Sen. Bennett promotes business in Rural Utah Part I
Senator Bob Bennett encouraged hundreds of small business owners and entrepreneurs in Utah to stay positive about the economy as he kicked off his ninth annual Rural Business Conference in Price where the focus was on job creation and economic growth in the energy sector.
"Job creation comes from small businesses, not from Fortune 500 companies," said Bennett. "But it's those small businesses that grow that have the potential to become Fortune 500 companies. The government must do more for this sector of the economy and recognize that small businesses are the key to igniting our economy."
Nearly 520 small business men and women from 67 cities and 22 counties in Utah attended the conference at the Carbon County Event Center in Price. More than 50 organizations and businesses were also on display during the business exposition, giving attendees the chance to network.
Steve Appleton, CEO of Micron Technology, was the keynote speaker and addressed the conference about tactics and values he believes will help make small businesses successful. He encouraged attendees to set realistic expectations, to build relationships, and to persevere. Micron is one of the world's leading providers of advanced semiconductors, and with Intel Corporation, jointly operates IM Flash Technologies in Lehi, Utah to manufacture memory used in various computer and communications devices. When he became CEO of Micron at age 34, Appleton was one of the youngest CEO's in the Fortune 500.
The conference included various workshop sessions on budget-friendly strategies for marketing and sales, building a home-based business, acquiring small business capital, community economic development, developing social media strategies and rural business growth.
Bennett also led a discussion on energy development alongside Kevin Book, managing director of ClearView Energy Partners. The two discussed the policy and economic impacts related to climate change and energy development in a local, national and global setting and took questions from the crowd.
How to make sales in a down economy was presented by Don Cash in the first breakout session.
Cash, Vice President Mid Market Sales and Global Account Development for Omniture a business unit of Adobe Systems, presented a slide show and lecture about making sales in a down economy. No matter what industry you are in, no company will last long without a quality sales team.
Cash went to work for Omniture as VP of mid-market sales in 2004 at that time their sales were less than $8 million. Ominiture was acquired by Adobe Systems for $1.8 million, when they had annual sales in 2009 of near $400 million. In this workshop, Cash taught how businesses of any size can improve their bottom line despite difficult financial times.
In addition to his success at Omniture, Cash has had 18 years of experience in sales and marketing, product development, business development and channel management. Prior to Omniture, Cash worked for Siebel Systems, Inc. as senior director where he opened up the Utah office for Siebel's mid-market sales organization. Cash was vice president of sales and marketing for Mirror Software Corporation, Seattle; held sales and sales management roles within QuadraMed's sales organization; and served as a sales representative with AMSCO Medical and Baxter Healthcare. He received a bachelor's degree in marketing from the University of Utah with a minor in Mandarin Chinese. He was also named the sales executive of the year in 2007 by Utah Technology Council and has been named four times as one of Spring Capital's Top 100 entrepreneurs.
The following are quotes from Cash's presentation at Sen. Bennetts 9th Annual Rural Business Conference. Cash started off by saying, "My main experience is from working with smaller companies and smaller businesses like many of those in the audience here today. At Siebel Systems I had about 75 sales people and six managers. I got a request from this kid, he was about 27 years old. His name was Josh James. He asked if I would come and work in his little company for free. Just to help out his sales guys. They were really struggling, his company was called My Computer.Com. Because Siebel Systems was known as the best practice for sales, we had sales software that helped people organize and run their business and it allowed managers to understand what was going on within sales. We really did have some good processes. I decided to go down and help this business out. There were two salesmen at that time at My Computer.Com. I would go down every six months and work with these guys for free, take a look at their pipe line, take a look at their corporate presentation, take a look at their elevator pictures, take a look at everything about their sales organization. I would just question it and over time they changed their name to Omniture and started getting some pretty good sales. I would like to say I had something to do with that, the reality is that the timing was perfect. Switching the name and the focus of the product was absolutely perfect and this company started to grow.
