Simplifying distribution through case studies

By Marielle Voksepp

Like a kid in a candy store: Which distribution channel to use?

I received an email today from one of our regular Entrepreneurship 101 participants thanking MaRS and Mark Zimmerman for putting on “one of the best lectures (they) have had the pleasure of attending”.  Read Kalpesh’s email below…

The Power of Case Studies!

Mark Zimmerman’s lecture on distribution, a seemingly complex and relatively dry aspect of business, was anything but dry. In one hour, Mark taught us some valuable lessons through a mix of theory and case studies. In the theory section, Mark explained a distribution framework and the case study was about Nespresso, which helped provide a very real context.

As a fledgling entrepreneur, I have a ton of distribution choices and I have been struggling to find the optimal distribution set-up for my business. Mark said it’s OK to mix and match between direct and indirect channels and the choices therein, but he also advised to optimize a distribution channel before taking off in many directions. I found Mark’s framework particularly useful as it provided clear sign posts for the choice of distribution set-up based on specific factors such as market type, stage, complexity, price and customer preferences. (Please view lecture video for further explanations).

As Mark talked through those factors, I found myself quickly mapping where my business fell within that framework. I am happy to report that I walked out of that lecture with much less uncertainty than I had going in.

And the lecture got better. We covered the Nespresso case in detail and bits from other cases including Apple, Zappos, Threadless, Zara and even Dell. These cases really helped provide a realistic perspective. It added relevance, made that distribution framework practical and, even though it was a serious problem faced by Nestle, a global multi-million dollar corporation, I could totally see how someday I might be in Jean Paul Gaillard’s shoes facing a similar problem with my company!

My thanks to Mark Zimmerman for a fantastic lecture!

Kalpesh Patel
Co-Founder & President, Lifestrummer Inc.

On behalf of the ENT101 team, we thank you for your valuable insights and welcome other participants to blog on our lectures as well. Please contact entrepreneurship101@marsdd.com.

Downloads & Resources:

• Video: Mark Zimmerman on Distribution
• Mark Zimmerman’s Slides: Distribution
• Entrepreneur’s Toolkit – Distribution and channels: Kotler on marketing
• Entrepreneur’s Toolkit – Case Study: Dell-distribution and supply chain innovation

Reposted from MaRS

Marielle works as part of the education team at MaRS. She helps entrepreneurs get access to business resources both online and in-person.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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How to sell value to your customers

By Marielle Voksepp

Sales is a process.  It’s not done part-time; customers need to feel a connection to the sales person and want you to interact with them differently for different types of products. Companies often focus too much on the technology or product instead of the customer view and customer benefit.

At the latest Entrepreneurship 101 lecture on Sales, MaRS advisor Krista Jones discussed the principles of “selling value” to customers.

Watch the lecture video and read on to find answers to these commonly asked questions:

What role does selling play in a start-up?

Your business doesn’t start until you sell something.  Selling is a part of marketing and a sure way to test your product and all other company processes.  As a company leader, you need to be directly involved in selling activities from beginning to end.  Direct customer interaction will also help you build and improve your product and organization. Read more in our Entrepreneur’s Toolkit article, “Sales 101: The role of selling in a start-up.”

What is a sales funnel?

If you’re running a business you have to have a sales funnel – it describes your sales process from beginning to end and allows you to remove barriers to a sale.  Choose your sales channels fairly simplistically and find out how your customers want to be reached. Don’t confuse your ultimate goal with your first few sales – focus your attention on opportunities that remain in the funnel.  Read more in our Entrepreneur’s Toolkit article, “Stages of the sales funnel”.

How do I prepare for a sales call?

Preparing for a sales call takes time. There are several tools available to help you organize the information you will need:

• The stakeholder management chart
• The sales call talk track
• The pitch deck

Make time in your schedule to meet with potential customers, book a sales call and follow these five steps to be well prepared:

1. Prepare the stakeholder management chart
2. Prepare the sales call talk track
3. Do your research
4. Develop and practice your pitch
5. Consider practical issues

Read more in “Preparing for a sales call“.

Why do I need a pitch deck?

A pitch deck is one of your most important tools and the first thing you will use when making a sales pitch.  Create a presentation that catches the attention of the audience.  It should send a clear message: you are solving a problem, make sure to explain that solution. Talk about how your business benefits the customer and meets their needs.  Each pitch deck is different but still requires 10 essential slides; have a look at the lecture presentation to find out what they are.  Read more in “Elements of a pitch deck“.

Once you have solved the problem that your customer has, you are ready to launch.

One final thought from Krista to get you on your way: Remember to face rejection and KEEP SMILING!

