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What’s your Sales Story?

Whenever faced by dilemma over any issue pertaining to sales and marketing, I recall a famous quote by Ben Feldman, who is considered one of the best salespeople in world history.

Don’t sell life insurance. Sell what life insurance can do.

Just by following this one mantra, Ben was able to insurance policies more than worth USD 1.8 billion in his life!

It would be unfair if I don’t mention Steve jobs here. Have you ever seen him selling Apple products? No! He would always sell you the idea of ‘how apple products can change your lives’. Watch his keynotes at the launch of iPhone or iPod and you will understand what I am trying to say here. Sadly I don’t see the same approach being used by Indian startups and product companies. Many of us are still struck at ‘Buy our product, this is the best; this is different; this is cheaper; this is awesome…..’.

Human brain is inherently averse to sales. The moment we realize someone is try to sell something to us, we tend to lose interest in the pitch, become defensive and start finding reasons why we don’t need the particular product (or service). So rather than doing direct selling using plain facts and figures, if you narrate a story about your product and how it can help fulfill peoples’ dreams, chances are they’ll listen to you. Research has proven that majority of the decisions are driven by emotions and not reasons. We don’t realize that because our brain tries to find logical reasons to justify the already made decision.

So triggering those emotions should be a critical component of company’s overall Sales story. Ideally the sales story should be centered around the following,

  •          Making people more powerful/ efficient/ potent through your product
  •          Making people passionate about your company and yourself
  •         Ringing alarm bells in peoples’ minds of losing out on something if they don’t buy your product
  •         Generating mystique and awe among people for your company and yourself
  •         Being just enough rebellious and loud to make some noise and stand out
  •         Developing trust among people for your company and yourself (damn important)

 

Let me take an example. I went for a sales meeting for some stakeholders from a global networking giant. Here is what I presented the first time,

‘WE are Company X. WEhave been doing this for so many years. WE have worked with companies like … WE’ll help your business grow to next level (x%). WE’ll help to save y% costs. We’ll increase your efficiency by z%, so on and so forth’

I got a good response but not a mind blowing one. We were asked to present to some other stakeholders in the follow-up meeting. I decided to try out something different this time. Here is what I presented,

‘YOU are Company Y. YOU have been doing this for so many years. YOU are doing good with a% growth, b% cost savings, etc. YOU are projected to reach here. What if we help YOU reach there. YOUR competitors are already catching up. We can help YOU leapfrog. We have already helped many companies to do the same. YOUR company is very good, we can make YOUR it awesome’  

Boom!! Applauses all around!

Notice the ‘We’ centric approach compared to ‘You’ centric one. Research has proved that customer relations are more long-run and stronger in the latter approach. I have complemented ‘company’ with ‘yourself’ because your personal branding goes hand in hand with that of the company, as people don’t perceive you much different from your company. I can’t think of any aspect of life where you don’t have to sell anything. I believe aforementioned points are relevant in every sphere of life- job interviews, user acquisition, b-school interviews, advertising, online marketing, presentations, proposals, VC pitches, etc.

For the founders, it goes without saying that you should have questions related to positioning, value add to customers, target market segments, key differentiators, etc. clearly figured out before you start creating your sales story. Answers to these should be Crisp, Short, Tangible and Simple.

Happy Selling !!

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Product positioning and sales strategy must be approached the way an army fights a war

To position the product, you must first have clarity on the addressable market and its breakdown in terms of different industries or user communities (let’s call both of them as ‘verticals’ for simplicity). Then analyze which of them can benefit the most from your product, where your maximum contacts are, and which has the least competition.

You can accordingly initiate preliminary sales efforts with well-known contacts in verticals that appear to have the best potential. Initial sales in a start-up are opportunistic—you take the business that you get. Yet, over time, you can only gain by firming up your target client base and tailoring your product to them.

Product positioning and sales strategy must be approached the way an army fights a war. It may not be easily apparent which verticals to focus on. In similar situations, armies launch probing attacks to detect weak lines of defence, before deciding on the exact battle plan. Founders can test the market with different customers, who would help them to develop insight into which industries, user communities or geographies have the best potential.

Once weak links are identified, choose initial battles to be on your terms. In the 1971 war, the Indian army avoided enemy troops that were concentrated in cities in East Bengal. They quickly captured the countryside, surrounded the towns, until the enemy surrendered. Similarly, a start-up must spend its limited sales budget to target the right customers.

Positioning and sales are influenced by different factors, some of which are listed below:

Target Market

  • Your product may have the potential to solve similar set of problems for different verticals. However, limited finances will stop you from ad- dressing all of them. Focusing on one or two verticals can result in a more specific solution, thereby increasing total value delivered by the product. This improves the probability of converting opportunities to sales.
  • The best target segments are not necessarily the obvious ones. For example, a vertical may be large but should be ruled out if it has entrenched competitors, less appetite for IT products, remote location etc.
  • Conduct some research by talking to potential clients in various verti- cals, industry experts and reviewing market surveys.
  • Sometimes, you may simply stumble on the right vertical. Initial clients provide the momentum and knowledge base related to a particular industry segment.

Delivery Model  

  • Sales strategy depends on the kind of product: enterprise software for companies, consumer software, web downloads, hosted solution (SaaS) with subscription fee, or an ad-based ‘free’ web portal.
  • Your product may support more than one delivery model. Thus, vendors may target big companies with full-blown enterprise software, while providing a SaaS version for SMBs. Many companies offer a free downloadable ‘lite’ version of the product, which can be upgraded to a paid full version. A free website may charge a subscription fee for advanced capabilities or special content. 

Initial Support

  • Does your product work out of the box with almost no support? Or does it need some customization and training? Is the product serving an obvious need, or does it require substantial education before a client decides to buy the product? The answers will influence the sales model.  

Geography

  • Is your product specific to India or global in scope? Even if global, do you plan to sell in India first? Does your city and region have sufficient opportunities to sell the product?
  • Except with SaaS, targeting and supporting customers outside India can be very expensive. It is best to follow an ‘expanding universe’ model, where initial focus is in your immediate area, followed by proximate locations, and then a global market.

Product positioning is closely tied to licensing model and pricing. We will consider each one individually.

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6th iSPIRT Playbook RoundTable: Challenges in building a global software product company from India

In the continuing series of Round Tables product veterans Samir Palnitkar, ShopSocially and Jatin Parekh, AirTight Networks took the participants through a journey of discovery about why they want to go global and taking a critical look at the challenges they must overcome.

