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The Imperative for Business Founders to Step Aside Post Private Equity Investment

In the dynamic landscape of business, private equity investments often inject newfound vitality and resources into companies, propelling them to new heights. However, a crucial, yet often challenging, aspect of this transformative process is the founder’s departure from the helm of the organization. We often help the founder transition into another role to serve the organizations growth objectives. The skills to grow your family business to this point are often not the skills needed to scale to meet PE objectives. Here’s a closer look at why business founders must consider stepping aside after a private equity infusion.

1. Professionalization and Expertise

Private equity firms bring a wealth of experience and expertise to the table. Their involvement typically ushers in a professionalization of operations, strategic planning, and governance. The infusion of seasoned executives with diverse backgrounds enhances the overall management structure, ensuring the business is guided by a team well-versed in navigating complex challenges.

2. Execution of Strategic Initiatives

Private equity investors usually enter with a set of strategic initiatives aimed at optimizing the company’s performance and increasing its value. Founders, who may have an emotional attachment to their vision, could find it challenging to objectively execute these initiatives. Stepping aside allows a fresh perspective and the unencumbered execution of strategic plans, maximizing the potential for success.

3. Enhanced Corporate Governance

Private equity investments often bring a heightened focus on corporate governance, transparency, and accountability. This shift is vital for sustained growth and compliance. Founders relinquishing their roles can facilitate the implementation of robust governance structures, ensuring the business operates efficiently and ethically.

4. Adaptability to Market Dynamics

Markets evolve rapidly, and companies must adapt to stay competitive. Private equity investors, with their market intelligence and experience, can guide the business through necessary transformations. A new leadership team, unburdened by historical biases, can more readily adapt to changing market dynamics and capitalize on emerging opportunities.

5. Professional Development for Founders

Founders stepping aside isn’t just a benefit to the business; it can also be an opportunity for personal and professional development. It allows founders to explore new ventures, engage in strategic advisory roles, or pursue interests that align with their passion. This evolution benefits both the individual and the broader business ecosystem.

One of the manufactures we helped had a very experienced engineer as CEO before PE investment. Coaching this son of the founder we discussed his real passion was engineering and not the role of CEO. His father, the founder had a gift and passion to grow the business. After the PE investment, the prior CEO transitioned into the critical role of Executive VP of Engineering and led strategic initiatives to launch new products and services that went on to deliver over $10 million in incremental revenues. We continued his coaching and after the first he shared he was happier and felt he was adding incredible value. It was like a huge weight was lifted off his shoulders. It was a strategic shift to drive explosive growth.

6. Alignment with Investor Objectives

Private equity investors typically have a finite timeline for their investment. Aligning founder transitions with investor objectives ensures a smooth exit strategy and a maximized return on investment. This alignment is crucial for maintaining a healthy relationship between founders and investors.

In conclusion, while it may be challenging for founders to relinquish control, the decision to step aside after a private equity investment is a strategic move that can propel the business to new heights. It allows for the infusion of expertise, the execution of strategic initiatives, improved governance, adaptability to market dynamics, professional development, and alignment with investor objectives. Ultimately, this transition sets the stage for sustainable growth and success in the ever-evolving business landscape.

We are often asked to help new CEOs hired to scale PE owned companies.

We help CEOS quickly gather the data they need to write a strategic growth plan that meets and often exceeds the PE firm’s goals.

Let’s schedule a call if you are a CEO recently hired to replace a founder. We’ve helped several of CEOs in this role navigate the cultural shifts and team alignment required to drive explosive growth.

Strategize to Monetize: Mastering Account Plans for Revenue Growth

In the high-stakes business arena, every action needs to contribute to your bottom line. Strategic account planning is a pivotal tool in your arsenal for driving revenue growth. This guide aims to show how to develop effective strategic account plans and implement them.

Understanding Strategic Account Planning

Strategic account planning is a methodical approach to managing and growing key business accounts. It requires a deep understanding of the account’s needs, identifying opportunities for growth, connecting the dots to their key goals and a well-thought-out action plan. It can turn major accounts into significant revenue generators and solidify your business relationships.

Steps to Develop Strategic Account Plans

Developing strategic account plans that are effective and yield results necessitates a diligent approach. Here’s a more detailed breakdown of the steps:

Step 1: Define Your Key Accounts

This may sound obvious, but you would be surprised by the number of sales teams who have not defined their key accounts. We often conduct a net profit by customer analysis that includes the cost of sale and quickly identify the 20% of accounts generating over 20% of your profits. This data analysis tool often surprises CROs with accounts they thought were key accounts but deliver little net profit after we account for our cost of sale. Or accounts that we thought were mid-level accounts that deliver great profit to our bottom line. It is not unusual to discover a key account is not contributing as much to our bottom line as we thought, Here, we develop strategic pricing plans and strategies to improve our profits. We also work closely with sales leadership, product management, and marketing and identify accounts we want to be key accounts in the future.

