How to think when building or reviewing your website …. 101

I want to turn the reader’s attention to websites – an object that evokes responses ranging from an obsessive-compulsive requirement to update, to that akin to a toddler who has seen a new pigeon in Trafalgar Square (with the old website being the previous pigeon).

I don’t sit at either extreme, but I do believe that for the vast majority of today’s companies the website is the ‘shop window’. Now everyone knows that a good shop window pulls in customers – provided it is seen – no matter what the size of the organisation behind the shop. The website provides the entrepreneur with the opportunity to present their wares on a level playing field (the internet) against much larger rivals.

“But I am no designer!” you might cry. Irrelevant; I am not talking here about the prettiest shop window aiming to attract the most conscious fashionista.  This is about getting the right message across to the intended reader.

Have a look here; did that site make any sense? Probably not. To its intended reader, it’s spot on – XP Power is one of the fastest growing companies of its type globally.

So, how can the entrepreneur make sure that they are hitting the (right) mark with the company website? I would advocate the creation of a simple grid – on one axis list your stakeholders (the people you want to communicate with), on the other axis list the reasons you believe people are going to come to your website.  Here are some examples of each:

  1. Stakeholders:
    • Investors
    • Specific customer sets e.g. middle aged men, human resources directors etc.
    • Journalists
    • Potential employees
  2. Reasons for visit:
    • To get contact details
    • Information for an business degree thesis
    • Find out about the company
    • Identify fit between product / service and need

Next, put a cross through each box on the grid that is clearly nonsense, e.g. the box which is at the intersection between the ‘investor’ column and ‘identify fit between product / service and need’ row.

Then review each of the remaining boxes. If you already have a site, match all the pages to the relevant boxes in the grid. Where a page appears in multiple boxes ask yourself ‘can I realistically service all audiences through a single page, or should there actually be multiple pages?’. In some cases, the answer will be ‘no’ – the homepage is the homepage; contact details remain the same for all audiences. In other cases, you might wish to consider creating multiple pages to reflect the differing information requirements of the audiences.

You will also find …. gaps. Be honest with yourself, identifying a gap is a good thing – it shows where you need to put in some work to give your stakeholders the information they need.

A final thought: make sure you are running and reviewing your Google Analytics data. I won’t accept any excuses on this one – Analytics will tell you where your audiences are going, and where you should be focussing your energies when producing content.

Insights from a complex negotiation

Most readers of this blog will be interested in getting to the point that a current client finds themselves in, so I thought I’d record the process we are working through to resolve it.

Picture this: you’ve found an enthusiastic sponsor, got them to buy into your proposition ….. you then find they have opened an opportunity bigger than you could have dreamed of (or given them credit for!).  The opportunity is business changing …. it smashes that sales target ….. the world is about to take a serious change for the better!

You’ve dealt with the sponsor and business user all the way through the sales process, everything makes sense …. then you hit (corporate) reality – an unhappy procurement function.  Why are they unhappy?  Your sponsor decided (almost certainly correctly) that if they were involved early on they’d kill the whole thing stone dead – and the business needs your software so they didn’t want it killed off early.

The call is set up, the agenda point is ominous – “commercial discussion”.  That’s where we find ourselves today.  Time for some scenario planning.

Position-based negotiation – a brief segue 

Just like in position-based warfare, you either win or die in your trench.   Positioned-based negotiation is the same – and thus to be avoided unless you have nowhere to run!

Back to the point

What will come up?  In reality there are actually very few things that procurement can say / do.  They either need to tick a due diligence box to say they checked it all out and understand it – or they are going to try and beat you down on price.

As I see it, there are only really three start points you should prepare for:

  1. The price is too much
  2. They don’t like the pricing structure
  3. Justify the whole piece

The price is too much

So let’s start with the first point – the price is too much.  The price is too much?  How is that possible, we spent all that time with the business users who hold the budget working through it and making it the right fit.  How can it suddenly be too much?

In my experience it can be too much because: a) procurement has a corporate target for reducing initially quoted prices e.g. everything down by 10%; b) the budget that the sponsor and business users identified got spent and they weren’t aware of it; or c) procurement isn’t particularly evolved in this corporate and is spectacularly unimaginative when it comes to negotiation!

So how to respond?  Remembering to avoid a position based approach (“it’s the best we can do”), ask a question: “why is it too much?  We have spent time with X and Y, who confirmed the budget was available, so you need to explain this to us”.  It’s a killer – now the procurement person has to explain their rationale for their statement – if they aren’t coming clean, try a couple of other questions: “do you have a corporate target? Has the budget been spent elsewhere?”  This puts you in the driving seat as you are now asking the questions.

We don’t like the pricing structure

This for me is a classic.  I have a tendency to specialise in subscription-based businesses – I like the model, as it lowers the cost for users to adopt and provides the business with on-going revenue to pay its employees and further develop the software.

However, subscription-based software isn’t old hat to everyone – in fact, some people still think that all software is sold on a license / maintenance basis.  This is not good, because you might have to explain the whole rationale of subscription based software to them, and then break the news that they won’t even own it – and some procurement departments hate not having something they can take away (even though in the long term they are totally powerless to develop it in house!)

