiate us from other architects out there.  We were ahead of the curve in recognizing we needed a web site as a way to advertise and present our services online.  We then started putting out newsletters in PDF format. People liked that.  We got a couple hundred subscribers.  Then we decided to do a blog that talked about our services but was attractive for other reasons.  That became “Green Compliance Plus”, which has two main goals:

1.    Provide Title 24 energy compliance documentation tailored to the specific needs of architects and other design professionals.
2.    Foster education and discussion on energy compliance and green residential design concepts within the design and engineering communities.

We made a strategic decision to create all original content, which we felt would be more valuable than re-posting other people’s content.  Without Rebecca Firestone, my writer and business content developer, none of this would be possible.

Anneke: Tell us about the content.
Mark: We started interviewing.  We included conversations with green builders, suppliers of energy efficient heat, power and lighting systems, solar companies, lots of people in the green industries.

Anneke: How did you drive people to your blog?
Mark: We started cold calling architects who were our prospects.  Many of them subscribed to the blog right away.  After that we started doing lunch meetings.  Of 100 people we invited, 50 would respond and have lunch with us. Sometimes it took several months to schedule.  Eighty percent of those lunch meetings turned into a sale.  And every time we post to the blog site, we send an email link to our subscribers.  This way we stay on top of everyone’s mind.

Anneke: Are you using a system to track your contacts? How does it help you win business?
Mark: We have everything in salesforce.com.  There’s not much work out there right now for residential or commercial architecture, but we have these new clients on the energy side.  They hire us for small jobs, which the system helps us track, and as the economy improves, there will be more.  The system helps us stay in touch with customers and produce recurring revenue.

Anneke: You have another blog, as well, right?  How did that come about?
Mark: On the architecture side, we created “The Architect’s Take.”  The genesis for that came from my experience as the building architect for the Metropolitan Homes Showcase in June of 2009.  I met a few of San Francisco’s top architects working on that project and realized I needed to find a way to get to know the others to increase my visibility in the architecture community.  I decided to do a second blog featuring architects we like.  We interview them about themselves, not just their work.  As an architect, I want to know what makes someone tick.  The Architect’s Take blog is a way for me to access well-known architects without barriers.  No one has turned us down for an interview yet.  From a professional point of view, this gives us a much higher profile with our peers in San Francisco.  That kind of visibility can lead to awards, jury invitations, and other opportunities.

Anneke: How exactly do blogs and Twitter generate prospects?
Mark: We have three sites: our main website, our “Green Compliance Plus” blog and our “Architect’s Take” blog and they all work together.  We use WordPress as our blog tool and it has an automatic Twitter engine.  Whenever we post something, it sends out a Tweet (Twitter post).  The Tweet shows up on a follower’s computer or mobile phone, they click on it and it takes them to the original blog article.  We find people retweeting (RT) our tweets to their own networks which expands our audience exponentially.  I’m also using design blog sites like houzz, which is an online portfolio for architects and designers.  You upload photos of your work.  People can sift through the content visually.  We get 12-15% of the flow to our web site from houzz.com and it has already provided several work opportunities for us outside of San Francisco.  There’s another one called Apartment Therapy that’s really big.  That also drives traffic to our sites.

Anneke: What have the business results been?
Mark: We’ve tripled our client base. There’s no way to do that in this economic environment without the support of the blog sites.  They give us credibility and a competitive advantage.  Very few architects are doing this.  Some may be on the web, or have a blog site but they don’t update them very often or they’re doing re-posts of existing content.  We’re providing high quality content and case studies of actual clients.  The case studies are documented proofs of concept that give us credibility and plausibility. They show our value to  clients and prospects.

Anneke: What is the volume of opportunities coming from Twitter and how do you track it?
Mark: Through Google analytics, we can see what comes from Twitter.  Twitter provides 20-25% of the flow to our blog sites.  I’m at 2,500 – 2,600 followers and adding 100 to 120 a week.

Anneke: Where are your Twitter followers coming from?
Mark: Mostly from other networks.  One article on the “Green Compliance Plus” blog site was immediately retweeted (shared with other people’s networks on Twitter) twenty times to eleven other networks.  I got fifty new followers from that.  Companies we interview often include a link to our blog posts on their web sites.  In one case, we got 500 hits right away and the post still generates five to ten visits per day.  I also use the Tweet Adder engine to search and follow other prospects we might be targeting.  A large percent of them follow me back.  I would say that Twitter has become extremely useful.  I get a lot of e-mails from Twitter followers.

Anneke: So you’re not just writing two blogs and using Twitter and Facebook to publicize links to your own content.  You’re also following other people’s content and retweeting the information you believe your prospects will find valuable. How do you have time for all that on top of running your business?
Mark: During the week, I get to the office a little early and spend maybe fifteen to twenty minutes finding articles of interest on other sites like CNet Green Technology, the Contemporist, and houzz.  I tweet those and many of them get retweeted.  Every email I send includes links to our web site, blogs and my Twitter and Facebook links.

