Selling More May Have Nothing to Do with Sales!

March 11, 2011

I continue to be struck that many people believe that sales is the job of sales while I believe that everyone’s job is sales. You absolutely need to get your sales team and methodology together and get your sales factory built (and most companies do have the opportunity for dramatic improvements in their sales departments), but everyone else in the organization has a major opportunity to increase sales by improving your product’s attractiveness to your target customers!

This post tells you how you can accomplish this by focusing on creating competitive advantage. Companies with true competitive advantage win more customers and have higher and better exit events.  This is true across all industries, geographies, and company sizes.

I ask three questions to companies regularly:
1. Who is your target customer?
2. What is your competitive advantage?
3. How is your company set up to further develop and exploit your competitive advantage?

Interestingly, 98% of emerging growth companies don’t answer these simple questions well!

A typical exchange goes something like this (after some introductory conversation):

Me: “So, what are the characteristics of your best target customer?”

CEO: “We can sell to any marketer in any sized company.”

Me: “That sounds too broad for a company your size. Who is your best customer?”

CEO: “We have customers of all shapes and sizes.”

Me: “There isn’t a particular customer that is best?”

CEO: “Our results are great from all the segments, but we spend most of our time with Financial Services, Retailers, and Brands.”

Me: “From my perspective, if you could figure out who your best target segment is, then you could put more resources against that segment and grow faster.”

CEO: “But that would reduce the size of our market.”

Me: “It doesn’t reduce the size of your market, but rather allows you to grow faster into the market. Putting more proactive resource against a particular segment doesn’t preclude you from accepting customers from other segments; it just helps you to target your efforts so you can win the better segments more easily.”

CEO: Gives me a look like he is thinking it through.

Me: “Let me ask you another question. What is unique about your product?”

CEO: “Our product is simpler and has a lower price point than our competitors.”

Me: “Is that important to your target customers?”

CEO: “Absolutely. Our customers love it and they tell us how great our product is all the time.”

Me: “How do you know that you are making your product simpler with each release?”

CEO: “We get feedback from the salespeople.”

Me: “That is a good feedback point, but are you studying usage patterns of your product, executing customer usability research, or performing other activities to better understand your products’ simplicity more directly from the target customers’ perspective?”

CEO: “Not at this point, but those are good ideas.”

Me: “Let me ask you a different question. If you are targeting simplicity as your competitive advantage, how have you organized your company to create the simplest product possible?”

CEO: “What do you mean by that?”

Me: “Well, if I were really trying to develop simplicity as a competitive advantage, I would set up Product Management with a team of people who were working hard to drive more simplicity in my product. They would be doing things like customer research, user experience design, user interface design, and also working to make it really easy to try, test, and buy the product. I would also be working hard to figure out the marketing messages that resonate with the target customers surrounding our competitive advantage. Finally, I would have some objective measures to help the team see how well they are doing. Have you set up something like that?”

CEO: “Our development group handles those things. I could put you in touch with them.”

With that, this part of the conversation ends.

This is a pretty typical conversation. My conclusion from this example is that the CEO couldn’t really explain the nuances of different customers and, while he had an idea of his competitive advantage being simplicity, the company had not yet set up to truly drive simplicity as a competitive advantage. Instead, the idea of simplicity was more of a marketing message than it was a true focal point that the company was putting a real effort against improving.

Answering the three questions well means:
1. You really understand the buying characteristics and user needs of each of your customer segments and the differences between the segments.
2. You have a clear understanding of how you want to make your whole product and/or go-to-market strategy different from what your competitors are doing AND it is clear why those differences are important to your target customers, and
3. You have committed unique resources and organized your company to create and maintain those differences.

You can have a real impact on helping your company build its competitive advantage. It could be as simple as repeating the three questions at each meeting (the questions work for any company with any competitive advantage goals). Even better, you could start taking on some initiatives that improve your answers to the questions. If you can get your company moving in the right direction with each iteration, you could have a major impact on creating competitive advantage. If you do this, you will have a major impact on your sales!

Can you answer the three questions for your company? Can you answer the 3 questions well?

Founder & Partner

As the founder of OpenView, Scott focuses on distinctive business models and products that uniquely address a meaningful market pain point. This includes a broad interest in application and infrastructure companies, and businesses that are addressing the next generation of technology, including SaaS, cloud computing, mobile platforms, storage, networking, IT tools, and development tools.