"I started working with Omniture when their sales were only a couple of hundred thousand dollars. I joined finally after the fourth request to go to work for Omniture when their sales were around $8 million. Last year we did just under $400 million in sales. We were just acquired by Adobe Systems for $1.8 billion dollars. This is the largest tech acquisition in the state of Utah. I now have 75 sales people that work for me as well as a number of account development folks.
"This presentation was developed for the Utah Technology Council a chairperson of a forum called Peer to Peer Sales. It is effectively just a group of a lot of my peers in the tech industry, where we get together on a bi-monthly basis and just round table discuss the issues that we are facing and how we can help each other out.
"I have done other presentations such as how to hire top sales people. Somehow information floated down to Senator Bennetts office, that I had made a presentation about selling in a down economy. I want you to know this presentation was geared toward other sales managers with a sales team.
"Lets go through some of the tactics: I have about 15 tactics you can use. As we go through these I hope you will be able to draw correlations to your own business. How this will impact the firm you are working for, whether you are an owner operator or an entrepreneur. You will have to take some of these tactics and apply them to your own business and how they would apply to you. Ideally you will come up with some additional tactics along the way.
"The first one is: You cannot turn on the radio without hearing how bad the economy is, you can't turn on the TV without hearing it, you can't read a newspaper, everything is depressing. Everything is so depressing. One thing that you absolutely have to do is keep your own spirits high, because there is too much time wasted dwelling on the negative. There is a lot of doom and gloom out there.
"I like to think of it this way. That is what my competitors are doing. They are all sitting around the water cooler wringing their hands and just worried whether or not they will make it or not. That is the time when I need to be completely focused and executing and working on closing deals. So do not waste your enthusiasm on all the bad news. It is so easy to get caught up in that. The last thing that I ever do is ask my sales people, what's the economy been doing to your business. It just gives them an opportunity to blame anything and everything on the economy. My favorite comment to my sales people, when I sit down with them and do one on one, account reviews and territory planning, tell me how you are planning to win, do not tell me how you are losing. I do not want to hear how the economy is killing you and deals are being delayed. I get it but I want to hear what you're doing to plan to win. Where you are planning to succeed? Just keep focusing on the positive.
"Just like Steve Appleton of Micron Technology talked about competitors going out of business. We have lost a whole bunch of competitors that have gone bankrupt or have been consolidated.That has been wonderful. That just means we are continuing to gain market share and as we come out of this and continue those high levels of growth, we will have a lot fewer ankle biters out there that we have to worry about.
"The second tactic: is to make sure you are focused on current customers. I know that this seems like a no brainer comment, but our average revenue on an annual basis from our existing customer base, has gone up 35 percent to 65 percent over the last couple of years. That was by design, because of the cost to attract and get a new customer is 10 times what it is to retain a customer. We have through acquisitions a lot of products used by existing customers. We have about 5,000 existing customers now and products that a lot of our customers did not have, so rather than going out and spending marketing dollars, trying to find a net new logo or trying to find a new customer. We made a few changes internally and grew a lot more focused on our existing products and our existing customer base. We went back to our customer base and continued to up-sell our customer base. The same thing happened back in 2000 and 2002 when we had the dot com. I know it sounds like a no brainer, but we were able to leverage a couple of things internally and I know you may not have a call center to use or a support department that does customer care. We were able to make changes in our compensation where for every lead that our customer care department, was taking care of our customers problems, could identify an opportunity and get a lead for a new product we would give them a spiff.
"That program alone drove a significant number of leads into our current customer base. Which brought in a lot of new revenue. We also changed the way our sales development group operated, they used to be only charted to bring in new leads for the sales people. They were not allowed to call into our existing customer base. It was all about land grab before the recession and all about how many new logos we could get and widening our market share. We reversed that with this recession and focused our groups on finding new leads within our customer base and paying them the same because they had found a lead and a net new logo. Our new logo leads were trending down, it was becoming harder and harder to get a brand new customer. So we focused on finding additional opportunities within our current customer base. Sure enough it absolutely went off the charts in how many new opportunities we were able to draw from our existing customers. We went from 1.2 products per customer to 2.6 products per customer. That is what has been keeping us growing at a 30 percent rate. It is not growing as much as it was before the recession, but the growth is because we focused on our customer base. This has gotten us through these past couple of years. The market is continuing to improve and we expect to continue to grab market share.