Step 2: Define Goals

Before any strategic planning, setting clear, measurable, and realistic goals for each account is crucial. Goals could range from generating a specific revenue amount, increasing customer retention rates, and expanding your products or services within the client’s organization to strengthening the relationship you share with your client and broadening your relationships in the account.  A clearly defined goal sets the tone and direction for your strategy. It acts as a compass guiding your actions and provides a benchmark to measure your progress and success. When we train key account managers, we train them to facilitate this discussion with key accounts and not sell them.

Step 3: Understand Your Client

The importance of understanding your client cannot be overemphasized. Dive into their world and equip yourself with an in-depth understanding of the client’s business model, industry dynamics, specific needs, and objectives. What are some of their key objectives, and how can you help them achieve them? Are there certain challenges they are trying to overcome? What are their expectations from you as a service or product provider? An intimate understanding of your client will allow you to tailor your solutions to their unique needs, thereby positioning your business as a valuable partner rather than a mere supplier. Often we need a strong discovery process to uncover opportunities to serve our accounts, and we must equip our key account managers with strong, insightful questions that demonstrate competence while building trust. What key accounts value is a business consultant helping them to achieve their objectives which is masquerading as a key account salesperson.

Step 4: Identify Opportunities

Armed with a robust understanding of your client, the next step is to identify opportunities for growth within each account. We train salespeople on how to conduct a needs assessment. Look for potential areas where your products or services can add value. Are there opportunities for upselling or cross-selling? Can you expand your services to other departments or segments within the client’s organization? Identifying these opportunities is pivotal for deepening the business relationship and boosting revenue. We must speak the language of our customers. How will solving the identified challenges increase revenue, net income, market share, and customer satisfaction? How will the consultative solutions we recommend decrease quality concerns, time, work in process, inefficiency, costs, time to market, and customer dissatisfaction? How will our plan eliminate confusion, lack of alignment, scrap, non-value-adding costs, and time? We train salespeople on how to turn their features and benefits into the language of their customers.

Step 5: Develop an Action Plan

Identifying opportunities is only half the battle. The other half is seizing these opportunities, and that’s where your action plan comes into play. Develop a specific, detailed plan of action to achieve your goals and capitalize on the identified opportunities. This could include marketing initiatives, personalized customer interactions, or the development of new service offerings. Your action plan should be concrete, actionable, and aligned with your business resources. Most account growth plans fall into four key decisions: People, Strategy, Execution, and Cash.

Step 6: Regular Review and Adaptation

Strategic account planning is not a static process; it’s dynamic. Your account plan should be adaptable as your client’s needs evolve, market conditions change, and business strategies shift. Regularly review your account plan to track progress and gauge whether your approach is still effective. Here we agree on key performance indicators and key thrusts we plan to accomplish each quarter. We make it very clear who owns each initiative. What key trusts will your client own, and what will you own? If required, don’t hesitate to revise your goals, change your strategies, or adapt your action plan to keep it relevant, effective, and in sync with the changing business landscape. After all, the ultimate goal of your strategic account plan is to drive revenue and profit growth in a way that aligns with your and your client’s evolving needs.

Implementation of Strategic Account Plans

After carefully developing your strategic account plan, it’s time to implement it. Effective implementation of strategic account plans is as much about your strategy as it is about your relationships. Here’s how you can effectively implement it:

Stakeholder Engagement

Successful implementation of strategic account plans demands high engagement from all stakeholders. This includes your team members who’ll execute the plan, the decision-makers in your company who need to approve and support the plan, and the clients who are at the heart of the plan. Engage your internal team first, ensuring everyone understands their role and how they contribute to the account’s success. Provide the necessary resources and support for them to execute their roles effectively.

When it comes to the client, engage them in your plans too. Let them know they are a valued partner and that you’re invested in their success. Show them that you understand their needs and are committed to delivering value. Here we develop our relational matrix and target and build strategic relationships with other key account team members.

Key Account Sales Skills

As we assess sales teams, we aim to ensure we have the right person in the right role with the right skills. As we have discussed for years, we often have sales hunters and farmers, and each has unique skills to perform their roles to meet their objectives. We assess our key account managers and ensure they have the right skills for account development. They know how to build and deliver a business case. They create urgency and ask for the order ( strong closing skills). They know how to handle objections and recognize common put-offs. They understand and demonstrate the skills to build strategic account relationships and share the value we deliver.

