Tuesday, July 29, 2008

Look for the Curve Ball

As a new entrepreneur, you'll face the question of whether a prospect’s business is worth your effort. You're like a hitter at the plate watching a variety of pitches coming your way and trying to decide which ones are worth taking a swing at. Because you need customers, it will be tempting to swing at everything.

Types of pitches (prospects)
The first pitch is a sweet one right in your wheelhouse, which means your solution addresses the prospect’s needs so perfectly that it’s like getting the perfect pitch to hit out of the park. One easy swing and BAM you have a new customer. You barely broke a sweat as a result. These prospects don’t come around often enough.

The next best pitch, which you may see most frequently, comes in a little high and outside. You’ll have to reach a little, but it’s still possible to get some good wood on the ball. Your solution matches most of the prospect’s requirements. With a few adjustments or enhancements, you can address her needs thoroughly. You make the adjustments because

1) you need customers and revenue and

2) you recognize that the adjustments would appeal to other prospects.

Perhaps some of those adjustments can even wait until after the prospect becomes a customer, and you develop a level of trust. You may even come to appreciate this type of pitch more than the “perfect pitch” because you improved your product/service as a result.

You have to give the closest look at the third type of pitch. It is so far over your head that it will smack against the backstop unless you make contact. You can hit this pitch, too, but you’ll probably need a stepladder. The payoff might be sweet in the short term, but is it really worth the effort?

The pitches headed for the backstop come from clients who would require all sorts of enhancements in order to get exactly what they want. In fact, their requirements may change your offering in a way that bears little resemblance to what it looks like now. On the other hand, you may make a lot more money off this one deal than all the others. It may be a long time, if ever, before the necessary enhancements would benefit your other current prospects. Those changes could even make your product/service less appealing to your regular target group.

You have to decide, particularly in the early days of your company, if you should take a swing at this pitch or let it go by. You will hear a lot prospects say, “Your stuff is nice, but it would be really great for us if it just had (fill in the blank).” Yes, it would be great—for them. But would it be great for your company?

Listen closely to your prospects. Some of their suggestions could have you chasing short-term revenue at the sacrifice of long term potential for your company. However, your prospects will often have legitimate ideas to make your offering better. No one knows their industry better than they do. If their needs have been unmet for a long time, they're also be the needs of their competitors.

If you really listen to what your prospects are saying, and if you are more interested in becoming successful than in simply sticking to your original vision, you'll give your venture a better chance. Certainly, your company may not bear much resemblance to what it was in the beginning, but part of the difference could be a little thing called PROFIT.

Many ventures have changed dramatically from what they started out doing. But they are still in business.

Tuesday, July 1, 2008

…But don’t degrade them.

No matter how desperate you are to get your first customer, never talk bad about your rivals. It’s unprofessional. That should be reason enough to say nice things, or at least to remain neutral on the subject. Prospects don’t want to buy things from companies that look bad. If you try to throw your competition’s reputation down a hole, you’re likely to be chained to them when they go. You’ll get just as dirty as they do.

The second reason you should never denigrate your competition is that you may inadvertently send them business as a result. This happened my company the other day: A call came in from someone looking for online registration software. The call was quite fortuitous because it just so happens we sell online registration software. Until that moment, we did not know this person’s company needed software like ours. In fact, we did not know the company existed. Until a short time before that, the prospect did not know we existed either. We can thank one of our competitors for that.

“How did you find out about us,” we asked.

“From one of your competitors,” the prospect answered. “I asked them who their competitors were. They specifically mentioned you and went on and on about how bad you were. They got me so intrigued about you that I just had to call you and see for myself.” One hour later, that prospect became our customer. It was one of the shortest sales cycles in our history. Maybe we should have shared some of the sales proceeds with our competitor to thank them for the lead.

Maybe we should ask them to keep up the good work.

Conversely, a prospect asked us a few days ago to name a few of our competitors. “There are quite a few good ones,” we said, acting as if we just loved talking about the competition. After we named a few, the prospect asked how we differed from them. (This is a beautiful question to hear during the sales process.) “Well,” we said, “as we mentioned, they all are good companies. It’s just that we do things a little differently.” After we outlined a few of the key differentiators, the prospect said, “That’s what I thought, too. Thanks for confirming it.” We used our rivals to point out certain advantages we offered without talking negatively about them. Not only was there no need to denigrate the competition, we had the opportunity to compliment them to our advantage. We only looked better—more professional—in the prospect’s eyes as a result.

If you are comfortable with your offering, and confident that it matches up well with your competition, you should not be afraid to mention them, and to compliment them if applicable. Prospects will be much less curious about them, and that much more impressed by you.
You will occasionally get calls from competitors masquerading as prospects. These calls are a sweet nuisance. Not only does it mean your competition is aware of you, it also means they want to discover why your customers choose you. When a rival first calls you, pretending to be someone interested in your product/service, be delighted. It proves you’ve arrived because your competition is keeping an eye on you. Soon they’ll be worried about you. Later, they’ll be working for you.