It takes a guy like Samir to lay the foundation for such a Round Table, having stoked the discussion with his experience and adding fuel by way of eliciting ideas and experiences of others. There’s no quick formula but the session did throw up some easy mantras to achieve those Global ambitions…

Some interesting takeaways from this session :

TEAM:

–       Hiring for overseas is always a challenge and you can’t be careful enough

–       Get a co-founder with a sufficiently high stake in the game, and one who is ready to adapt to the call of the hour.

–       If you know the person from earlier, nothing like it

–       Stay away from expensive consultants and retainers. Find someone who will take less cash (and therefore has had a prior successful exit / financially secure)

–       Write down the issues, objectives, compensation, way things are done, who does what, 5 year vision, etc. These discussions need to happen 

Experiences of those present:

–       One of the RT participant founders even camped in the US for 3 months to find the right guy, interviewing over 15 persons identified through various contacts. They evaluated trust, skill and cultural fit before deciding.

–       Most people do not want to be the lone member of startup in the US because all decision making would happen in India. One of them had a member already selling remotely so were thinking of moving that person to US.

–       If there are 3-4 co founders, there is enough mental bandwidth to get one person to US for 6 months to set things up.

–       Get partners to sell for you, they front end and sift thru the leads. May be encourage one of the partners to join you, as did one entrepreneur who had a good partner in E&Y front ending and finally robbed E&Y to get his co-founder !

–       In a nutshell, don’t compromise on this first hire. 

PREPARED TO TAKE THE FLIGHT ?

–       Start selling globally only if you can fund the sales cost for at least a year

–       It’s ok to do some services revenue to generate some cash. But this is also the biggest pitfall, if you end up doing too much customization that cripples you later. 

Key considerations:

–       You have to learn how to sell if you don’t already. Thumb rule is – if you can’t sell your product, nobody can.

–       You should have a sufficient funnel and regular flow of enquiry / conversion / sales and cash flows. Ok that’s a lot to ask but then that’s what it needs !

–       Prepare the Sales play book. A new person cannot invent the playbook to sell in US for you. 

PRODUCT MANAGEMENT

–       Do you want to keep Product Management close to the customer or close to the R&D team?

–       Typical challenges in this are the ability to be aligned. Clear internal communication is crucial in motivating the team for the higher purpose

–       Delivery teams are usually in India, however you need to deal with the challenges of motivating team from a distance and account for cultural differences

The practical Product Manager:

–       Understanding the higher purpose and communicating it again and again is very important. If engineers are in the same office as sales guys then its easy, motivation happens. But if teams are physically separated then you have to build the channel to keep that communication going.

–       Communicate back to sales what problems engineering is facing.

–       Product Manager must have a regular travel plan and must meet customers if working at a distance from the market. This is crucial to get the alignment early on.

–       The PM cannot be note taker, taking customer requirements and giving it back verbatim to engineering to build. He must understand, negotiate and make intelligent distinction between features and requirements.

–       Priorities should be clearly published in writing.

–       Engineers should have the freedom to think and push back on features, but within boundaries. That’s when they can understand the purpose vs just coding.

–       Engineers must have first hand communication with customers, go for customer meetings, handle support calls etc.

–       When hiring engineers, set the expectation upfront that you have to do everything, and even learn outside your core competence. A Startup cannot afford to have people rigid within their own area. 

MARKETING

–       The biggest conundrum is in expectation mismatch, US teams being very “look” orinted and India teams being “fact” oriented

–       Interpretation of specs is usually different for each team, and quality of collateral needs to be extremely high to appeal to a US audience

–       The simple approach is to keep everything that requires a “handshake”, in the US and to teach India teams to be perfectionists.

–       If you need to get copywriting, don’t even think of getting it done in India. The lingo, the flow has to be completely American – leave that to an American.

–       Use a professional UX design shop if you need to

–       Use professional agencies for PR, like PRWEB, etc. 

SALES

–       Necessarily should be close to the customer. If the product requires a handshake, then you definitely need a US team member.

–       At the very least you need someone to stay up at night and receive calls

–       Prospecting via Linkedin, using polls and doing cold calling from India are usually successful approaches 

Sales and Marketing in the US is a big discussion in itself. A lot was left to be discussed, perhaps deserving an entire session devoted to selling in the US market. Another day, another Round Table then. 

ProductNation is the Go-To destination for many a successful software product. There are several amongst us who have tasted success in the global market. Do share your experience right here.

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Lead, but consciously nurture talent

My wife forwarded me an article recently that Booz & Co. had written on India’s leadership challenge. You can read the full article here.

This confirmed something I have long suspected. While there are great leaders in the Indian business, there are very few great companies. Let me explain what I mean by that. In the business, we are in, i.e. IT, some companies have done very well financially, and yet, if you talk to employees at the very same companies, you will realize very quickly that folks aren’t happy. That they feel they are under-valued and under-utilized. That they have limited growth opportunities. That they are stuck in a rut. That has made for companies that can execute well, but cannot innovate.

That niggly attrition problem that so plagues the India IT business? Well, guess what, it doesn’t have anything to do with making an extra buck somewhere else. It has everything to do with having equally dreary workplaces that stifle growth. So if one has a choice to make a little more money doing the exact same mind-numbing work, well, that’s what one does. This is not just me talking. Check this out

I can empathize. I’ve been there too. 

So what’s the point of this post? After all this is supposed to be a blog about the software product business in India. 

The reason I write this is because we have an opportunity to create an eco-system of companies in India that are creative workplaces. Where individuals want to have fun and innovate. If we want world-class innovation out of India it has to start with the work culture. So to that end, I jotted down some thoughts on what we should be consciously thinking about.

Money is only a motivator in the short-term  – Many companies believe, IMO incorrectly, that giving people great compensation is more than enough. This thinking is especially prevalent in sales groups within companies. While you have to compensate your employees adequately and at wages that are competitive, money is really not a great motivator. And if this is the only carrot you have, there is nothing stopping your best employees from seeking greener (more carroty) pastures. 

MBAs are great managers(leaders), NOT – Many years back, just starting out in the workplace,  there was a clear hierarchy in new hires. There were the MBAs (preferably from IIMs) at the top of the heap, then there were the engineers (preferably from IITs) in the middle, and then were MCAs. The MBAs were fast tracked on to management roles whereas the rest of the people were expected to be the worker bees. That is a ridiculous way to build an organization. Many years later, the thinking persists and the results are evident. A degree does not make a great manager. Empathy and interpersonal skills, among other things, do. 