Effective Communication

Transparency and openness are key to implementing your strategic account plans. This is where effective communication steps in. Keep your internal team informed about the plan’s progress, changes, or challenges. Provide regular updates and encourage feedback.

Just as important is keeping the lines of communication open with your client. Regularly update them about how your products or services deliver value to their business, and promptly address any concerns or queries. This keeps them in the loop and builds trust and reinforces your commitment to their success.

Client Relationship Management

Building and maintaining a strong relationship with your client is integral to successfully implementing your account plan. Remember, at the end of the day, business is all about people. H2H, human-to-human interaction, and acts of service build lifetime customers. Even the best-laid plans can falter if the relationship is not managed well.

Spend time nurturing your client relationships. Go beyond just business talks; get to know them as individuals. We train salespeople to understand the buyer’s and accounts’ goals, passions, and challenges. Show genuine interest in their business challenges and successes. Always be responsive, reliable, and respectful. Invest in building a partnership with your client, not just a client-supplier relationship.

The Impact of Strategic Account Planning

When done well, strategic account planning can have a transformative impact on your business:

Increased Revenue – You can significantly boost your revenues by identifying and seizing growth opportunities within each account. Upselling, cross-selling, and improved client retention all contribute to a healthier bottom line.

Improved Client Relationships – Strategic account planning involves a deep understanding of your client and alignment of your offerings to their needs. This positions you as a valued partner and can strengthen your business relationship.

Customer Loyalty – With a well-executed account plan, you’re not just meeting your client’s needs but anticipating them and delivering impressive service. This can earn you their trust and loyalty, making them less likely to switch to competitors.

Increased Profit – Growing key accounts strategically delivers more profit to your bottom line.

Referrals – When we help our clients solve challenges and drive explosive growth, they share our contact information as trusted advisor in their network.

Relationships with new Decision Makers – Strategic account plans often expand our key relationships at key accounts as we interact with other leaders in other departments. These interactions often expose us to other problems and challenge the account is experiencing.

Conclusion

Developing and implementing strategic account plans is a key aspect of account management and a driver of revenue growth. By defining clear goals, understanding your client, identifying opportunities, developing an action plan, and implementing it effectively, you can leverage your major accounts for significant revenue growth. Remember, in the business world, it’s not just about strategy; it’s about strategizing to monetize.

Let’s schedule a call if you would like to discuss key account plans you have and or develop new ones.

Seven Innovative Ways to Drive Strategic Growth

The lifeblood of any company is its ability to grow and expand. Without growth, a company will eventually stagnate and die. This can be difficult for business owners, as it requires creativity and innovation. This blog post will discuss seven innovative ideas for company growth. Some of these may be familiar to you, while others may be new concepts entirely.

Diversification

Renew and update your business model

Voice of Customer Research

Focus on Customer retention

Invest in technology

Expand your Marketing Efforts

Sales Training and Coaching

1) Diversification.

One way to ensure growth for your company is to diversify your products and services. This can be done by expanding into new markets or developing new products that appeal to a broader customer base. By doing this, you are not putting all your eggs in one basket, so to speak, and therefore reducing the risk of stagnation.

Diversification can be difficult as it requires detailed market research and a thorough understanding of your target audience. However, if done correctly, it can lead to significant growth for your company.

Some ideas for diversification include:

  • Expanding into new markets
  • Developing new products or services
  • Offering customized solutions
  • Focusing on niche markets
  • Expanding your business through Franchise Direct to reach and increase your customer base

2) Review and Update Your Business Model.

Another way to spur growth for your company is to review your business model. This means taking a close look at the way you do business and seeing if there are any areas that could be improved. This could involve anything from streamlining your processes to changing the way you market your products or services.

Reviewing your business model can identify areas where you may be losing money or customers. Once these areas have been identified, you can then take steps to rectify them, leading to increased growth for your company.

What should you keep doing?

What should you start doing?

What should you stop doing?

3) Capture the Voice of Your Customers:

Think about all the changes businesses have gone through during and post pandemic. How much has your business changed? Market leading organizations are conducting voice of customer research to better understand how buyers buy, what criteria they are using today to make buying decisions and understand your customers overall satisfaction. We recommend having a third party conduct this research to remove the concerns with bias. However, we recognize some clients cannot afford to engage our firm, so we wrote an eBook to help you Leverage the Voice of your Customers to increase revenue.

