Nesheim Online

WHEN SALES IS FRUSTRATED: Look to Marketing for relief

The email was hot, sizzling with frustration. The VP Sales ranted that me-too competitors were copying words and claims from the web site of his company. The me-too startups were gaining ground at his expense. He highlighted many words from a competitor's recent press release. He was right, the words were nearly identical to those his company was using. So what should he and his CEO do?

This is a common situation with startups. It occurs when a new market segment does not yet have a leader. The leader will emerge when that company decides to focus on doing something extraordinary and then creates proprietary names for the otherwise general words that are claims to fame, such as special features, outstanding benefits to customers, and so on.

Each new market frequently begins by acting as if all the competitors all are selling a commodity, a thing that cannot be identified or separated, one from another. Then one company gets smart, perhaps from listening to customers and seeing how gorillas emerged from other new markets. The CEO calls in the VP of Marketing, says "Get us distinguished, proprietary names for what we are selling, then the copy cats will be out of the copying business."

That CEO is right. When your names stand for proprietary things, you have begun the march (it is not instant) toward becoming a brand. A brand stands for something. Competitors cannot also say "Hey, we also have 'Intel Inside'!" Or "We too are a Porsche." That is the magic that separates the world-class thinkers from the me-too copy cats. It starts the process of becoming a gorilla. It boosts competitive advantage so high that it becomes unfair.

Marketing people are brilliant at creating something to stand for and giving it a name. The consumer packaged goods professionals in America are amazingly skilled at it. Asians are few and far behind in gaining this powerful skill.

That is what the VP of Sales needs inn order to stop feeling frustrated. "Hey, our PrimeOne(tm) all organic, non-smelling, plant fertilizer works wonders because it has Hexaclorophine(tm). No one else does. And that is what you need to grow the most beautiful house plants." That is the specialness that the customer needs to hear. The other choice is to just buy stinky fertilizer (from your six other competitors).

BOTTOM LINE: When your Sales department is moaning, call in the Marketing doctors for a cure. Their job is to convert a commodity of me-too features into an exciting, differentiated product that can become a brand. When that is done, the groans turn into cheers. Serial entrepreneurs are aces at doing that.

INDEPENDENT SALES CONTRACTORS: When do they make startup sense?

"What are your thoughts on the wisdom of Independent Contractors on the sales side?" read the email today. Fred had asked a frequently posed question, an important one for startup CEOs to address.

Sales people are hired after marketing people. Because if they don't have a product to sell, they'll start selling anything on your desk, and the desk will go next. They have to sell, be active, get to customers or else they go crazy and drive the rest of the company nuts while waiting. They are very independent thinkers and report only to a VP of Sales who reports to the CEO. Marketing is an alien function, one to be tolerated at best, according to veteran sales professionals I have interviewed.

Many different channels of selling exist. Each calls for a different kind of sales person. Direct sales means you hire experienced sales people and build a powerful sales force. Ellison did that brilliantly at Oracle. Telesales (on the phone) calls for a very different kind of sales person, people brilliant at selling to strangers on the telephone. Not many can do that well.

In either case, direct or tele sales, startups can use independent sales people, typically more to supplement employees than instead of them. The semiconductor industry made that a way of life for startups. They do it with independent sales representative firms, each organized into a group of experts that dominate big accounts in a tight geographical region (e.g. General Motors or the U.S. Army).

The hard part is getting the independent reps or sales people to pay enough attention to the startup's products. Small sales generate small efforts on behalf of any new product. "It is hard to get enough 'unfair share of mind' from rep firms" said one CEO I talked to.

The good news is that if your product is hot and so is your company, the reps will sell with gusto, push hard and support you eagerly. Some CEOs have even used independent sales people to help get a seed round of funding. Successful sales people are often independent and have a lot of money to invest.

BOTTOM LINE: Do not rule out independent sales people for your startup. They have a role in some new enterprises. If you can get their attention, they can accelerate your sales plan and get you into key accounts.