Doing a job well is not a predictor of management/leadership talent – I have seen this many times in my work life. In one particular instance, a person who was a fabulous individual contributor was an exceptionally bad team player. Well, he was elevated to a very senior position because of the fantastic work he had done as an individual contributor. I have lost touch with him so I don’t know how he fared. He is a very smart individual so I assume he figured things out but the company had done no favors to him or the company, by not grooming him for that role.

Just some thoughts on a topic I feel strongly about. I keep hearing of all the fabulous things that are happening in the Indian product eco-system and I am excited about that. But we must always be aware of the cultural baggage we come with. And the cultural baggage has a strong authoritarian component to it. Where commands are given and dissent is not tolerated. If we want to build a generation of leaders that can spawn multiple companies doing innovative work, this needs to change.

But all is not doom and gloom. Things are changing. One of my clients, Moonraft Innovation Labs, a UX design shop out of Bangalore has created a relaxed work environment to foster creativity. Titles are fluid, no assigned seating and an entire floor devoted to artsy endeavors. The quality of work they are putting out shows their approach is working. This is just one example. I am sure there are many more. The objective should be to drive the old command-and-control structure into extinction.

Agree. Disagree. Or have another viewpoint. Would love to hear your thoughts.

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SaaS Pricing – the role of customer value proposition

The trend of pure-play SaaS providers and on-premise software ISVs diversifying into SaaS is on the rise. SaaS revenue for global top 10 ISVs forms 40% of all software revenues. According to Gartner, the SaaS revenues will grow annually at 17.5% to form 24% of all software revenues in 2016. This would amount to USD 22.5 billion up from USD 14.5 billion in 2012. While SaaS makes a perfect business sense in the long term, in the short term, SaaS providers face unprofitable business for two or more years among other challenges in marketing and product management. SaaS has given birth to new ways of pricing like fixed-fee or usage based pricing, pay-as-you-go, freemium model and so on. Pricing is an important aspect of SaaS business.

I will be covering SaaS pricing through a series of blogs on topics like concept of value pricing, role of segmentation and tiers, pricing structure, metrics, managing pricing over product life cycle, competition and product positioning. I start with concepts of value and role of segmentation.

A Google search throws up ‘n’ number of SaaS pricing models. But success of any pricing model is always rooted in a sound value proposition of the offering. Cost plus pricing is common, seems financially prudent thing to do but is known to leave a lot of money on the table. Also remember, even when offered free the customers would not pick up your offering if they do not perceive value in it. The first step in pricing strategy is to ascertain value of your offering.

Demonstrate value of your offering

The economic and emotional values are the primary drivers of purchase decision. The economic value of your offering is has two components – price of the next best alternative and the value of what differentiates your offering from the next best. You have no control on the competitors’ price. Therefore differentiation is the way to go to provide better overall customer value and better price. Sometimes customers may not perceive the value. It is critical your marketing communication ensure what is important to customer, specially differentiated features and benefits come to the buyers’ notice. So develop your value proposition and communicate it clearly to the customers.

A simple equation for the value proposition is (Value = Benefits – Costs). For this, you must quantify the economic value of your products features together with the emotional and psychological value. One way to do this is to quantify impact of your offering on customers’ revenue, productivity, profitability and so on. Here is an example of computing economic value of a feature.

A midsize software product MNC in India was considering moving to Google Apps. Google Apps offer benefits to two entities in an organization – IT and end-user. The IT benefits include cost savings on licenses, IT infrastructure and operations and maintenance. The end user benefits include – 1) productivity gain due to improved email search, spam filtering, archiving and improved response times, 2) quicker issue resolution and decision making thru shared editing of documents and 3) improved response time to customers and partners. Let us see how we can calculate productivity gain from just one benefit, say, and faster email search. Assume –300 employees, 5 day workweek, 50 work weeks, average per hour employee cost of $10, average 1 hour email usage per day, and a 10% saving (estimate based on previous implementations). This translates into an annual productivity gain worth 300 x 1 x 5 x 50 x 0.1 x $10 = $75 K.  The total benefits (productivity gains + IT cost savings) for three years operations worked out at $81K, $111K and $123K. Total subscription costs in this period were $18,900 (300 x $63 per user) per year. There were initial costs for transitioning from legacy system, testing, pilot and training amounting to $5K.  The overall risk adjusted net present value of benefits (including several other benefits like archiving, SPAM filtering, threading, IM etc.) was $205K. The customer went ahead with the purchase.

Segment your customers

All customers do not have same needs, value perceptions and the willingness to pay. Targeting the whole population with one product and one price is not the way t best financial performance. It leads to leaving money on the table for some customers who are willing to pay higher and losing out another set of customers who can’t afford the price. Thankfully, the customers can be sub grouped or segmented based on certain similarities. Value based segmentation helps create pricing commensurate with the perceived value by those customer segments.

Segmentation requires creativity in addition to analysis. It must reflect your marketing strategy. For example, Zoho, Google Apps and Microsoft Office 365, compete in online document management area (word processor, spread sheet, presentations, email).  However, Zoho Docs views the market in three segments represented by personal, standard and premium licenses priced at $0, $3 and $5 per month per user. Office 365 has more complex view of the same market. It segments it into seven segments, namely small, midsize and enterprise business, education, government, professional and home with fourteen different licenses ($0 to $20 per month per user)! In contrast, Google Apps has just one offering at $5 per month per user. So, why does Microsoft has seven segments and fourteen price points? A closer study would reveal that the breadth and depth of features / functionality offered by Office 365 far outstrips Zoho docs and Google apps. It allows creation of diverse bundles of features and pitch them to different segments at price points that meet respective value perceptions. By doing this Microsoft is able to capture the students segments (low paying capacity) while maintaining premium pricing for the enterprise. Microsoft would lose both lot of money and a large chunk of market if they decided on just one segment with one price. Interestingly, it is possible to create segmentation and variable pricing without bundling different sets of features i.e., on an identical offering. For example, railways transports grains at much cheaper rates compared to manufactured consumer goods in the same wagon. There is very little difference in the inputs that go into transporting the two items. I have yet to see this in software or SaaS.

One more point in favour of segmentation is as follows. In a high fixed cost industry like software and SaaS, it is a good strategy to capture the large volume of customers in the long tail with a price that is just equal to the offering’s variable cost. This is good for revenue. Generally, more segments the better. The factors that limit number of segments are complexity and sales administration cost, smaller differentiation between the offering for adjacent segments and customer propensity to select the lower priced segment when differentiation is small.