There are several ways to address this:

  1. That’s our business model – take it or leave it (bad position-based start!)
  2. The pricing structure is like this because it reflects how we deliver the software – a lot of our costs are in on-going development for your benefit, as well as server space to deliver it across all those different geographies
  3. Give them a quick calculation of the license / maintenance cost – hey, if they want to buy it like that then why not!  So your £50k per annum software is now £127k (£115k+£12k) year one and then £12k for the following two years.  Obviously that’s good for my cash flow and bad for yours, Mr Procurement, plus we won’t be able to deliver you with any of the development benefits over the three years because we are going to have to create a separate instance of the software for you on another service, and once that’s in place we won’t be able to tinker with it in case something goes wrong and affects your business
  4. Ask them why they don’t like it – then knock off all the responses with the standard SaaS arguments – it won’t make them look good, so hopefully they will stop making stupid points fairly quickly!

Justify it…..all of it

This has to be the worst one …. not because you can’t do it, but because it takes so long to do.  You have confidence in your pricing, otherwise you would not have put it in front of them, and you’ve probably already been through this with the sponsors and business users – so it’s just tedious.

Do get some practice in beforehand though – time spent in preparation is time well spent.  In all likelihood the question that keeps coming up as you go through will be “why is that like that?  And why is that like that?”   As I said before, you have confidence in your pricing …… you are just going to have to spend a long time explaining it.  And there’s always the risk that either “that’s too much” or “I don’t like that” is going to come up – if so, I reference you back up to the previous two sections.

Final Thought

Generally you don’t get to a negotiation unless the customer wants to work with you.  Keep that in mind….and you’ll have a successful outcome – and lastly, the only business worth winning is profitable business!

Running a demand generation campaign is a bit like playing pinball

Running a B2B demand generation campaign is a bit like playing on a pinball table.

You can put money into the system and get more balls into play by launching the spring. You control the paddles around the pinball table and you have to make sure you press each one at the right time, just when a ball is about land.

Each ball in play represents a potential customer of yours. The paddles are the various marketing or demand generation activities you have at your disposal. One paddle might represent sending out a newsletter; another might be interacting with potential customers through Twitter; another still might be presenting at an event.

Your goal is to push the balls progressively to the top of the table where they might 'convert' into sales-ready opportunities. You should also aim to prevent the balls from falling through the gap at the bottom. If they do fall through, they are lost opportunities and you'll have to replace them by putting more money into the system.

As a startup you won't have a lot of marketing material, case studies, videos, or blog content. You'll only have a couple of paddles on your table – perhaps a direct email or a cold call. You certainly can push a ball all the way to the top and generate a sales-ready lead using one paddle in isolation, but it's difficult. You're relying on a bit of luck with your timing; and the chances are that a lot of balls will end up falling through the bottom.

As you add more and more paddles (marketing activities) to your table you are effectively giving yourself more chances to keep your potential customers engaged with your organisation. You reduce the chance that good prospects are lost, since you have more ways to interact with them.

You still need to have management oversight of the whole system once it's up and running to ensure that the paddles are being activated at the right time and in the right order. You also need to know when the system is working well enough that you can invest more money with confidence that you'll get the right return. Learn to play this game effectively and you'll have a predictable flow of sales opportunities.

When is an elephant worth forgetting??

Continuing on the theme of elephants….

I was lucky enough to be at GeeknRolla – the excellent TechCrunch Europe startup event – a couple of weeks back, and two very similar conversations I had during the day with online-software entrepreneurs stayed with me.

The conversations with the went something like this:

“We have started to gain good traction in the SME market, we have secured a good channel partner / we are proving that we can scale…now we just need to win a {blue chip / really big} customer to get the next round of funding”

There’s something about winning an elephant customer that seems irresistible: while the idea of having large annual recurring contracts is attractive, for a new company that has worked hard to get its model working and scaling in the SME space, winning an ‘elephant deal’ is almost certainly a double-edged sword.

One of RIG’s former clients had an online enterprise software offering and it was making good progress winning large companies. Then it had the chance to bid for an enormous global customer. In the process of preparing the tender it had become clear that a lot of customization and special support would be needed, but it was such a prestigious account that the client pressed ahead and ended up winning it. 

The strain from having to service the new customer was evident – development resources were insufficient to cover the new customer, continue core development and keep the existing customer base happy. Funds that might have been put into marketing to drive the critical transition from predominantly out-bound to predominantly in-bound lead generation were diverted to providing customized support. It is very hard, even as a growth-stage technology company, to serve multiple masters, and even harder as a start-up. 

If you have worked out how to acquire, deliver to, service, and retain SME customers in a scalable way, then you are already doing very well. SME customers are often under-rated: they can be very dependable, and as a service provider, you don’t have the risks associated with revenue concentration.

Think carefully before you go elephant hunting. Scalability is a key driver of the valuations that SaaS companies can receive. At the point where a company is having to customize and maintain customer-specific resources, it can still call itself ‘SaaS’ but it starts to look more and more ‘old economy’. Savvy buyers and investors increasingly recognise this. So, as ever, if you do choose to try to break into the enterprise market, make sure your assumptions stand up to heavy scrutiny.