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The other side of cost cutting

Like me, you've probably had enough with comments from VCs on how to cut costs/plan to weather the deepening recession. For sure, there has been much well-meant advice on the cost-cutting front.

Inevitably, people focus on the cost-cutting front first – it's the foundation for longer survival and sadly has profound impact on people's lives and careers. As I've written in the past, getting to cash flow breakeven places the control of your destiny squarely in your own hands – no longer dependent on infusions of capital for meeting the next payroll.

However, cost cutting is only one of the levers you can pull to reach breakeven. I haven't seen much from VCs on driving the sales front so here's input for the other side of cost cutting – revenue generation.

Sales leverage

Even in a growth market, startups face a headwind in getting their message out and making it heard above the noise. In a down market, it is even harder. It's expensive to knock on doors and find potential customers that a) have the problem only you can solve and b) who are willing to spend money to fix it!

Companies put a lot of effort (and expense) into lead generation programs. Purchasing prospect lists, advertising, trade shows, telemarketing etc. are all tried and tested tools but are still part of a push sell – you want to convert this to a pull.

You have to make it easier for customers to find you.

Simplify the message

When I start working with a company, I listen to how the team describes the problem they are solving and try and put myself in their customers' shoes. Does the customer describe the problem in the way the company does or would they describe it differently? Then I go ask some customers or prospect how they describe the problem.

9 times out of 10, the customer's description of the problem is simpler, more concise and in a phrase suitable for a Google search.

You can guess what I do next… I take that simple phrase and run it through Google to see where (if at all) the company ranks in the search results. Sharing this with the team can be an enlightening experience especially if the marketing folks defined a "new category" to describe themselves; often they are the only occupant of the category and customers give you a blank stare when you describe the category.

So, step 1:

  • Make it easy for your customers to find you!
  • Describe yourself the way your customer describes YOU
  • Use plain language, don't define a complex category

Make it obvious

How many web sites do you look at and instantly "get" what the company does from its home page? Try it for yourself (especially with your own company web site!) – While some sites deliver the message with punch, all too often you have to drill down several levels in the web site to get a plain answer – assuming you can find one at all!

In a world of attention-challenged people, do you think a customer prospect is going to drill down into your site to find out how you can solve their problem? Obviously NOT!!!

Step 2:

  • Make sure you have a clear message on your home page
  • Match the description of the solution to the customers definition of their problem
  • Include an obvious "call to action" (get more information, free trial, demo… etc.)

This isn't just SEO

DO NOT let your marketing folks tell you this is about search engine optimization. Simplifying the message and making it obvious is a critical first step – you want to make sure that your site ranks high in the searches for the RIGHT message – the one that the customer uses to describe their own problem and to which they resonate when visiting your web site. Once you have the message down you can turn it over for SEO.

 

If your sales process is dragging and you're trying to figure out why – start by following the steps above. If the message isn't simple and obvious – FIX IT before you do anything else. Likely, this won't be a simple process because positioning is complex to get right and effects many other things – sales collateral, product specs, and product!

I will leave you with the following food for thought: if you can't deliver a simple and compelling message that resonates with your customer via your web site, how effectively do you think your sales person is going to deliver a value proposition?

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STU PHILLIPS
MENLO PARK, CALIFORNIA

Intense Brit, lived in Silicon Valley since 1984. Avid pilot, like digital photography, ham radio and a bunch of other stuff. Official Geek.

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