I will close this blog with a quiz. Given below is the old pricing page of Serverdensity (http://www.serverdensity.com). Serverdensity is a provider of cloud based server monitoring. They have tiered pricing based on number of servers that a customer has. What is good, bad and ugly about this pricing?

Please look for the next blog on SaaS pricing metrics.

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Stairway to Success – Nurturing your leads online

It’s not all about leads. The sales process in the B2B landscape has embraced a significant change. A purchase typically involves multiple decision makers, multiple teams and multiple stages. Creating awareness and interest about your products is just the first step of a long process. The bulk of your prospects, while having a fair idea of what their objectives are, are unaware of what your company exactly offers. Only 27% of B2B leads are sales-ready when first generated, according to MarketingSherpa. The remaining 73% constitutes a glaring opportunity and a stairway to success for sales growth. There is a high risk of the leads generated being lost, ignored or scooped up by competitors. It is thus essential for marketers to educate prospects and move them ahead in the sales funnel in order to increase the lead-conversion rate. And this is where lead nurturing comes into the picture.

B2B Lead Nurturing caters to prospective buyers during the early stages of the buying process by providing them with highly relevant educational content. It can help build preference for your products and brand in the minds of prospects long before they are actively engaged and reach the buying stage. It is about building relationships and trust to ensure success at a later stage.

Traditionally, marketers and sales-reps responded to prospect enquiries and their interest in a company’s services and products. But with the advent of online channels and their ever expanding reach, prospects are spending more time online obtaining, researching and analyzing information. On average, customers progress nearly 60% of the way through the purchase decision-making process before engaging a sales rep, according to the Marketing Leadership Council. The companies are hence, although indirectly, meeting their prospects at a much earlier stage than before. There is where companies have to leverage digital marketing and capture leads; with an aim to maximize the conversions.

After you first identify interest and generate leads from different channels and awareness efforts – Social Media, PR, Search Marketing, Content Marketing or Direct connection – the next step to build this buying interest through relevant and valuable education efforts. Online lead nurturing, as a process, can target specific audience sets at different stages of the sales process with a singular aim of moving them forward. Once you set up your lead nurturing process, your campaigns can cater to someone who opts in at any of the early stages. There are 5 key points to optimize your online lead nurturing process.

Audit your current state

Before putting in place a lead nurturing strategy, audit your existing campaigns, current lead generation rates, traffic levels and the corresponding conversion rates. Having a lot of website visitors is great, but they are of value if they do not lead to any conversions. It is also important to evaluate what information you gather as part of your lead generation process. By gaining data like an email address, website, social media handles, etc. you can continue to monitor and engage them.

Establish the target audience

Once you have established your lead generation strategy, you need to create a plan in order to reach the right people at the right stage. Typically, there are different types of prospects with different requirements and objectives, at different stages of the sales process. You have to validate your prospects and identify who needs nurturing. There are different ways in which you can segment your customers – seniority, company size, industry, role, etc. Once you have the types of prospects in the bag, segment them accordingly and map them to their objectives and requirements.

Offer valuable and relevant content

Your objective is not to hit your prospects with one sales pitch after the other. Instead, offer them valuable and relevant information (for example, webinars, eBooks, and whitepapers) that would educate them and drive them to make the buying decisions. There are various ways in which a company can share lead nurturing information. Content Marketing, Social Media, Email Marketing, Mobile, Blog, etc. can enable you to share information different kinds of information depending on the nature of the content. To reach out to specific audience, you can target the prospects specific to the particular sales stage and deliver highly focused content.                 

Set concise and measurable goals

Once you zero in on the target audience and offer them content, you have to define the consequent actions that you’d want them to take. For example, once you share a white paper with your prospects, you may want them to visit a specific page on your website. After a webinar, you may want them to download a business case, or an ROI calculator that allows them to further investigate your products. It is important to define what you qualify and quantify as a prospect moving ahead in the sales process.

Establish timelines for your campaigns

Your prospects do not want to see a barrage of emails about your products, no matter how relevant and valuable, flooding their inboxes or on their social media profiles. It is always a good idea to have a lead nurturing cycle in place. How long do you want your lead nurturing process to be? How often should you share the content you have decided on? It is important to create a lead nurturing calendar for each campaign and set the timelines.

Analyze and optimize

As you kick off your lead nurturing campaign, you have to monitor its state with respect to the measurable objectives that were set in place before. The results can give you an understanding on what works and what doesn’t in terms of various parameters like prospect segmentation, timelines, types of content or even subject lines for the emails. Evaluate them against your set targets and optimize your campaigns.

Online lead nurturing, if done effectively, can work wonders for your sales process and improve the lead-to-customer conversion rates.

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Insights on Building Sustainable, High-Growth Product Company

Manav Garg’s career exemplifies the statement “where there is big risk, there is big reward”. Throwing up a lucrative, six-figure plus salary and bonus as a commodities trader to start a software company that would build a commodities trading product required guts. Manav took it in his stride and today has built a world-class company that competes globally with its commodities trading software. He’s also built a company – EKA Software – that is domain driven and highly customer centric. In this interview with ProductNation, Manav talks about the origins of his company and some key factors that went into building it. 

You began a career in trading commodities. So when and how did you foray into the software industry? 

Yes, I am not a techie. I used to trade commodities enjoying import and export for a firm in Mumbai. But during this time, I saw a need for software for commodity trading. So, I spent more almost 24 months meeting with customers as a trader, trying to understand how to fill the gap and how systems would be a boon to traders like me. Since I have no background in software, I researched for a year on the requirements of the commodity trading industry, how it works, how to install a system for a particular pain point.  I moved to Bangalore, and set up shop, hired people and started out, spending almost 50% of my time meeting and talking to people on the benefits they would get from the software. This was how I educated myself about software.

So you are saying that your entrepreneurial spirit was lit by your ability to identify an opportunity.  While there are opportunities everywhere, the main point is you  need to  have the guts to take a risk, and the research to back it to believe that  the opportunity can be translated into business success. 

Obviously, in my experience this is exactly what happened — careful research combined with my intuition that this opportunity will be a success.  Many times too much research is done with no action. I do not believe in market reports. I believe that research and  study done by yourself and through interaction with customers and feel of the market is what will make your product a success.   

How do you identify customers and ensure that they will give you the right picture while your product is being built?   

