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My Turn
When Start-Ups Can’t Sell
by Tom Holzel
It is one thing to show a man he is in error, and quite another to put him in possession of truth.
-- John Locke, Essay On Human Understanding , Bk iv, Ch. 7.
One of the few annoying things about living in England is the seeming inability of the English to give proper directions. Overseas passengers entering the public part of the air terminal after customs are tossed into a melee of people awaiting their disembarking friends. They must turn left or right -- but there is no sign of any kind on which way to go. No sign indicating the taxi rank on the right, no sign for the near-by train to London on the left. Not even an exit sign for how to get out of the terminal.
This inability to see the world from the point of view of the users or customers of a facility (as opposed to the builders of it) is an endemic problem not limited to the British Isles. It is a problem all companies face, and only a few have solved. Small companies (especially start-ups) run by their engineering founders whose expertise may be in building innovative displays, are particularly prone to this malady.
The result is a "communications gap" in which the message the company is broadcasting may be interesting to other start-up executives, but gives no compelling reason why any potential customers should stop and buy. The company founder is pleased with the positive reaction he seems to be getting from his peers, without realizing that this reaction consists of a lot of tire-kicking and well-wishing, but no sales. Suggesting he alter his proud words to be more sales-oriented is taken as a direct attack on his competence, and always results in the repeated demand: "Well, what’s wrong with the website, anyway?"
As a marketing director, VP of Marketing & Sales, and CEO of more than a half dozen companies, I faced these problems often, and was astonished at how obvious they are (to me -- a marketer) and yet how difficult to remedy. Here, after some 30 years in the field of product positioning, is my list of the major marketing mistakes that start-ups and small companies make.
- The company web site as a monument to the founder’s ego.
As mentioned above, this problem is almost guaranteed to face young companies. The founder (and now CEO) has labored so hard on the new company and its product, and is so proud of it and so intimately aware of the blood, sweat, and tears that its realization required, he insists each drop of sweat and each tear drop be lovingly described.
- The web site and sales literature stress engineering achievements rather than customer benefits.
This is another form of unconscious bragging: Look how clever we are. We accomplished miracles. To a prospect who is still waiting to learn the advantages of the product, the reaction may be: "So what?"
- The selling effort is passive rather than active.
Well thought-out web sites and other company communication (sales literature, etc.) sometimes do a good job of describing the product. (Often, websites do a poor job -- see below.) The logical thought process here is that if only they can describe the product accurately enough, those who read the text will recognize its advantages -- and appear out of the woodwork to buy it.
- The product is generalized out of existence.
This common error is caused by a fear of casting too small a net, or by companies with only a single product to sell. Why rule out anyone as a prospect is the fearful question -- which means they so generalize the description of the product as to leave room for everyone. A steak knife -- possibly offensive to vegetarians -- becomes a "manual multipurpose food partitioning implement."
- A single channel is forced to carry all the freight.
This is exemplified by a sales sheet that is jammed with text describing every aspect and feature of the product or service, giving the specifications and the price, and ending up with detailed steps on how to order now. Left out is why buy it at all?
What are the cures for these 5 common errors so many startup businesses make?
The short answer is that all of them fail to make the prospect the center of attention. The hard part is, when you are making something, to be able to think like a customer. (It is impossible to be the horse and the jockey at the same time.) Let us revisit the above errors and see how they might be corrected. But let us first agree what the primary purpose of all pre-contact marketing and sales content should be.
The first step of all industrial marketing and sales activity is to get a prospect to talk with a company salesman. (What the next steps are is another vast subject.) The salesman is not as knowledgeable about the product as the engineers who designed it (which is why those engineers feel so superior to salesmen), but the salesman is much more expert than the engineers at finding out why the prospect might need the product at all. Any company-generated publicity that does not contribute to getting a prospect’s interest up to contact the company (or be amenable to being contacted) must be reviewed to see if it is a waste of money. Sure, a description of how the product works is useful -- but rarely a complete description, which would make further inquiry unnecessary. Rather, a tantalizing partial description does the job, just enough to generate the impulse in a prospect to call to find out if your device or service really can solve his problems. But first you’ve got to get his attention.
Here are the cures for these common errors made by startup businesses:
The company web site as a monument to the founder’s ego. (This is MOST difficult to correct.) Why is this a problem? Because ego-centric information -- like the lack of direction for the air travelers mentioned above -- speaks to the builders, not the buyers. One company made their prototype near-eye displays only for use with the left eye -- because it was much easier for the engineers to build on that side. Too bad that 80 percent of the population is right-eye dominant and couldn't test the device satisfactorily.
The answer is to pretend you are the prospect who is looking for the type of product you make. Define his needs, and his search process. If he is likely to be using a search engine to find vendors on the web, does your company come up early in the listing? Why not?
One company refused to use the common nomenclature for its product because it believed its product was "in a class by itself." Thus, the company’s name never showed up in a web search for its product type. (This is vainglory at its finest.) This same company publishes long tendentious resumes of its executives’ past accomplishments -- a real small-company giveaway.
Prospects calling up category names on the web may glance at 20 hits. How long do you think they’ll spend on each one? The simple answer is: They’ll spend as much time as necessary IF the first seven-second glance at your web site seems promising. Does it immediately confirm that the prospect is in the right place? Or do you believe he has the patience to hang around, waiting for complex graphics to load, or a Cecil B. DeMille video to play out?
Prospects serially looking at search engine-selected websites are not there to be entertained. The website must quickly inform the prospect that he is in the right church. At hand must be easy buttons to click him quickly into the right pew.
One website begins its video highlights by celebrating its 20th anniversary. Is that more important than describing what the company does? (Or is it a sigh of relief that they made it this far?) This same video then gives statistics on the future of web usage. OK, that’s a hint at what they do. But is the prospect really in the mood for a game of Twenty Questions? Only later would the prospect learn the impressive fact that this company has an excellent roster of blue-chip clients -- but only if he’s still hanging around.