"Tactic Number 3: I use this to identify areas of opportunities rather than wait for my CFO to come to me with the budget ax and start whacking programs and campaigns and dollars out of my budget. I took the initiative to identify areas that I thought we could probably walk away from.
"There are a significant number of trade shows that we attended where the ROI (Return Of Investment) was not near the ROI of some of the other trade shows," said Cash.
It really helped me to go through the process of understanding where we get the best bang for the buck. This helped me also make sure I had the dollars allocated or protected for those key programs and voluntarily eliminating some of the ones that weren't producing.
Tactic number 4: "Give your customers a deal. This may sound simple, but your customers are most likely struggling with their own budget problems. The last thing I wanted is to have our customers terminate their contract or not renew the contract. We offered to go out and re-negotiate their current contracts. How many of you have cell phones? Have you ever had your cell phone company call you and say, " I noticed you signed up for this higher plan and you are not using the number of minutes on the plan and you would actually save money if you went with this lower plan". Has anyone ever had that call? No! That is what we actually did. We are basically similar to the cell phone company, where the customers will sign up for a set number of server calls on a use it or lose it scenario. They commit for the year to how many server calls they are going to buy and the cost per million. They pay for it whether they use it or not. We decided to go out and call our customer and pro-actively renew their contracts for an additional year. The benefit that we got was, taking a contract that was going to expire in three or four months and renegotiating it at a lower plan. This meant less revenue to Omniture however it gave us another year of contract. The fact that we were calling them in advance, saying I know you bought all of these server calls, we are going to give you the chance to lower that and reduce your cost, all we ask is that you renew your contract for another year. This was extremely well received. The amount of loyalty this bought us from the majority of our customers was well worth doing.
"You know what happens when you go over your cell phone minutes. You have to pay a premium. We have the same thing with our products as well, which is called over usage. If you go into over usage you can take a significant hit on your bill. Although we give the customers the opportunity to monitor their usage trying to avoid over usage. Sometimes they just do not have the time or the resources to do that. We started to do that pro-actively on our own and contacted the customer and said we noticed that your volumes were trending into where your going to be in over usage if you don't do something now. Those overusage fees will be some significant fees. Those fees are great for the company, however they do not breed a lot of long term loyalty when the customer suddenly gets hit with those overusage fees. By pro-actively identifying customers that were going to be going into overusage and addressing that by reviewing the contract, upping their commitment but at a lower rate. We were able to help save them from some significant fees. I think that buys significant loyalty.
Tactic number 5: "Networking. You are here and that is a good sign. You should do this on a regular basis. This has been one thing with my career that has been extremely effective for me, by involving myself with the local tech community at UTC, going to the different trade shows, going to the different events. When Senator Bennett's office called me to come down and present. I said, I am always looking for opportunities to assist other companies. I sit on the strategic advisory boards of eight different companies and that is a non paid position. Essentially I go in every couple of months and sit down with their sales people, their sales leaders and help them out. That's it I just try to help people out. That is how I was introduced to Omniture when they were a tiny company. This has been a huge financial success for me. I am a big believer in networking. There is a lot of opportunity that comes from face to face contacts, in getting out there and interacting with others.
Tactic Number 6: is similar to the first one, where you're thinking positively, not focusing on the negative. You need to calm down at some point. Everybody is worried about the economy, everybody is worried whether their company is going to remain solvent, whether their job is going to remain intact. You cannot let that rule your thoughts and actions. Look at it as how can I use this as an opportunity. If I were brand new what would I do different? What are the challenges? We are going through a cycle where we are weeding out the weak players. If you do not want to be one of those weak players, you've got to be thinking about how can we change, how can you innovate. What are a couple of things you can do to come out of this stronger and better in the long run? Remember even in the worst of times people end up winning. When I was referring to that Harvard Business Review article, that was talking about the number of companies who not only went through the last three recessions, but about 9 percent of them actually grew and became significantly stronger. I want you to know that there are people who are taking advantage of this recession in finding opportunities and thinking about things completely differently and are coming out of this recession stronger than when they went in.