Since I was in touch with customers for 24 months before starting the business, it was easy to contact them.   It is important to know how to convey the right message to your customers, tell them about the kind of solutions you are proposing.  Moreover, if you are connected on LinkedIn through your professional contacts and friends, you can easily connect with customers. 

I don’t think it’s a big a challenge to identify customers. I think the biggest challenge is the right approach. I recall when I contacted people whom I have known for at least five years, be it in Hamburg or Amsterdam, we were able to relate because they felt that I understood their pain points and were confident that I would bring to the table valuable solutions.

So your next step was to build the team.  So how did you form the right team, especially the founding team? 

You must be passionate about your product because then you can speak with conviction about the advantages of your product. 

When I started, I used the personal contacts route. At that time, I did not know anybody in the IT sales or products fields.  All that I was confident about was that Bangalore is a good place to do business in the IT field.  I met people, worked with them for some time, and they helped me understand how the whole industry works. 

For product development, I also reached for professional assistance to some of the larger technology MNCs who had more experienced talent. Since I did not have a software background, I decided to concentrate on sales from inception. 

For any start-up I think it is very important to decide from an early stage as to what is the main driver in the business. If you are doing business applications then sales is key driver, if you are doing online sales then marketing will be the key driver and if you are making tech based products then technology is the key driver here. But if it is very important to identify the key driver that will then help decide the skill set of the team. 

Today, what would you say are the key things that differentiate EKA in the market? 

For many years, people have been trading in rice, sugar, wheat and metals. It is important to have a good supply chain to manage this trading.  And for this you need excellent software that simplifies the supply chain. This was the challenge as a trader I was trying to overcome.  We basically cover that need in EKA today.  

A lot of our competition, mainly in the US, is focused on crude oil, gas, trading industry. We were the first one to focus on the commodities industry and therefore had an edge in the market.  We carved a niche for ourselves. 

Please share with newer entrepreneurs the learning’s that you have had over last five years, especially  amidst the challenges you and other emerging companies in India face?

The biggest challenge is putting together the right sales team. The product might be good, but it is the taking of it to the market that will bear fruit.  You also need an efficient global online distribution model. Another serious issue is how to retain employees. How do you convince people that your product is here to stay for a long time and not just a couple of years.  Emerging companies need to convince employees that their products are not fly by night, but bring value to customers and, thereby, employees over a longer span of time.

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If you really have to enter the US market – some do’s and don’ts

A few weeks back I had written a post on entering the US market. It was very gratifying to see the response from so many of you on that post. So following the lead of that article, here is another one. 

In this post I talk about some of the basic things Indian companies can do to improve their probability of success in the US. If these come across as simplistic, its because they are not hard to do, but they are made hard by the cultural programming we come with. To paraphrase Dorothy from Wizard of Oz, companies have to be consciously willing to say – “Toto, we are not in Bangalore any more”. So, without further ado, here goes: 

Lesson #1

– Employee #1 has to be a jack of all trades

– The first person you hire will likely be required to set up office space, put in a phone system, hire new staff, set up payroll, healthcare, the list goes on. If you are thinking of hiring a sales top gun as your first employee, think again. You will need to have the basic HR infrastructure set up for your sales people to not have to worry about the basics. If you don’t do that, you will frustrate new hires and scare away high performers. 

Lesson #2

– 9AM EST does not mean 9AM – 10AM EST –

We Indians are hardworking, committed but we aren’t exactly known for punctuality. In the US, IST (Indian Stretchable Time) jokes abound. All too often, this translates into missed appointments with customers and prospects. Time is valuable. If somebody has given you an hour, respect that.  While showing up on time is important, ending on time is important as well.  If in doubt, ask. Nobody is going to mind if you ask for permission to go over your allotted time. 

Lesson #3

– Don’t talk over people. Its rude.

– Another very Indian trait is our love for intellectual discussion. Coming from a country of over a billion, we are used to shouting over each other to get our point across. Unfortunately it doesn’t work in other parts of the world. All too often we get carried away and talk too much for too long. Other times, we will interrupt a speaker to inject a point or many times simply to agree. I learned this lesson the hard way many years back, when a customer essentially asked me to shut up and listen (they did buy from me).

A much more culturally acceptable norm is to not interrupt a speaker. Let them finish, ask if they are done and then make your point. When making your point, use short sentences and stop often and ask for feedback. It is not natural behavior for us Indians but we need to be conscious of it. 

Lesson #4

–  Learn to say no

– We work hard and we love to please. Sometimes it translates into not being able to set boundaries. In the product or the services business, you have to set boundaries if you want to be profitable. If something can’t be done or will cost more, flag it. Customers expect that. We can’t please everyone but if you don’t set boundaries, you will please no one.

Lesson #5

– Over-communicate

– You have a client. The project has begun and the India-based team is working hard. The India team is telling you everything is on track but the customer keeps sending you emails on how she is not happy with the project. Sounds familiar?

In my experience, this happens most often because the Indian team does not communicate enough with the client. The already jittery client who has bet on an unknown quantity gets even more rattled by not getting any regular updates from India. Make a conscious effort to communicate every day. It could be just an email update summarizing what was achieved that day but it goes a long way in giving peace of mind to the client. 

Lesson #6

– Use your network for initial hires, if using recruiting companies, choose carefully

– Your first few hires are critical. They are best picked through people you know and trust. So, first look to your network. If you do have to go and hire an agency, be picky. Indian recruiters, and I am sure there are some good ones, come with the same set of problems as the rest of us from India. My sample size is small but in my experience (and the experience of many of my associates), they aren’t punctual and don’t call on time and their follow-up is terrible. Rather than getting prospects excited about your company, they end up pissing them off. So, do your due diligence and talk to current clients of the recruiting company you are thinking of employing. It is worth spending time thinking through your hiring strategy. Humans make the company. Don’t forget that. 

Every one of us is shaped by our experiences. My observations are shaped by mine. For what it is worth, my viewpoint has evolved on four continents over a 24 year period. Like everything else though, it changes through new interactions and experiences. These are my thoughts today. Tomorrow might be a different story.

Agree. Disagree. Or have another viewpoint. Would love to hear your thoughts.

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Why will Someone Pay to Buy Your Product?

In this blog post, we discuss ways and means to reach out to prospective clients, position the product, license and price it. However, the question that founders must ask and answer convincingly to themselves is the one posed above. When doing this, they must think like a buyer and question every assumption about the product’s value.

There are actually three parts to the question:

    • Who is that ‘someone’ who may be interested in your product?
    • What is in it for them that they will be willing to pay?
    • How much will they pay?

