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What happens when your product comes down from your ivory tower? 17 April, 2015

Posted by varoom in Management, Strategy.
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I see quite a few entrepreneurs who feel firstly they know best what a customer needs and secondly there is no need to talk to customers before they develop their product. They disappear up into their ivory tower and develop the product in isolation.

Now; who’s to say they are wrong? Maybe they do know best what the market needs. Far be it that my crystal ball is any better than the next persons. However, what if they are wrong and the product being developed is not quite what the customer needs? They could risk all that investment in time and product development and just have to start again.

What’s the harm in talking to a few customers? I believe you always learn something from interaction with real customers, this could be to your advantage, you may discover a killer feature that changes completely your business prospects. You will, perhaps more importantly, learn what you don’t need to do and save yourself some time and money.

Investors will nearly always want to see customer engagement before they invest. So if you need to raise funding that interaction with customers and the development of a product which has early demand from that market will enhance your prospects. Also you will demonstrate that you have invested R&D resources wisely on features that have real customer demand.

The lean startup business model together with agile development techniques can reinforce the need to become closer with your early customers and use them to test out your product features as you proceed with development.

So don’t be afraid of engaging with customers, the right ones will understand the concept of a product in development, they will give you valuable feedback, they will ensure you build the right product and help you avoid wasting time and money on features you don’t need.

Grev

Hiring a sales guy is like buying a gun 7 March, 2011

Posted by varoom in Management, Selling.
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Don’t worry it’s just an analogy…If you were to buy a gun, for arguments sake, and tried to do some target shooting but failed to hit anything you aimed at. What do you think the gun shop would say if you took the gun back claiming it didn’t work, because it kept missing the target?

In my analogy, when a new company hires their first salesperson I often hear complaints about the performance of said salesperson very early on in the relationship. I believe that hiring a salesperson is just like buying a gun. You need to select the right weapon that is suited to the target you plan to aim at and you must aim (direct) the weapon at the target accurately enough to stand a good chance of hitting it first time. You also must think about selecting the best ammunition in order to create the desired impact on the target.

A failing relationship with a salesperson is as much to do with the company engaging that salesperson, where they are directed and what ammunition they are armed with.

In this context aiming your salesperson is all about choosing the right customers/market sectors where your product has the best fit, arming them with the right tools & training in order to have the best chance of success in hitting the target the company wants to aim at.

The lesson to be aware of is this: If your salesperson is failing in their job, look at what you are doing first, improve your aim, supply more useful ammunition and stand back…. This is pretty much what the advice from the gun shop would be too.

Grev

Be careful not to telegraph your “tell” 18 June, 2010

Posted by varoom in Management, Selling.
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In a negotiation you want the process to be a fair exchange of terms on both sides. Newcomers to the negotiating game often give too much away early on and have a fight to get back to a reasonable position later in the relationship. It’s often impossible to raise a price back to a preferred level once it has been sacrificed in a negotiation.
Just like in poker everyone has a “tell”, some kind of reaction, response or behaviour when in a tight negotiation spot. It’s in your interest not to communicate (telegraph) you’re negotiating pattern in negotiations with a potential or existing customer. One particularly bad pattern is if you always reduce your price when demanded, or accept a price reduction every contract or accept claims of competitive price pressures that you need to keep ahead of.
The best pattern to telegraph is one of inconsistency, on some occasions resist pressures to concede, on others exchange one concession for another given by the other party, on other occasions agree to concessions out right. But always remember when giving a concession make sure you always get something in return, increased volume, earlier orders, broader product range purchases, publicity, even better market information is valuable to you but maybe of little cost to the other party. Also in reverse sometimes a fair exchange from you is a reasonable explanation of why you can’t give a concession. In many cases the other party is ignorant of the challenges of making your product, maybe they don’t fully appreciate the true value, to them, of what you are delivering. In some negotiations the target of shaving a few more percentage points off the price becomes the challenge when in the scheme of things it make very little difference when the customers business potential is taken into account.
Don’t be afraid to negotiate, play your game like a good poker player, avoid telegraphing your “tell” and make sure to get something in return for every concession you make.

Grev