4) Focus on Customer Retention.

Acquiring new customers is important for any business, but it’s also important to focus on retaining the customers you already have. This can be done by providing excellent customer service and developing long-term relationships with your clients.

In one study 89% of CEOs shared having strong relationships with their clients is key to their success but sadly only 24% of those CEOs provided sales skills training on how to build business relationships.

Focusing on customer retention can ensure that your current customers remain loyal to your brand. This loyalty will lead to word-of-mouth marketing, which is one of the most effective forms of marketing. In turn, this can lead to increased growth for your company.

Some ideas for focusing on Customer Retention:

  • Developing long-term relationships with clients
  • Offering excellent customer service
  • Focusing on customer satisfaction
  • Building a solid brand identity
  • Leverage data and build win-win
  • Build multiple relationships with key account decision makers

5) Invest in Technology.

Technology is always changing, and it’s important to stay ahead of the curve. Investing in new technology can improve your products and services, making them more efficient and effective. This can lead to increased growth as your customers will be more satisfied with your offerings.

It’s important to note that you don’t need to invest in the latest and greatest technology; sometimes, simply investing in updating your current technology can be enough to spur growth.

Some ideas for investing in technology:

  • Audit your current sales tech stack
  • Updating your current technology
  • Investing in new software or hardware
  • Automating processes
  • Improving website design

6) Expand Your Marketing Efforts.

Another way to encourage growth for your company is to expand your marketing efforts. This could involve anything from increasing your budget to launching a new marketing campaign. By developing your marketing, you will reach a wider audience and generate more leads, which can lead to increased sales and growth for your company.

Some ideas for expanding your marketing efforts:

  • Increasing your advertising budget
  • Update your value message by business persona
  • Launching a new marketing campaign
  • Investing in digital marketing
  • Developing a social media strategy
  • Speak in the language of your customers
  • Market solutions not products

7) Sales Training and Coaching

Buyers have spoken and 33% chose not to work with salespeople today and the numbers are growing. In one study 85% of buyers shared they expect a salesperson to connect the dots between what they sell and how it can impact the buyers bottom-line. Sadly, less than 15% of salespeople do this today. In a one-hour meeting with the average sales rep how many minutes were valuable to the buyer and or decisionmaker? SIX! Only six minutes because salespeople show up, throw up and they pitch slap their customers when they should be having conversations that lead to revenue.

Some ideas to train your salespeople

  • Complete a sales effectiveness assessment
  • Identify sales skills gaps
  • Train salespeople to close gaps
  • Equip sales managers to coach the new sales skills

In conclusion, there are many ways to encourage growth for your company. By implementing some of the ideas listed above, you can take your business to the next level. So, what are you waiting for? Get started today and see the results for yourself!

As always if your tea needs help let’s schedule a tie to chat.

 

 

Professional Services Marketing; a Must Add to your Business Book Library

 

When I surveyed CEO’s years ago, I asked; what is it that worries you? A common answer was ; not knowing about something new that could help my business, help us grow quicker and more profitably. I have to admit that makes me anxious as well. What if what has my hair on fire today has already been solved by someone else (in my experience is always has) and I am suffering needlessly?Wasting time trying to solve a problem already solved?  I received a copy of of the book: Professional Services Marketing in the mail , second edition, and found it helps solve that common problem business leaders share as it relates to marketing.

 

 

I enjoy receiving new books, new thought leadership in the mail. I often have authors reach out asking me to read their book and talk about it in my network communities and in my blog. When the team from Hinge Marketing contacted me about their new book I could not wait to receive it as I follow their content on a regular basis and find it smart and easy to  apply. The good news when you love reading is that  you are always learning something new. I had a mentor at Frito Lay once say; remember Mark, Leaders are Readers, and that has stuck ever since.

 

 

A common problem in service businesses is marketing. I have served a number of service related businesses; marketing and advertising firms, a third party administration firm for retirement benefits, financial advisers, attorneys, the market leader in product management and marketing seminars for high tech companies, internet marketing and blog service providers, PR firms, a podiatrist, a chiropractor, a software company that helped doctor’s offices become paperless, and sat on church boards ( the ultimate service business if you ask me)…to name a few and marketing was always a struggle. The most ironic of those were the marketing and advertising firms as well as PR firms who sold marketing services and created strategies to help businesses grow for their livelihood, but they struggled to market themselves. This gives me pause ….why? and what can be done to solve this market problem?

 

You do not need to figure this one out on your own…

 

Read the book: Professional Services Marketing, How the best firms build premier brands, thriving lead generation engines and cultures of business development success.