 

Once this is clear at least at a high level, everything else will begin to fall into place. The answers will become more precise as the business grows, and they may also change with competition and shifting circumstances. That is why you must return to this basic query frequently.

Spider’s Web of Contacts

In early stages, founders do all the selling. They must talk to their target customer base early, with initial intent being to validate the product concept. Reach out through your contacts (past employers, family and friends) to those who can provide useful inputs. They in turn can introduce you to others. Set up meetings with thought leaders, but make sure you have a proper meeting agenda. Attend related conferences and industry meets, which present great opportunities to strike up discussions with people in the same fi eld, ranging from CEOs to sales or technical staff. You get to meet many of them in one go. At these forums, even senior executives have time to talk.

One has to learn how to get introduced to people and make an impact. Anand Deshpande, CEO of Persistent Systems, describes his approach, “Since I travel a lot, I meet many people at airports and on flights. I usually try to initiate some kind of a dialogue, exchange cards and have a short conversation. Airport encounters are not conducive to making fancy power-point presentations, so the positive impression has to be generated through something you said or your personality. The conversation has to be two way, and the person should gain something from you. It could be some information, useful tips, advice or an interesting observation.”

Anand also emphasizes the important of generating interest and then building trust. He notes that, “The biggest challenge for an entrepreneur is in getting people to meet you. That can happen through a reference from a mutual contact or your credentials (the academic and software community is closely knit).

People are more approachable at events like technical conferences because they see you as a colleague. They are also more receptive if you have a really compelling product or service to offer. People give work only when they trust you and if the timing is right. Once you get clients, you must take care not to let them down. Trust eventually goes beyond individuals and becomes a brand for the service or product.”

Take every opportunity to build a ‘web of contacts’. The web is woven from the inside out, expanding as you meet more people. Some of them may become future clients, advisors, partners or maybe even investors. Once you have a satisfied customer, get them to recommend at least two other industry contacts. Since your ‘n’ contacts can potentially refer you to ‘n’ more, this web can grow exponentially (square of n) over time if it is managed well.

Some entrepreneurs are very good at networking and take every opportunity to get introduced to people. They follow up on meetings by sending a discussion summary, or just a thank you note. Key contacts get regular emails with significant updates, like a new website, press coverage, or major client win. This communication should not be too frequent to a point where it becomes a nuisance. Surprisingly, there are many founders who don’t keep time commitments, and are poor at responding to e-mails or maintaining contact. Some respond selectively, only to those whom they think will be of value to them.

It is important to be gracious in business. Someone’s ability to help is often a matter of timing. It may be weeks, months or even years before something materializes from a discussion that you had. If you are in regular touch, your time will come.

A venture is said to be in stealth mode while the product is being conceptualized or developed. In those early days, you should be careful to avoid divulging  information to anyone who can become a potential competitor. If you plan to get into detailed implementation and technical discussions with anyone other than investors and prospects, don’t hesitate to ask them to sign a Non-Disclosure Agreement (NDA).

Write down and then practice an ‘elevator pitch’ about your product and company. ‘Elevator pitch’ is a US reference to being able to communicate your product concept crisply to a prospect in the same elevator, in the short time between fl oors. There will be many opportunities, where you will have just those few minutes. So, learn how to distil your product objectives and value in a few sentences.

Anchor Customers

The first few customers are hard to get. There is a temptation to sign up anyone willing to pay. However, you must take a long term view and instead focus on signing the right clients. Approach users and companies that best represent your target audience—let’s refer to them as ‘anchor customers’. An ideal anchor is someone whose name will provide confi dence to future prospects, and whose acceptance of your product establishes your technology leadership.

Anchors may sign up because they are risk-takers, or they have a pressing business need, which your solution can address. Remember that they are investing in you by taking the risk of signing on for an untested product from an unknown company. They will spend time and resources on deploying your software and surviving the inevitable teething problems.

You can acknowledge their support by being fl exible on the pricing. At that point, you probably wouldn’t have decided on the price. For instance, offer to waive license fee for the fi rst 6 months. Say that you will quote them the list price that you will charge other customers, and will let the anchor decide their price.

Anchors as Investors

If you get lucky, the anchor may be convinced that your product can deliver real value, and will support you all the way. They may even pay your full fees, but ask for extensive customization. Some anchors may even want to invest in your company. This can happen with large companies who see the potential for significant financial benefi ts from your product, either through internal deployment, or because it fits into their strategic roadmap in some way.

Both are good situations to be in, but you must assess the following:

  • Weigh the benefit of customization for an early client against the potential delay to the main product. 
  • Product and source code ownership must be retained unambiguously by your company. 
  • Any angel investment proposal should be evaluated on its merits. Do not trade equity just because you are getting a major customer. Their investment may limit your market by turning off the anchor’s competitors.
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Selling to SMEs and Startups

Arrogance is a flaw, and for a marketer or salesperson, this assumes greater significance. Unfortunately, marketers tend to fall prey to the glamour of signing on a big name client, while giving the cold shoulder to a category that shows, in my opinion, greater promise of developing a long-term relationship. Yes, SMEs and start-ups might not have the budget or the inclination to provide you with that juicy deal that’ll set you up for a bonus come end of the year, but handled carefully, can provide great benefits in the long run.

Let’s look at a few of the reasons why SMEs and start-ups deserve the same attention you’d give to a big corporation:

– Your product/service might be just one of the many used by a big corporation. At the same time, an SME or startup might build a large section of their business around your product – giving you a much higher sales potential in the long run. And if the start-up flourishes, you win – big time.

– Bigger businesses, with their deeper wallets, tend to squeeze out every last bit they can while agreeing to a deal. Sure, they might give you the lock-in to a long-term or high-value deal, but it’s not likely to be on your terms. On the other hand, dealing with a startup puts you in the driver’s seat.

– Customer feedback is a vital part of success and with smaller organizations, you get to closely develop your product – in partnership – as the market evolves. A big business, however, can be like a 500-lb gorilla – you do as asked.

Read the complete post here.

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So you want to enter the US market

As many of you know, Avinash Raghava is a persuasive individual. So when he approached me first to write for Product Nation, after some hemming and hawing, I agreed. On a recent call, he told me that nice though my writings have been so far, he was hoping I could help our readers with specific issues related to entering the US market.  He is absolutely right and I will start looking to him for guidance on what topics might be of interest to our readers. One of the first things we agreed, I’d write about is how companies should think about entering the US market. So here goes. 