Anneke: You just spoke at an AIA (American Institute of Architects) event on December 4th with two other panelists using social media in their practices.  What did you learn from them?

Mark: Mike Plotnick from HOK spoke about using blogs to personalize client experiences and develop internal esprit de corps with a giant multinational company.  He stressed that designers and planners within HOK have willingly signed up to participate on his blogging team, even though writing blog posts is in addition to their regular jobs and they do it on their own time.  He also talked about how he, a self-described “traditional PR guy”, had to give up control to embrace new media.  The firm launched its social initiative in mid-2008 as part of a recruiting strategy to present a young, hip, cool, creative vibe to attract the right talent.  This was during a time when unlike today, there were limited candidates looking for jobs.  Mike also said there was initially no formal mandate to blog; they simply starting experimenting on the sly.  He does very little to control what his team blogs about.  The only rules are “nothing illegal, unethical, controversial, or confidential.”

Joel Robare, a designer who runs JR Studio, told the audience something completely different: he abandoned his blog in favor of Twitter, when he realized he was pushing content out to no avail. He claims his clients don’t have time to read long posts and favor the faster, more immediate information exchange that Twitter provides.   Joel said he posts 5-10 times per day, which he writes all at once in the morning while he is microwaving his breakfast, using a tool called TweetFunnel. His posts fall into three categories:

1.    What is going on in the market?
2.    His own insights
3.    Advertising for his business (no more than once every 15-20 tweets)

Joel checks where his prospects are spending their time online by entering their e-mail addresses into a product called Spokio. And he predicts that video blogging will be the next big thing.

Anneke: After the panel spoke, someone challenged you by asking how many decision makers have the time to read blogs, follow Twitter or Facebook streams.  How did you answer that question?
Mark: I gently suggested he think outside the box and look beyond a direct cause and effect.  I can track specific, measurable business results to my new marketing approaches.  But it goes beyond that.  I am building awareness and reaching an international audience at an extremely low cost. This, in addition to my pedigree, leads to credibility and trust.  People in my field now recognize my name. That’s worth a lot. There is no doubt in my mind that my activities are increasing revenue and profitability.

Tags: Blogs, Green Compliance Plus, Joel Robare, Mark English, Sales 2.0, social media, The Architect's Take

The Art of Social Sales E-Book: Sales 2.0 Strategies in 5 Industries

I am honored to be included among the authors of this e-book, including Paul Greenberg, who spearheaded the project for The Customer Collective and asked me to contribute. As always, my content focuses on real sales and marketing people, generating measurable results using social media and networking. Do you have a “social sales” success story to share?

Here’s a summary of the book’s topics.  You can download a copy free with registration.

Sales are not often traditionally thought of as a social process. But the behavior of the modern customer is changing. Customers today, in many ways that we’ll explain, can increasingly be described as “social customers,” prompting the contemporary sales organization and even the individual salesperson to rethink how they sell. And that can be daunting for many reasons.

• Learn how high-tech, non-profits, retail, sports and telcos leverage new strategies to engage with customers.
• Develop strategies to use social networks to generate leads and cultivate relationships.
• Learn how companies like newScale and ConnectandSell are using LinkedIn and Twitter.
• Participate in the conversations that your newly empowered consumers are having.

Featuring input from:

	Paul Greenberg is a recognized CRM thought leader, the author of the best-selling CRM at the Speed of Light,  President of The 56 Group, LLC, a customer strategy consulting firm focused on cutting edge CRM strategic services, and a founding partner of the CRM training company BPT Partners, LLC.
	Anneke Seley is  CEO and founder of Phone Works, a sales strategy and implementation consultancy that helps businesses build and restructure sales teams to achieve measurable goals using Sales 2.0 principles. She was previously the twelfth employee at Oracle and the designer of OracleDirect, the company’s revolutionary inside sales operation.
	Jay Dunn is VP of Marketing for Lane Bryant, and Founder of Supergroup, the social network for marketing, social media, retail and design professionals. Jay combines his expertise in marketing, design, and branding with his passion for new media, social networking, and technology to reinterpret retail marketing for a variety of clients.
	Jouko Ahvenainen is a pioneer in social media marketing, and played a significant role in the development of the first social marketing intelligence solutions for mobile and media companies. He is co-founder of Xtract, the world’s first social network analytics company, and Grow VC, the first global peer-to-peer micro-funding service for startups.
	Brian Komar is the Director of Strategic Outreach, Activism and Alliances at the Center for American Progress, overseeing three portfolios focused on strategic marketing efforts to strengthen the capacity of progressive advocates and networks, amplify the progressive voice, and extend the reach of the Center’s policy work.
	Mark DiMaurizio is VP of Technology Solutions for Comcast- Spectacor, overseeing the company’s sales and marketing technologies for its Philadelphia sports properties (Philadelphia Flyers, Philadelphia 76ers) and all events at their two Philadelphia venues.