 

The authors; Mike Schutz ( co-president of RAIN Group) , John Doer ( co-president of RAIN Group ) and Lee Frederikson ( Managing Partner at Hinge) are seasoned professionals who learned how to serve their clients in the trenches, out in the markets with the rest of us. They are not theoretical but practical in their approach and application of the principles they share in this book. Their content is research based and I have followed their thought leadership independently for some time.

 

I must say I was skeptical when the book arrived (sorry guys) as I am a huge fan of the first edition of this book and I wondered how they could make it any better. I still have my copy highlighted with notes to myself in the margins. I remember buying copies of it when it came out in 2009 and sending it to clients and would be clients who were are struggling with how to market their services. However what I found was this second edition was needed as the authors point out;

 

In the old days, professional service firms could survive without much marketing effort. Put together a team of good people, deliver strong services to clients, and you might get by just fine on repeat business and client referrals. ..today you also need smart, effective marketing and a culture of business development success to attract a steady stream of clients and grow your business in an increasingly competitive world.

 

The second edition continues their field tested , research based approach to providing advice you can apply but also adds content about social media marketing, the importance on line marketing plays and they share case studies by market leaders we all know and admire. In one chapter they discuss; The battle to attract and retain a quality workforce is a key success driver in many professional services firms. Having lived in this world, when the authors share their thoughts on topics like this it immediately makes them credible….they have walked in my shoes and their content resonates with me. In another chapter they share what I refer to as politically incorrect secrets of most service firms; they spend way too much time focused on their competitors and not enough time understanding their ideal client and their problems. Been there, done that, lived that, helped my clients through that.

 

After finishing the book I have only one criticism: what this book shares is not just true for “professional service firms” but all the companies I have served. Many industries face the same problems and all would value reading this book and applying its principles. I hear the authors saying; “what Mark did you miss the chapter on identifying and focusing on the best market?” No, I did not miss your point and I believe in what you are saying. However what I have found is businesses from large manufacturers of mechanical equipment in the B2B market to B2C consumer product companies would value the advice found in this book. The reality is none of us are in the widget making business, we are all serving our markets, solving their problems while identifying the new ones that arrive. The sooner businesses adapt to what I teach in my seminars; “serve don’t sell” the faster they will see rapid, profitable growth. I think every church pastor needs a copy of this book. You solve so many problems for people ….if they only knew….that’s a marketing problem that has already been solved in the wisdom in this book.

 

I highly recommend you add the second edition of Professional Services Marketing to your list of books within arms reach of your desk. You will find yourself reaching for it often for practical advice that works in the markets we serve today just like the book: Crtl Alt Delete that I shared a few weeks ago.

The Toughest Sale an Entrepreneur Can Make….Investment Capital to Grow

 

I enjoy sales, I really do. I see sales as the ultimate example of serving others. You connect with people in your market that may have problems your product or service can solve, and you help them solve their problems. For me it’s the ultimate rush helping clients solve problems they have struggled with and felt they must learn to live with. However there is another sale entrepreneurs have to make that is not nearly as fun and can be emotionally and physically taxing if you do not know what you are doing…raising investment capital.

Typically the companies I serve have the capital and or are self funding and I am asked to create a repeatable sales process, based on how their buyers want to buy. Then I train their team how and when to use the sales tools we create for each step of the new sales process. In one instance however, a company I was asked to turn around lacked adequate access to capital to truly scale the business. So I approached raising investment capital as I would any market with various buyer personas , but in this case what I was selling was the viability of the business and future potential. I found there are basically five ways to fund your growth and each has its own characteristics, requirements, needs and challenges. Over a three month period while out making sales calls with customers, I met with as many “potential buyers” for funding as I could to understand  shape and I even named my buyers, my ways to raise funds.( I had way to much car time, so stick with me)

Self Fund through sales revenue – “Willy Lowman”

 

State and Government Grants – “Annette to detail”

 

Friends and Family- “Have-I” , as in have -I got a deal for you

 

Angel Investors- “Michael”, like the archangel

 

Venture Capital –”Barbra”, from the show shark tank

 

The first I called “Willy Lowman” from Death of a Salesman. You are out chasing revenue, cold calling, following up on every potential lead, and networking like crazy. You bootstrap your way, working 12-14 hours a day meeting with clients who could provide that next big order. At night you stuff envelopes with letters and brochures, and scour the internet using social media tools searching for the right contact to speak with at your future targeted accounts.

