While it was fascinating reading the stories shared, the post highlights the advice that came from one of the greatest venture capital firms of all time. It emphasizes that while financial pro formas, business plans and management teams are all important; getting money from the venture capital firms comes down to answering one question.
That question is: Why Now?
Simple enough.
Since reading the post, I’ve found myself referring to it many times with my clients and prospects. Yesterday I shared the story of my experience working with a sales executive of a fast-growth company. I highlighted how what he perceived as a sales skills or messaging problem really wasn’t. His company is facing the same challenge that most growing companies face. They’re focusing on the wrong competitors.
The companies that I’ve worked with have put forth significant effort in differentiating themselves from their competition, and trying to demonstrate why they’re the best choice. Most of them actually do a pretty good job at it.
They’re focused on the wrong competitor. For most companies, their biggest competitor isn’t another company that claims to do something similar or better than they do; rather their biggest competitor is the status quo. It’s inertia you have to deal with, and if you haven’t figured it out already, inertia is an extraordinarily powerful force.
When you’re working to overcome inertia, there are two questions you must answer – clearly and repetitively:
It’s easy to forget that the vast majority of your prospects are already doing something (and in this case, nothing is something) to address the issues/problems that you address. If your answer to these questions is something along the lines of, “we’ll help do better;” it’s unlikely you’ll get the results you want.
This was precisely the problem the company I talked about yesterday was having. Their sales proposition was basically that we’ll help you do what you’re already doing better.
That’s a proposition that will often gain some interest and you’ll probably be able to set some sales meetings on it. However, it’s not going to get opportunities across the finish line often enough. The reason for this is that change has both a psychological and physical cost. Additionally, the cost of change is typically overestimated by the customer (and underestimated by the seller).
The formula for action is actually quite simple: the cost of not changing must be perceived as greater than the cost of changing. If you communicate this through your sales cycle, you’ll consistently and predictably make new sales; if you don’t…you won’t.
Marketing’s job in this effort is to:
In essence, marketing establishes the playing field and frames the conversation. This is a very difficult task given that your message doesn’t exist in a vacuum. Your prospects are being pulled in a variety of ways and are influenced by a variety of stimuli. This is why staying focused “on message” is so crucial to success.
One trap that I find companies falling into is in how they define the problem they solve. They are either too direct in defining the problem or too vague and conceptual.
We work with a travel management company that was seeing their growth stall. Their message focused on how they solved travel management problems, but when you looked at who their personas were you quickly realized that no one in the customer’s organization owned travel management problems. While there were people who oversaw or managed the travel program, that was not their primary job.
As we discussed their personas, we uncovered the problems that existed when travel wasn’t managed properly. We identified cost problems, productivity and even the ability to compete effectively, as key issues. Those are all issues that high level executives do own, and are actively involved in addressing. We’re now in the process of repositioning their message and content to focus on those issues. This will help us build the tools that enable their sales team to engage with higher level executives about higher value issues.
The sales team must:
This means that salespeople must be confident enough to slow the sales process down. They must be willing to walk away from prospects who are unwilling to share crucial information or to collaborate in the design of a solution.
Salespeople are responsible for the “last mile,” and therefore must be able to confidently lead a conversation that answers the “why change” and “why change now” questions. This means that they must learn to ask more powerful questions that allow (or force) their prospects to learn more about their problems and how to address them.
The leadership team has a crucial responsibility in the process as well. They must:
Imagine an NFL team deciding to compete without a playbook. It would be ridiculous; yet sales organizations regularly attempt to do something equally or more complex without one.
Great sales organizations create great systems and structures to guide actions. They don’t leave success to chance. Unfortunately, most sales organizations utilize a series of sales steps that they call a process (it’s not one) and then leave it to their salespeople to figure everything else out. Then they get upset when salespeople “go rogue,” create disruption and fail to produce consistent results.
Creating a sales playbook ensures that your salespeople have the knowledge and tools that are needed to succeed in the market. It’s the job of management to create this type of infrastructure and clarity that unlocks sales genius and enables peak performance.
Over the next, week ask each person on your marketing, sales and leadership teams to answer those two questions, and see what they say. Then bring your leadership team together to craft what you feel the answers should be.
From there, communicate those answers to your team and build (or enhance) the infrastructure, content and processes you have in place to reinforce those answers. Doing so will give you greater traction, and over the next 12 – 18 months, will make the job of growing the business much easier.