I have been associated with the Indian IT business since 1989 and so I have seen the peaks and the troughs over the years. The IT services business and its offshoots into KPO and BPO have thrived over the years. And even now, if you are an entrepreneur and have a captive client, you can make a 20% return on your top line with some work and a tailwind. It is the product or IP related business that is a different animal.

I was fortunate enough to have the opportunity to understand the product business during my rather long stint with i-flex (now Oracle Financial Services). I had patient bosses, excellent coaches and the opportunity to understand three very different geographies – North America, Asia Pacific and Latin America. There are a few lessons I learned along the way and I am happy to share them with you. This is not an exhaustive post on the subject by any means, just some thoughts. Here is the first set of lessons learned:

Lesson #1 – Stay away if you can, it may not be worth it – Entering the US market (or any foreign market for that matter) is a big, messy, expensive proposition, if you think you will make money from day one, think again. It will take time and commitment to make it work. For example, in my previous life, it took investment from our company in a full blown sales and marketing organization, PR, analyst coverage, partners etc for close to over two years before we saw anything resembling success in the US. Latin America was a different story, the company did it half heartedly and did not invest in what was needed. Needless to say, we weren’t too successful in that geography. Entering a foreign market is not for the faint-hearted, it will take time and resources AND there is no guarantee of success.

Lesson #2 – Product business is not like the services business – Given the extensive experience that Indian companies have in the outsourcing world, it is no surprise that many startups are founded by folks with a services background. And since they have a services background they bring some of that mindset to the table. The challenge is that the product business is different in just about every way that matters to the services business. The approach to selling, the pitch, the implementation, support, partnerships, the list goes on and on. Unless the management is willing to change its outlook, this will cause you problems.

Lesson #3 – Awards are great, case studies are much better – I often come across promising companies in India that have been recognized for the excellent work they are doing. While awards are great, they are not enough to mitigate buyers’ concerns around vendor risk. Remember, you are an unknown quantity for the buyer, and as the old saying goes – “Nobody gets fired for buying from IBM”.  That is where case studies come in handy. If you have a multinational client, try and enter a foreign market through one of their subsidiaries. I know this works because I have used this strategy before. If you don’t, perhaps you can build case studies around a business reason that will resonate with similar companies in overseas markets.

Lesson #4 –  Get your story straight – One of the biggest challenges I see for Indian companies is around messaging. Most startups are founded by techies.  As a result, the messaging is very tech heavy.  I suspect the current crop of buyers is suffering from an overdose of “Cloud”, “Enablement”, “Web2.0”,  “Enterprise-class”, “Multi-Tier” and “Mobility”. The problem is that when everybody ends up sounding exactly alike, nobody stands out, and the message doesn’t address the problem they are trying to solve directly. A good message should be free of geek speak (to the extent possible) and to the point. Always remember that to the buyer you are relatively unknown, highly risky and you have a short time to grab the buyer’s attention. If you can’t even get them to understand what you do, well, good luck with closing the deal. This is hard and requires skill. There are people (like me) who can help you with this but it is critical that you do it.

Lesson #5 – Have a plan but be willing to change – When you are trying to get a foothold in new market, it is very tempting to get opportunistic. You leverage your contacts and get that first critical deal. That is how you get into a market, but what you do after that depends on whether you have thought about it or not. I encourage my clients to think about going after prospects that make sense in the larger scheme of things. In a significant departure from the services way of thinking, product companies can’t be everything to everyone. You have to think about what you are about and what business problem you are tackling. Based on that, you form a hypothesis and a plan. Then you test it out in the market. If it works, you are golden, if not, you tweak it. The point is, you can’t go after anything that moves: you don’t have the resources for it plus it WILL dilute your brand. Get opportunistic within your framework and you will already be ahead.

These are just some initial thoughts. Remember that like anything else in business, there are no guarantees. What you want to do is to increase the probability of success. Do companies succeed without the points I have listed above? Sometimes. Do companies fail even after they do everything above? Sure.

I can’t promise you success if you follow my advice but you’d be ill advised to ignore it. If you have thoughts, experiences or comments, please do share.

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“E” is for empathy

The last three business books I read were seemingly all different. “Wired to Care” by Dev Patnaik, “Nanovation” by Kevin and Jackie Freiberg and “Customer Centric Selling” by Michael Bosworth. The first was how humans are genetically designed to care for others, the second was the story behind how the Tata Nano was launched and the third was a book on more effective selling. But there was a common underlying theme to it all.

The theme was empathy. The Merriam Webster dictionary defines empathy as

“the action of understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of another of either the past or present without having the feelings, thoughts, and experience fully communicated in an objectively explicit manner; also : the capacity for this”

All the books in various ways said this and I am paraphrasing here – in order to to create a compelling offering you need to understand your customer’s pain and create a solution for it.

This should be self-evident but unfortunately that is not what we find in reality. What we find too often is a situation where a company creates a product without fully understanding how it will solve a customer’s problem. Even if they have a legitimate product solving legitimate problems, they are so caught up in the gee-whizziness of their product that they stop listening to their customers.

This is a big problem. A company that has a valid solution for a defined problem can last for a while. It might even get some early adopters but it will have a hard time sustaining its momentum and will run out of steam unless it starts a dialog with its customers and is empathetic to their needs. This is because your mainstream customers, the ones that will sustain you, are not early adopters and need to develop trust before they do business with you. One of the surest ways of building trust is to make sure the customer feels that you feel their pain and understand their unique situation.

This is not rocket science. It can be easily instituted in an organization. Designing a consultative sales process around understanding a customer’s needs first is a great start. But the culture of making sure that every touch point with the customer listens more than talks starts at the top.

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Lean way of sales

“Not meeting desired sales target?” is perhaps the most important question in any of senior management meetings.  But how do most companies react? Answer: “Re”setting the targets,“Re”structuring marketing campaigns and finally “Re”placing sales team (starting from executives ending up replacing sales director) and what will happen by doing several “Re’s” together…absolutely nothing. On the contrary such measures can damage team morale.

It is time to change, to replace traditional methodologies, to innovate and to spark. Time to analyse the mistakes.

Let’s rethink

What is a sale?  Act of selling a product or service in return for money or other compensation

Whats makes a sale?