Characteristics– You often find yourself bunking on friends couches and driving great distances simply because the meetings need to occur but you lack the capital to afford air flights and hotel rooms. You have a passionate connection to your product and you have the ability to sell convincing presentations that drive early orders. You may hire independent sales representatives to sell your product on straight commission, but quickly find they too require time, your most precious asset at this point.

Requirements – You have to be skilled at taking inventory of what you have to work with and leveraging it to the best of your ability while always being cognizant of the businesses cash requirements, cash flow. You personally will do without.  You need tenacity, good old fashioned (excuse the expression)… “piss and vinegar”. You will have many doors slammed in your face and you will need the ability to press on in the face of adversity. You know the “right” way to get orders, but you lack the capital today, so you do what you need to do. I have 50 other ugly truths in my eBook you can download off my blog. You have to possess the ability to create learning’s through each transaction and adapt quickly.

Need – samples, sell sheets and a clear understanding of the problem you solve, and who potentially has that problem. With some of the software out there today and help from friends in your network you can create some professional presentations and sell sheets. You must have a web site.

 

Caution – it’s not unusual to start a business this way trying to sell your way to success, however know that it is not for the faint of heart, and if you do it for too long you too run the risk of going nuts like our buddy Willy. If whatever you are launching cannot gain traction and begin to result in predictable sales revenues within 12-18 months, cut bait! Chances are you are pushing mud uphill and you have not answered one of the four questions with a yes.

So how about you…have you launched a business on shear tenacity? How did it turn out?

 

As you look back, how long were you in the bootstrap mode? (Or are you still in it?)

 

What did you find the hardest part of this phase?

 

What advice would you give someone who has desperately tried to scale their business, their dream for 18 months with no success?

The key to funding I have learned over time is to truly understand where your company is on the business growth continuum. Is your business pre-cash, do you have a few customers, some revenue… but needing capital to scale, ….?

Once you clearly understand where your business is, you can connect to the right kind of funding. As you move from self funding / friends and family to Government Grants to Angel investors to Venture Capital, you must clearly understand where you are at and what your buyer (investor) requires.

What I have experienced is friends and families are investing more in you and your abilities than the business. They are looking at your past success and your personal abilities. They have a personal relationship with you.

Government Grants/ other Grants are focused on answering a specific issue. You must be skilled at writing grant applications and clearly answering how your product falls into their grant offering.

Angels fund from small $20k investments up to $2 million from larger angel funds. Angel funds are groups of angel investors who pool their monies and invest in companies. Sometimes members of the fund may also wish to make “side car” investments in addition to the fund investment. Angels focus on;

  • proprietary product and or technology
  • leaders ability to lead organization, monetize opportunity
  • the market and your product solution’s potential
  • your team and its ability to execute
  • your exit plan, who would be potential buyers, or do you plan to go public

Venture Capital traditionally invests in opportunities over $2 million. They are industry specific and the cost of their funds in terms of equity in your business is often much greater. They are focused on return on their investment. They have specific business valuation models and your engagement with them will feel more like a business transaction than a relationship. VC’s will receive 1,000’s of pitches each year and only work with a select few companies that match their criteria. I recommend you watch the show Shark Tank and pay attention to the discussions, the interaction as it will prepare you for possible discussions you may be having should you pursue VC funding.

If you are an entrepreneur and feel the next step to truly scale your company is funding, make sure you understand where your company is at, and what type of funding source best matches your needs. If you are like me, you will find it the most challenging sales process you have ever experienced!

Why Can’t Salespeople Sell New Products?

The CEO said…” Why can’t my salespeople sell new products” ? I hear this frustration from business leaders often. The assumption is the salespeople are not capable, but the reality is they can sell new products if they are provided a strong value proposition and sales tools that guide potential buyers through their buying journey. If your new product or service clearly provides four yes’s then it will not feel like pushing mud uphill during launch. However far too often new products are thrown over the wall from engineering and product management and sales are told …”just make it happen”.

The reality is you do not want your salespeople spending time figuring out how to sell the new product.

Salespeople follow the path of least resistance to revenue.

If your new product lacks a clear value proposition, sales tools designed for specific buyer personas, and a history of poorly launched products your launch may be doomed.

Equip your sales team to gain new product sales velocity by clearly understanding the problem you are solving for your buyers and the buying process and criteria they use to solve their problems.

How successful is your team with new product sales launch?

 

Does your new product offer a quick path to revenue or does it feel like pushing mud up hill for your sales team?

 

Can you afford to have your salespeople figuring out how to sell a new product while your core product sales suffer?

 

Are new product sales an Art or Science in your organization?