Tags: E-book, Paul Greenberg, Sales 2.0, social media, social networking

Looking for Incremental, Recurring Revenue? Optimize Renewal Sales

Many companies miss the huge incremental revenue opportunity of renewal sales: a dedicated phone-and-Web-based sales team that follows up with customers every month or year to insure they renew their contracts or service.  By relegating renewals to an administrative overhead function, you could leave millions of dollars on the table.  With a quota-and-commission-driven inside sales approach, you can not only increase revenue at a high profit, but also engage customers more fully and insure they are actively using the most current version of your products or services.  This leads to happier and more loyal customers – ones that are less likely to be lured by your competition – as well.

After presenting early findings and trends in inside sales compensation this week at the San Francisco Bay Area Telebusiness Alliance meeting, I sat in on a breakout session with managers of renewal sales to discuss issues pertinent to their sales groups.  The group consisted of managers representing companies selling big ticket items: hardware, software (perpetual license as well as SaaS) and medical devices.  While some groups are selling annual service or maintenance contracts, those in SaaS businesses have a subscription-based model and are trying to make their products “stick” by selling additional months of product access. What these groups have in common is the incremental, recurring revenue potential of their territories.

Many managers reported compelling productivity gains by dedicating a sales group to renewals, refining the renewal process, and hiring commission-based renewal sales reps, including:

• 17%-200% increase in renewal rates
• increasing multi-year contracts
• decreasing churn rate
• decreasing headcount while growing revenue
• increasing on-time renewals by 50%
• identifying additional revenue opportunities (e.g. new product or service sales)

In some companies such as those selling Software as a Service (Saas), renewals are often considered the territory of an “installed base” or “customer sales” (aka “farmer”) rep, or rep selling to customers that have previously been sold by a “new business” rep (aka “hunter”).  There have been numerous webinars, articles and blog posts recently questioning how current or accurate the “hunter/farmer” labels are in today’s Sales 2.0 world, so I am making these role distinctions using different (more politically correct?) words.

In the debate over whether or not to separate out renewals from other customer sales,  I fall on the side of creating distinct roles in companies that renew service on an annual basis when it can be justified by revenue potential, budget and resources, if only because the customer contacts are often different. Renewal purchasing is often handled directly and solely by an administrative or purchasing person, while a new product or service purchase is typically driven by a business or technical buyer.

As for when to pass a customer from new business to renewals or customer sales, companies are all over the map. In some SaaS companies, new business reps are given 60-90 days or more to sell additional months of service while others ask the new business team to turn over the customer the day after they purchase.  If your company objective is aggressive market share growth, I suppose you would want your new business reps to turn over new customers asap for nurturing while they pursue the next set of prospects to bring into the fold.  In any case, teamwork and collaboration (and compensation to support that) are essential to making your customers’ experiences good ones, as the hand-offs occur.

Whether or not field reps get commission credit for renewal sales varies from company to company.  Some companies pay a small bonus of a few hundred dollars to renewals-only reps who find new product or service opportunities and pass these to another sales group; the bonus is only paid if a sale happens.

Some other things I learned from the group of renewal sales gurus:

• In the Bay Area, comp ranges from 60-70% guaranteed pay with 30-40% incentive or commission pay with an OTE of $75-120K
• Companies have special incentives to motivate reps to close renewals in the quarter the renewal is due, but there are also incentives to bring in past-due renewals
• Clean and correct data are critical to the success of a renewals sales team
• Other administrative issues, such as co-terming renewal dates, can be a significant part of the job
• Churning in the smallest customers can be very high. Some companies forgive churning (and don’t “debook” them in commission calculations)  in opportunities less than $6K rather than penalize and demotivate reps
• Outsourcing renewal sales can be a viable solution, especially in certain markets (e.g. outside North America), given the pay-for-performance model offered by vendors focused entirely on renewal business such as Encover and ServiceSource
• “Reinstatement fees”, applied to months after a renewal date has passed, motivate customers to renew on time
• Pairing inside reps with partners can help close renewal sales in smaller accounts, if an onsite visit is required; company field sales resources are called upon if the order size is large enough
• Dedicated “win back teams” can help address the special challenges associated with lost or non-renewing customers while increasing the productivity of other  sales teams

Do you have a sales team dedicated to renewal sales? Do you have experiences to share?

Tags: Incremental revenue, inside sales, Recurring revenue, Renewal sales, Sales 2.0