• Lecture Video: Sales with Krista Jones
• Entrepreneurship 101: Sales – event summary
• Sales articles, workbooks and case studies
• Slide presentation: Sales and business development – By Krista Jones

Reposted from MaRS

Marielle works as part of the education team at MaRS. She helps entrepreneurs get access to business resources both online and in-person.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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Please don’t hire a sales professional…

By Mark Zimmerman

“How do we find a good sales person?” is a question I get asked almost every day here at MaRS. The assumption being that hiring someone experienced, someone with lots of contacts in the segment, who thrives on carrying a quota, who isn’t terrified but rather excited to make a cold call or a pitch, someone in short whose job is revenue will get the company to break-even more quickly. In many cases, this assumption is wrong.

I’ve led sales in two start-up situations. In the first, we quickly found a value proposition that resonated with our chosen customers and a sales process that worked.  It was a fast-growing market and success was about scaling the team and managing activity so that we’d capture an “unfair” share of that growth.  We did.

In the second, we had a great product and some early-adopter customers but we hadn’t found a value proposition that worked for the market segment as a whole. I hired great experienced sales people from the sector; armed them with good tools and sent them out to grow the business. They failed. I failed. All the professional sales methodologies and sales management skills I’d learned since the first time were useless or even counterproductive.  They were skills for optimizing a working process in a company that had found what Marc Andreessen calls “product/market fit“. We hadn’t.  We were trying to execute and refine a process for selling a value proposition that the market didn’t want.

Eventually, we learned. The hard way.

What we learned were the broad strokes of what has been distilled, developed and clarified by Steven Blank, a serial entrepreneur and now professor at Stanford and Haas/Berkley, in his “Customer Development” process. The process has four steps:

1. Customer Discovery, where a start-up tests its hypothesis about a customer’s problem and their proposed solution.
2. Customer Validation, where a start-up develops, tests and iterates until it finds a repeatable and scalable sales process.
3. Customer Creation, where a company’s focus turns from finding demand to creating it in order to scale revenue.
4. Company Building, where a company transitions from an organization designed for learning and flexibility into a one engineered for execution.

If your start-up has demonstrated product/market fit and has a tested and repeatable sales model, by all means hire an experienced sales pro from an established organization in your target market. They are likely to be just what you need in steps three and four.

But if, like many start-ups, you are still searching for that repeatable sales model then you need someone to focus on steps one and two. Often this will be your job as the founder/CEO. Get out of your office and meet with potential customers: pitch, listen, learn, repeat.  If you aren’t comfortable absolutely can’t do this you need to look for someone who is excited about finding a winning model rather than executing it.  It’s a tough search,  that will often take you out of the ranks of sales professionals into adjacent spaces like business development, product marketing or product management, but it will greatly increase your chances of success.

Mark advises entrepreneurs in the information technology, communications and entertainment practice at MaRS. He specializes in B2B enterprise software, SaaS business models as well as security and privacy.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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Sales: Targeting the real decision-maker

By David Pasieka

I’ve read a lot about the selling process and how to target the person who makes the final purchasing decision. The problem is that the approach may be all wrong. Instead of concentrating on a person, we should be focusing on a thing –  specifically, the brain.

I recently attended a CEO Global Network meeting — an organization providing peer-to-peer mentoring for CEOs. The guest speaker co-authored the book, Neuromarketing (Morin & Renvoise). Christophe Morin says at least 80% of business self-help books purchased or given out at conferences remain unopened on the shelf. After a couple of hours with the author, I was convinced that this book would not be destined for the unopened faith. Let me provide some of highlights to hook your interest and demonstrate how you will need to change your sales approach to increase the probability of success.

The human brain is composed of three distinct components which evolve as we grow. The first or reptilian brain is present at birth and ultimately becomes the trigger in our decision-making process. The middle part of our brain develops and processes our emotions, while the outer part develops our ability to think. Research has shown that the reptilian brain will make the final decision by considering emotional and rational input from the other two components.

Morin and Renvoise’s research suggest that the brain reacts to six key stimuli. By mastering and re-engineering your selling proposal you will increase your probability of success. These stimuli include:

1. It’s all about “me” – The brain is motivated by anything that pertains to itself. Presentations that spend too much time talking about your company and its products without focusing on what it will mean for a prospect will be wasted effort.
2. Clear comparison – The brain is sensitive to comparisons that provide clear differentiation. By making a product claim that is a sharp contrast to the competitive product you have sped up the decision-making process.
3. Concrete – The brain is stimulated by facts presented in a clear manner. The more thinking that has to go into the process, the slower the decision that gets made.
4. Strong open/Powerful middle/Strong close – The brain is a very efficient machine with an embedded energy management system. It will look for ways of conserving energy by forgetting about details in the middle. In sales mode, MRI studies suggest that you need to have a strong opening, a simple but powerful middle and a strong close. The brain’s energy management system means you only have 10 minutes for the complete process. Your middle section should be constrained to three key messages.
5. Stunning visuals – The reptilian brain is directly connected to the optic nerve. This means that of all your senses, sight has the most immediate and lasting impact on a decision making process. We’ve written in previous blogs about the importance of this item and how it relates to crisp and uncluttered PowerPoint charts (see here and here).
6. Hook me emotionally – The brain recognizes over 16,ooo emotions which lead to chemical stimulations. It’s no surprise that the most memorable commercials are those that somehow play to our emotions including joy, trust, sadness, fear and anger.

