Sen. Bennett promotes business in Rural Utah Part II
Don Cash on growing your business in a bad economy, "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," Cash said.
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 renegotiate 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 over usage 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 over usage fees. By pro-actively identifying customers that were going to be going into over usage 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 requalify 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 requalify 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. Requalifying 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.