Why are motion picture website introductions so popular? Because web designers are responding to company egotism; the executives have forgot the main purpose of the site. Instead, they seem to want their site to be a Disney World of company infomercials, where -- they seem to hope -- prospects will flock eagerly with their families to be entertained. Somewhere, among all the hoopla, the reasons to buy product got lost.
In truth, egomania is an equal opportunity employer, and seems to strike everyone. I have yet to find a small company where the web content is not guarded by a mine field of politics and turf building. In one 100-man company, it was lorded-over by the comptroller, who managed to obstruct any purchase order for a professional web design. In another, the founding Chief Scientist guarded it by doggedly refusing to give up the web passwords. There are only two approaches that seem to work. The best is to have the funding VC or the chairman of the board insist that the web be professionally revamped, period. The second method -- and this would have to be handled very carefully -- is to have customers remark confidentially to the CEO on the amateurish quality of the web, and ask him why his high-priced VP of marketing and sales doesn’t have the sense to clean it up.
The web site and sales literature stresses engineering achievements rather than customer benefits. One display manufacturer’s website described the wonderful success the company is having increasing the lifetime of its unique screen. That was encouraging news to its own struggling team, but a red flag to prospective buyers. A lot of start-ups like to highlight that their product is "the first" of its kind. Being first is a two-edged sword; it certainly means clever engineering, but it also can mean climbing out on a limb with a lack of support or the imprimatur of the market. Is "first" by itself good? Does "first" solve an intractable problem? Many start-ups (and especially display start-ups) are actually only selling the idea of their "product" -- which is still in the form of semi-working prototypes. True, this may be all they have to sell -- but in that case they have to do an especially excellent selling job of touting the putative benefits of their technology.
The selling effort is passive rather than active. This, too, can be a difficult nut to crack. It is an article of faith among engineers that a true and accurate description of the product is all the customer wants or needs. This idea that describing a product accurately is all it takes to sell it is precisely the classic engineers-salesmen split that has narrowed not one whit over the years. (Why is this famous error not taught in engineering school? Think of the many fine engineering inventions that would have succeeded as products, rather than died on the vine as curiosities.) The lesson in today’s highly competitive environment: Products are sold, not bought.
In fact, a full and accurate description may be too much . If a prospect feels he has learned all there is to know about a product, he will make up his mind on that basis -- and not call the company for more information. The company will not have had a chance to fit its solution -- which may not be obvious, to problems the prospect may not realize he has. Thus, the sales message will have failed in its primary goal, which is to get the prospect to call the company. Just as accuracy in telling the wrong story is no benefit to sales, neither is telling too much of the right story.
The product description is generalized out of existence. This error bespeaks a reluctance to target the most likely prospects in fear of leaving any prospects behind. It is a mistaken form of "risk avoidance." By keeping all options open, the accountant believes he is expanding the prospect universe. In fact, that plan actually increases risk by casting out the limited bait shotgun fashion in all directions at once instead of concentrating it in rifle-shot manner where the prospects are congregating. But it is a fear of not knowing the market (or the control-freak problem of not trusting someone else's marketing plan) that drives this approach. One needs to fish or cut bait; decide selectively where the market is, and spend the money to go after it, instead of sitting around passively, tossing out undirected press releases and waiting for the telephone to ring. [Think of it another way: If the most likely prospects won't bite--why would less-likely prospects show any more interest?]
A deadly corollary to this type of thinking is the accountant's inspiration that begins: "If we can get only one percent of the market to buy..." This is not a marketing forecast because, focused only on desired production, it says absolutely nothing about the market. The short answer to this received wisdom is that this "only one percent" will -- in the absence of precise targeting -- more likely result in achieving a zero percent hit rate.
A single channel is forced to carry all the freight. The answer here is to ask what is the purpose of initial sales material -- the web site, product literature, etc. It can not be to do everything at once. Sales literature does its job when someone reading it calls the company to get more information about the product, or is willing to receive a sales call to learn more. There! the brochure has done its primary job in its entirety. It is now up to the salesman to reel the prospect in. And a whole second sales structure (data sheets, engineering visits, etc.) is required to do that job effectively.
Like engineering, selling is a process. During a sale campaign, prospects are brought along a series of sequential stages; each stage must reached before the next one can begin. (This is often called the "sales funnel.") When all stages have been traversed, then -- and only then -- is a sale made. A commercial sales brochure cannot be asked to compress all the stages into one. Unless the product is a complete commodity item (e.g., soy beans), it should not try to acquaint the prospect with the company, describe the product, prove its usefulness, state the price, and provide a mail-in form to place the order (all in dense, unappealing text on a single-sided sheet of cheap paper).
Why, if these product/company positioning rules are so well-known, do most small companies not follow them? I really wish I knew. Most likely it has to do with where peoples' natural talents lie. Just as everyone believes that other peoples’ disciplines are much easier than their own, and just because everyone knows a little about the practice of marketing and sales, it seems everyone thinks he can do the marketing job as an afterthought. Unlike engineering, where if the circuit design is wrong, it blows up noisily; a bad ad is easy to place, and only humiliates silently. But switching hats from engineering to marketing can be a great experience, if you don’t mind making all the mistakes for the first time that every professional marketer has already made a long time ago, and on someone else's nickel.
The most effective solution is to hire a really talented VP of Marketing -- but not as an expensive employee. Most creative marketing effort is spent in setting up a company’s strategic plan. Hire him or her on a contract basis. (In today's economy, there are many talented people to be had.) Three to six months should do it easily. Once the compass is set, any experienced sales manager should be able to work the plan for years to come.
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