Is your Market Strategy one of a "Hawk" or a "Dove"? …

 

Market leaders understand the importance of working their plan, and they do not focus on “crushing” the competition, but they do passionately serve their markets. (Doves) Market losers focus their energies on “beating”and “crushing” the completion and have little understanding of the problems of their buyers as their entire focus is on their competitor(s). (Hawks)

Doves strategically and passionately set out to solve their buyer’s problems. Hawks try to swoop in and destroy competitors who may or may not be perched with an understanding of buyers, their problems and buying criteria. (they are only as good as their competitors…who chances are do not understand their market) Ironically, Hawks actually believe their competitors must know the market or they would not be trying to “beat” them.

The trouble occurs when you chase the quest to destroy competitors you fly even closer to your competitor and farther away from understanding your market.

 

One of the benefits of working with a variety of business leaders is listening to their stories. Recently I met with an entrepreneur who shared how he learned one of the most valuable lessons in business strategy  long ago when he served the Marriott Corporation. He described their training and one of their sessions was called “Hawks and Doves”. In this exercise they broke off into small groups and were presented a business challenge. Predictably, everyone fell into the trap of wanting to attack and crush the competition as a Hawks. Admittedly there is a sense of machismo ego in being a Hawk after all. However the problem with being a Hawk is there are always Eagles who can swoop down ( out of seemly no where) and destroy you. Doves however are singularly focused; serving the needs of their market.

As Hawks, you rely ( focus) on your prey,… in a way you are counting on their smarts, their understanding of the market….a follower strategy.

This entrepreneur went on to share how when Marriott would have a location oversold they would have a network of other hotels they would send customers to. On the surface this may seem odd, right? However Marriott is and has been consistently one of the top hotel chains in the world. Their quality and service are consistently recognized as market leaders.

Market leaders serve their market.

Market losers focus on killing competitors.

When I wrote “are you a Pit Bull or a Poodle?” I shared the tenacity entrepreneurs must have . They have a  sence of ownership and not a victim out look. However I do not want to leave you with the impression that means attacking and chewing up your competition. Pit bulls have a fierce tenacity and jaw strength that insures when they clamp down on unresolved market problems and they do not let go.

 As Pit Bull entrepreneurs you clamp down on your commitment to solve your buyers’ problems with your product or solution, but do so with the market serving strategy of a Dove.

How about your organization…..

Is your focus that of a Hawk or a Dove?

How’s that working for you?

Does your mission statement sound like a Dove strategy but you work for a Hawk?

 At the end of the day, it’s about your team’s intentional focus. Are you focused on serving your market or destroying the competition?

Pick wisely…

What does it mean to “ Play life like a champion”

 

 

In my recent post; Are you a Pit Bull or a Poodle I share a quick test I give clients who are considering entering the entrepreneurial game.  One of the key indicators you are a Pit bull is you ;

“Play life like a champion.”

 

So what does it mean to play life like a champion?

 

Having lived in North Canton Ohio most of my adult life the Pro Football induction ceremonies and celebrations are a big event we looked forward to each year. Aside from the parades and ribs burn off I often would  listen to the speeches recognized Hall of fame champions gave when they were inducted.

This year was not exception as Emit Smith’s speech was one all business owners setting out to be the dominant market leader in their field should listen to. Below are some key bullet points I gathered from his speech;

  • don’t set out to be good, set out to be the best

 

  • write your goals down and they become real

 

 

  • study the greats that went before you

 

  • demand excellence of your self and those around you

 

 

  • be thankful each day you are blessed to be playing

 

  • rarely is personal recognition won without the contribution of others

 

 

  • share your goals with others who will hold you accountable

 

 

  • understand it will take sacrifice and make sure you are willing to do what it takes

 

 

  • Never, never ever give up

 

I found this speech particularly inspiring as so many business owners and their leadership teams face challenging times.

As leaders we must be intentional about the values and principles we weave into the fiber of our cultures. Just as goals not written down are just dreams, failure to intentionally state and reward the behaviors you desire of yourself and your team is a mistake as champions do not “just happen”.

Hall of Fame Football champions do not “just happen”, they are born of a relentless desire for excellence.

So how about you…..

 

Do you have a clear written goal that demands excellence to achieve it?

 

Does your team clearly understand the goal and the path required to achieve it?

 

Does your team reward the behaviors of champions?

As an Entrepreneur are you a “Pit Bull or a “Poodle” take the test…

 

As I discuss in my EBook: The 50 Ugly Truths about starting your own business …and why you should do it anyway,… the way of the entrepreneur is not for the faint of heart. Chances are you clearly see a problem in a market you know, and you set out to solve it with your product or service solution. One characteristic all entrepreneurs possess is the tenacity of a Pit Bull.