These concepts are essentially the guiding principles of messaging. The neat part here is that we can tie the science of the brain to understand why it works the way it does.

Back to that ugly statistic on business books on the shelf: I can assure you that this is one of my books that is already highlighted, dog-eared and in active use.

PHOTO:  DelosJ

David Pasieka is the Entrepreneur-in-Residence at the RIC Centre. Learn more here. Visit Our Contributors page for more information about David. Read his blog at www.cedarvue.blogspot.com

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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What’s in it for me?

By Stephen Rhodes

When you approach a potential client about doing business are you ready to answer WIIFM? “What’s in it For Me” is the closer. Without it, you don’t have much of a pitch.

Depending on your business, what’s in it for me can take many forms. It’s cheaper, faster, smarter, more effective, includes a great gift, fits your lifestyle, exclusive, provides hours of pleasure, saves time, saves money, is more convenient, new and improved, keeps on ticking… I think you get the idea…it’s the why I should buy your product of service.

So, why do so many people have trouble with such a simple concept?

Think of it as your elevator speech.

It must be BRIEF -50 words or less and in plain English and not some marketing blather that sounds good but says nothing. Tell me what you do and WHY I need your product or service? Be clear, specific and honest. There must be a compelling reason for people to switch from your competitor(s) so the why I should choose you is the most important question to answer.

BE POSITIVE – Fear was once a great motivator. Who wants ring around the collar? Today it’s too easy for people to find solutions on the Internet. Tell people how you’re going to help them and not what might happen if they ignore your sage advice.

It’s a simple question. What’s in it for me?

Reposted from The Marketing Pad

Stephen Rhodes is President of The Marketing PAD, a full-service strategic communications and marketing company. Read Blogpad or visit  The Marketing Pad online.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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No Thank You, only means not right now!

By Michael Hepworth

Life in the world of building a new business is a passing parade. At anytime there are collections of potential customers or possible financiers:

• a small % of potential ready to do business with you now
• a bigger % who are interested in what you are offering but are not yet committed to any action
• an even bigger group who has potential, but is not yet interested.

Many of these have the potential to become interested if they were educated about how your product or service can help solve critical problems.

Most of us, quite rightly, try to focus our attention on finding the few people who are ready to buy into our dreams.  In the process, we meet countless people who fall into the other categories.  Instead of tracking these and nurturing our relationships with them, we often put these names into a database and then ignore them or worse still, discard them.

It’s important to remember that each person not yet aligned with our offering represents someone who is potentially interested in helping finance our business or in buying our products or services at some point in the future. This group can represent one of the most valuable and often the most under leveraged asset in your business.  They can be your future gold mine!

Think of your market like a rose garden.  Some rose trees bloom readily and easily with little care – they bloom early in the season, and usually will bloom often.  When you know they offer repeated blooming, you cut those first and often.  It’s natural to give them lots of attention and ignore the others.

What about the other bushes that require careful nurturing, pruning, watering, spraying and fertilizing?  These trees will nearly all produce flowers at some point in the season, so with proper care, they can provide an ongoing source of roses for a long time.  Some trees may not even bloom for a season, no matter what you do; however, they will flourish next year.

It is the same with finance prospects or for that matter prospective clients, but what most firms do, is pick the easy blooming flowers, and ignore the others.  We pick the easy ones and then leave for greener pastures.

Very few businesses focus any attention on the prospects that aren’t ready to buy now.

Most entrepreneurs have a sense that some of the people they meet along the way, will buy sometime.  They set up either a tickler file or a reminder in their contact manager. Every now and again they phone the prospect to find out if they are ready. This kind of call is not only ineffective most of the time; it is downright annoying, as it seldom adds any value. Who among us has time for the regular, “Are you ready yet call”? Few of us use the opportunity to nurture the prospect with useful information. Instead, they simply become commercial pests.

Savvy entrepreneurs know that eventually almost every prospect will bloom and decide to buy. They need education, encouragement, advice and guidance. If you do a good job of this you can pick every one instead of a few.

Use smart marketing to continue to nurture these customers, and to guard against them going to the competition.

• Offer them special educational reports on your specialty
• Provide regular updates on your progress
• Invite them to relevant seminars and workshops
• Give them free audio CDs of your presentations.

When these prospects bloom, they will let you know, because they will see you as the logical choice and that is when you can  close the sale.

It is much cheaper and more effective to focus on qualified prospects, than to continuously forage for new leads

Michael Hepworth is a serial entrepreneur, with a history of successful start-ups and exits. His newest venture is Alternative Fuels Corporation. www.alternativefuelscorp.com

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