BY JACK WARKENTHIEN
In high-tech, the rules have changed. To survive – and thrive – your company needs “culture.” The only culture that will dramatically increase sales and boost profits is a sales culture. Any organization can soar to new heights, or recover from the depths of the valley with the right one. If you are a high tech principal, you are only a few steps away from the top of the mountain! Let’s start up the path together by first reviewing where we’ve been.
One of the largest trends that have been occurring in high tech firms today is the refocusing on business fundamentals. It wasn’t that long ago, when young technology companies that were interested in obtaining outside financing (as most all of them were), the VCs would ask questions such as: “How large is your market space?” “How does this new technology help prospective clients?” “How many years of experience does your management team have?” These were great questions when the Nasdaq was around 5000 and companies were going public a year after inception.
Today, with the Nasdaq steadily climbing back—just north of 3,200 as I type this article– and dot com companies are much more cautious in their respective pursuit of capital, most investors are focusing on revenue growth and profitability, and rightly so. The question du jour is “Are you profitable?” or “How soon will you be cash flow positive?” There’s only one problem. The majority of the companies who received funding recently don’t have a leadership team that is focused on sales and profitability, have the skill set and background to convert contacts and candidates into paying customers and clients. At the end of the day, don’t let anyone fool you: getting “ink” (aka a signed contract) from clients is hard, and getting harder, and that’s the metric that really matters today.
For example, one CEO, “Paul,” has one of the most brilliant minds around: Ph.D., NASA “Researcher of the Year” – literally a rocket scientist – and he can write in 25 different programming languages. However, he lacks the sales and marketing savvy needed. His technology is amazing. He can share his idea and get audiences very excited about his invention. But when the people leave a meeting with him they often say, “Wow, brilliant tech guy, cool idea, but I still have no clue what his product does.”
The challenge: how can firms like Paul’s, convert their solutions into sales, their passion into profits? The answer: get on the right path, and it’s not B2B, B2C or C2C, that matters. It’s P2P – the Path to Profitability. There are really twelve steps on this path. The following sample few represent the most critical first paces.
Seek Help From Experts
Outsourcing is here today and here to stay. Just as firms have been outsourcing functions like HR (Human Resources), and IT (Information Technology), sales and marketing expertise is now available, on a contract basis. Firms, such as Chief Outsiders, help clients gain revenue traction by providing a team of highly accomplished professionals. By converting technology solutions to client benefits, they help their clients get in front of buyers, while helping to build an internal sales culture at the same time.
Adapt A Sales Process
Anybody can “open” one or two relationships—or new accounts– (formerly known as closing deals). To grow an organization and create a sustainable revenue stream, you must standardize your sales approach to the market. The most profitable sales processes are easy to replicate, measure, and enforce. When direct (ie. employees) sales reps are used, their sales plan must reward desired behaviors.
Focus on Relationships and Communication Skills
The two most critical ingredients in any sales culture are the number and depth of client relationships, and the ability to articulate an idea. Imagine the power in converting your technology to dollars added to the top line or dollars earned on the bottom line. When you focus on the client relationship, you’ll realize that your product is just an “enabler,” enabling your client to enjoy many quantifiable financial benefits.
Remember Paul? When he outsourced his sales needs, the sales strategy firm helped him to understand and communicate the true value of the product. Paul’s solution allows publishers to reuse existing content and turn it into a new revenue stream. His software automatically customizes content to fit any individual’s goals and level of knowledge. “I knew that it was a cool technology, but never before had I been able to articulate the value of the product,” Paul quipped. Without outside assistance, his Leadership team built the sales and marketing plan and within 90 days helped him win two new customers, with over 30 companies in his candidate pipeline. Only now is Angel investors and venture capital firms interested in putting more money into his company.
As we scan the market today, we see a large number of entrepreneurs who are brilliant. These people have invented great technology and are already so “sold” on their ideas that they don’t realize others may not be. Because the market has changed so dramatically, it’s no longer good enough to have a great idea. Executives need to be able to communicate their idea to others, and most importantly get other people to pay them money for the value delivered. If you don’t build a plan and a team with a strong sales culture and organization, it is highly unlikely that you’ll gain a positive response when the venture capitalists ask, “Are you profitable?”
Jack Warkenthien, CEO, NextStep Solutions. Email him at
[email protected] or call him at 832-344-6998