Some time ago I came across a test  I often share with clients that asks the question:

 

Are you a “Pit Bull” or a “Poodle”?

 

Pit Bull Test


1. Do you have a definite purpose backed up by a burning desire to see it fulfilled?


2. Are you continuously in action working on your plan?


3. Is your mind closed towards all negative and discouraging influences from foes, “friends,” dysfunctional parents, music, books, tapes, T.V. etc?


4. Do you hang out with people who are greater than you in what they have accomplished and who utterly challenge you to excellence?


5. Are you self-reliant and independent?


6. Do you take responsibility for your life, both failures and successes?


7. Do you hate it when you waste time?


8. Do you look at life as a game to be played and played like a champion?


9. Have you become impervious to the criticisms of pusillanimous men and women?


10. Do you boldly face your fears with faith and move towards your goals?

 

 

Poodle Test


1. Do you often complain about your life?


2. Do you avoid association with people who have accomplished more than you?


3. Does your life seem futile and your future hopeless?


4. Do you often feel self-pity?


5. Are you envious of those who excel you?


6. Do you worry a lot?


7. Are you overly cautious and negative?


8. Are you indifferent and lacking in ambition and enthusiasm?


9. Do you constantly use excuses and alibis to explain why you haven’t accomplished anything?


10. Do you often fantasize about lying on the front passenger seat of a Cadillac with a pink ribbon in your hair with your favorite chew toy?

Ok, no one else is around….how did you answer the above? You must be real with yourself. Not everyone is cut out for the entrepreneurial game and that’s ok.  Some people are much better as soldiers than generals leading the charge. Some people intentionally chose not to risk letting any of the key plates drop and they serve teams.

The above questions are a great filter to guide you to see if the entrepreneurial game is for you. As I recommend in my EBook make sure you enter this game with a clear understanding of what this role will entail and you have realistic expectations for performance and cash flow.

So how about you…are you a pit bull or a poodle?

 

In your current role what should you be?

 

If you are in a role that requires a pit bull and you find yourself a poodle, what should you do?

Attention Entrepreneurs; You Can’t “Manage Fruit Ripe"

 

 

 

They say that which makes us strong can also be our biggest weakness. Entrepreneurs are no exception to this rule as our driven, confident, and focused nature can often inhibit new product success. Entrepreneurs often have such confidence in their personal abilities based on past success they take shortcuts in launching new products and when sales fail to meet plan they believe they can “manage fruit ripe.”

“When it comes to new product sales; you can not manage fruit ripe”

 

After my last post I had a number of people reach out to me saying: “ Ok we get it, we should do research prior to launch …but what should we do if we are in a launch that is not hitting plan?” As I have shared in past posts…I have made a number of mistakes over the years.I have kicked off new products and then had to figure out how to make it work; “make it happen ” on the fly.  So I thought I would do a follow-up post and share what I said to those who contacted me directly.

Entrepreneurs who launch on gut and not market truth often start trying to “manage fruit ripe”. They are so tied to their  plan their failure to achieve goals has to be a sales problem. Based on my experience, over 90% of new product sales falling short of plan are not the result of “poor sales execution” but the result of not having good current data  and or understanding of your market, and is actually a marketing problem. Without current accurate market data one if not all of your four P’s of markting are probably wrong. Entreprenuers are smart people. If given good information they make decisions that grow businesses profitably. If given old or wrong market data one or more of your four P’s will be wrong.

As the owner, leader,you are the boss… so if you want to try to manage the fruit (sales) of your new products ripe… go for it. I have seen many try ( heck, I have tried) and I have yet to see this approach correct new product sales below plan and create sales velocity. 

If you find yourself in a launch based on gut and old or poor data, what should you do?

 

  1. Assess what you have learned ( experienced) during launch so far
  2. Conduct win loss interviews
  3. Identify common roadblocks to sales and bust through them with new sales tools
  4. List what you still need to know and assign priority and timelines
  5. Adjust your strategy based on the current market data you gather
  6. Test new strategies before you scale them
  7. Repeat what works
  8. keep asking questions, determine why customers are buying and not buying
  9. Challenge your four P’s of Marketing ( at least one is off)

 

( or put another way; get the data to answer the four yes’s …as quick as possible)

 

 

So how about you…have you launched a product without having four yes’s first?

 

What did you experience ?

 

What corrective action did your team take?

 

Does it take longer to do research on the front end? Or fix roadblocks during launch?

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