Tactic number 7: "This is more for people that work for other companies so if you own your own business, will your business survive? I know it is a tough one to swallow, but basically how vulnerable is your company right now? How much is at risk? If you were one of your customers, would you do business with you? You simply have to ask yourself that. If the answer is no then my recommendation is that you go to work for a firm that is not at significant risk. If the answer is yes, then you have a significant amount of viability and with that you should go out there and sell like there is no tomorrow.
"I apologize, this tactic was not meant for owner, operators, it was meant for salesmen working for bigger companies. However the message is valid. If there is a threat of folding you need to go for it.
Tactic number 8: "Crafting a new corporate message. One thing that we have had to do in the past is to take away the financial worry of the customer doing business with us. In the early years, before we went public, there was not a prospect that didn't ask for our financials. They needed to be assured that if they were going to sign up and do business with the company, a relatively new startup, that their financials were secure. They wanted to know their data would be secure, when starting up their system to rely on our company, they did not want to be at risk if we were to suddenly go out of business. We were sending out our financials directly to our prospects and once we became public, we could send them to an on line link where they could see our financials and analyze them.
You need to make sure that your customer knows that you are a safe bet. If you have to change your messaging, they need to know that is the case. Being able to monetize your product and focus on that message is extremely powerful. Helping them to improve their bottom line even by reducing costs or improving revenue. Being able to sell your product around those messages is extremely important in difficult times.
Tactic number 9: "This is a very similar tactic in that you need to let your customer feel that you are secure. So they feel that buying from you is buying from a stable company. There are times when you go out and really push that you are a cutting edge company on the leading edge. Then there are times when you need to step back and say we are stable. We have this protection here and you will get security by buying from us. We are a safe bet.
"I worked for IBM when I was in college in the 1980s and that was one of the things that IBM was known for. You don't ever lose your job working for IBM as your partner. That is the type of thing that you want to convey to your customers. That it is a safe bet. Make sure that you refine your unique value proposition, relative to savings, cutting costs, increasing revenue or improve the bottom line in some way.
Tactic number 10: "Make sure that you know all the different options available for getting the customer to buy from you. You want to make sure that when you go into any sales situation and any negotiation with enough options, that no matter what, you give them every reason and opportunity to buy from you. Whether that be leasing, special payment terms or the way you price your product. We have had a lot of success in the way we have structured our discounts and the way we approach discounts. My sales team will send out proposals and it has right on the proposal that this is the only way you can get a discount on our product. You get 5 percent for doing a multi-year term and you get another 5 percent if you pay cash in advance. Those are both things that are very positive for our company. They helped us significantly financially, to get multi-year contracts that won't be canceling after 12 months, we sign them up for 24 or 36 months. This is how we discount. We love to discount. This is how we do it. We set that up front in every proposal. We set that up front in every discussion, so when it comes time to negotiate a deal. They say I know how to get my discount. Those are all things that help us in the company. It stops all the other discussion about discounting because they know up front what the discounts are. We do discount and here is what you get and here is what we need from you. We have had to do some creative terms on occasion. We have had to restructure the way we price some things. You have to take a look at your own scenario and see if any of this applies.
Tactic number 11: "Prioritize your opportunities. Look through your pipeline of opportunities, based on this recession based economy. I have a huge pipeline of financial services companies, big banks and financial services firms, that I have had to say, the likelihood of a lot of these sales closing is very slim and we had to write those off. However we have had a huge increase in the number of marketing agencies that were using our software on behalf of their clients and they were growing like crazy. We shifted some of our sales people from financial agencies to selling the marketing agencies and we were able to maintain and increase the net revenue to the company. It wasn't until we sat down one or two years ago, when the banks were melting down, and said the chances of the banks and large financial firms buying from us, we knew was going to be slim. We took the opportunity to reallocate resources to make sure we were not betting on sustaining a certain percentage of those bank sales closing. Otherwise we were setting ourselves up for failure. We also have a lot of strategic accounts where we want the name and we are putting a significant amount of resources into trying to close them as customers. We had to do an internal evaluation as to whether the time, energy, cost and effort to go after and close those deals were worth it and maybe we put them on hold. Simply because of the resources that would be required to get some of those.
Tactic number 12: "Essentially re-qualify your customers in the sales channel. The net of this tactic is: how many have customers that just suck the living life out of you? At some point you have to do a cost evaluation. How much are you really getting out of that customer to keep them as a customer? Particularly if you're putting much time and energy into maintaining the customer. This was an opportunity for us to step back and evaluate whether or not we wanted to keep some of these customers. There were several that we came to terms with, that we needed to part ways. Their expectations and the amount of money we were getting out of the deal versus what they were requiring in resources of us to keep them happy, because it wasn't a good business decision to keep them.
"We also had a lot of channel partners, we were getting 80 percent of our volume from 20 percent of our channels. We had to take a real look at 80 percent of our channel partners that weren't producing very much volume and started to make some cuts. They all required a significant amount of time, energy, resources and money to keep those going. Make sure you re-qualify your customers.
One of the key indicators of a top sales person is being able to qualify their deals. What I mean by that is if a sales person has 10 sales opportunities in their pipeline, the best ones are the ones being able to identify two or three deals to work on to close that quarter the rest they know they have to keep warm. I have seen way too many sales people that are focused on the wrong deals that don't close. Re-qualifying your customer is a good practice particularly during these times.
Tactic number 13: "How many of you have a sales process? What do I mean by a sales process, for example I know how many calls it is going to take in order to get an appointment, how many appointments it will take to get a demo, how many demos it will take to get a qualified project in place and how many of those will end up in a closed deal. I know what my average closed deals are. I know what my sales cycle length is. My entire business is based on mathematics and the numbers. I know how much work I have to do in order to spit out a certain amount of closed revenue. I just got my quota for 2010 and I simply reverse the funnel and just say OK here is my quota for 2010, lets reverse the numbers first. I have to do this much revenue, here is how many deals I will have to close the average deal size in order to get that revenue, here is how many calls I need to make, how many campaigns I have. Basically I work it by the numbers and then know if I can constantly go back to that process it is the mechanics of how you get deals done. This really gets you to the fundamentals by taking all of the emotions out of it and it is simply the numbers. This is what it takes to get closed revenue. Your numbers will all be different, but you know what the process has to be.
Tactic number 14: "You need to start having fun. This is not all that fun especially with tight pressures, budget constraints and especially when you are cold calling, trying to prospect, and you get a lot more no's, the resilience of your ego has got to be strong. Part of it is just deciding you are going to mentally feel good and then do it. I know that is a lot easier said than done. But again I keep reminding myself that all of my competitors are sitting around the water cooler, just worried that they are going to go out of business. So I want to make sure that I am not one of those people. That I am the one that is not worried about it.
Tactic number 15: Is just simple, it is all about execution, nothing happens until you do something. I have interviewed thousands of sales people and some of the most naturally talented sales people I have ever met are the worst, because they are so lazy. I will take a hard worker over a naturally talented sales person any day, because at the end of the day, nothing happens until you pick up a phone and set up an appointment, pick up a phone and set up a demo, get interest, have a dialog. Pick up a phone and talk to a customer and ask for a referral. Nothing happens until you actually work. Pick up the phone, because it is about executing. At some point act. That's a big one for me. Because we are very metrics driven, mathematically driven in our sales process. I have to make sure that the activity levels are high on the top end that they are producing the deals down to the bottom line.
"These are just some high end tactics that I have considered as I have approached my business. I know it may not be quite as relevant as what you may have but hopefully you have been able to draw some things that maybe good for you as well," said Cash.