  • Make the relevant presentation – Yes.. its necessary
  • Create connection between product/service and prospects. .. – Yes.. its necessary
  • Get to the point – Yes…its essential
  • Be animated … OK
  • Use showmanship… Ok ok
  • Use physical demonstration … Yes It’s necessary.
  • Believe on your product and Services… Aaahhhhhh….Its impossible….I have never seen it never utilized it ..how can i.. yes but I have capability to convenience customer though I haven’t  Utilized it …” True Salesmanship J”

And How much % this “making of a sale” will individually or contributed generate sales ?…Can’t Say. May be our sales guys are not proper… (In reality, sales guys are the most smartest guys in any of the organization).

It’s time for thinking…and changing. Let’s  make it the Lean Way…change “Re’s with Do’s

  • Do we are really addressing customer problems, completely?
  • Have we minimized cost of consumption (Price+ Time+Hassle)?
  • Do we provide exactly what customer wants?
  • Do we deliver value where customer wants?
  • Do we supply value where customer wants?

Remember, first sale to a customer could be important but it is the second sale that matters the most. Second sale will happen only if customer the is satisfied. Maximum value and minimized organizational waste is key to customer satisfaction. These are the only things that make a sale, make a customer buy, make it a competitive.

Guest Post Contributed by Meghshyam Gholap, Lean Sales Specialist

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Learnings from the 2nd #PNMeetup – Selling your product Gangnam Style

#PNMeetup on Selling your product Gangnam Style was the topic at the recently concluded Meetup(Podcast link). We had over 45-50 people across products and the services who came out to gain an insight into the Enigma of Gangnam Style Sales, with their eyes wide open and all ears the speakers Mr. Sanjay Agarwala MD of Eastern Software, Ketan Kapoor Co-Founder and CEO  of Mettl and Vishal Jain Chief Product Officer of RateGain gave an eagles eye clarity of how one could reach the summit of the Gangnam Style Sales.

Sanjay set the tone of the session by sharing his experiences of Eastern Software system which he started in 1991 and where he saw an opportunity in the product space in 1997 and ventured therein. The company dived headlong into ERP where there was a huge demand in the small and midcap segment. The larger players were serviced by prominent players. They clearer pegged themselves below these big players. The positioning was very clear to all parties concerned form the beginning. Because of their positing they got Pvt Equity Investments which enabled them to concentrate on Product development and Market Development which helped them scale to 100 customers in 2 years and 800 customers by 2001-2002.

They looked for newer markets outside and concentrated on newer markets. Africa was a huge virgin market, every body was skeptical but it was an immense market waiting to be tapped. They tweaked their sales model from a direct Sales(applicable in India) to partnering with the local companies(In Africa), they believe when you partner with anyone the relationship has to be a win-win. The partners should benefit first and then you. That builds trust which is further solidified when you match your own money with the amount the partner spent, sending clear signals to all. Since the partner operates in the market and is now highly motivated he is able to better understand the changing environment and this helps in better customer deliver.

 Sanjay’s  Gangnam style  for Eastern Software

1) Positing of product to be very clear – To Market, To Employees and To Self

2) Concentrate on Product Development

3) Build the Market.

3) Focus on New regions and localize regularly

4) Most importantly Build Trust and Partner well.

5) Customer Deliver the Key

6) Understand Markets well.

Listen to the Podcast here.

The baton now passed from to Sanjay to Ketan CEO Mettl. Ketan gives a very good insight into Mettl and sets the stage.

Ketan believes that business is like a marathon but one must run it like a sprint. Therefore must Start selling Early- even before the product comes out enabling you to get the information to all. Prioritize – Initially launch the product on what you feel–then tweak it to evolve the actual needs. Use Analytics to identify differentiators and then set benchmarks. Focus on Closures but budget for long sales cycles – have enough gas in the fuel tank. Always treat your feedback seriously this helps you to better customer delivery.


Build your brand well – Build Trust – Hire the Best – Hire slow. Clearly specify the product mix therefore maintain the Brand.

Interestingly Ketan remarked that Introverts can be better sellers than extroverts- Why? Well the key is to establish strong personal connects, be clear and not over-commit. Qualities where Introverts can be better sellers.

Ketan’s  Gangnam style  for Mettl.

1) Start Selling Early

2) Prioritize and Launch Fast

3) Build Differentiators

4) Course correction based on Feedback

5) Have the Bear Fat to sustain theWinter.

6) Most importantly Build Trust.

Listen to the audio podcast here of Ketan’s talk.

Ketan gave a wonderful insight of his company and then Vishal of Rategain share his story.

Vishal says that before they launched their products they started writing articles on the subject/space of their product and this helped them to get the first order by engaging their customers and peaking their interest. This helped them to partner with their biggest competitor and thus tap their(competitor’s) home market – Spain first. Vishal believes the speed to market is very essential to launch your products fast. When you sometimes target the weakness of your competition new opportunities open up. They were able to get 300 hotels to sign up in a just a matter of 3 month. This helped them to partner the competition to market their products. This also had a problem, the local hotels did not know RateGain but knew their competitor. Team Rate Gain then made a real effort to delink themselves and market the product directly this ensured that their Brand was known. They invested in it to Build the Brand.

Since they have operated in various developed markets some things which work for them are Webinar sales – where they invite their prospective clients to join in and make their own mind. From Customers becoming advocates for them on Linkedin to localizing their business to peer marketing, all have worked to create huge amount of word of mouth and Brand Awareness which have all helped in Sales.


Vishal’s Gangnam style for RateGain

1) Write articles on the Space of the product

2) Partner with Locals or Competition

3) Prioritize and Launch Fast

4) Build the Brand

5) Focus on New regions and localize regularly

6) Use Linkedin, Twitter and Webinars to reach out

7) Partner Well

8) All Chain Stakeholders need to be targeted.

Listen to the Podcast here.

The Various inputs helped in gaining a wonderful insight into how a company could go Gangnam. Hope I have been able to capture every bit of information hear, an hope if you have attended the sessions you will be able to add your takeaways too.

The Wonderful insight shared will certainly help all the entrepreneurs out there and for this Avinash deserves huge credit in ensuring that latest trends are captured. Also Rajat for very aptly naming the theme Gangnam style.

Listen to the Podcast here.

Look forward to seeing you all at the next edition in Feb….

Guest post by Nakul Saxena, NITEE

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Who is your customer?

Get this right and you have taken the first step towards success in your software product venture, whether on the web or on-premise.
As a corollary, if this is not clear, then no matter how sophisticated your product is, it will always be a struggle.

As many entrepreneurs are aware, the success of a product depends on the product itself, the pricing, the promotion and the physical distribution as defined by the 4 P’s.

Even in this era where pricing is irrelevant given the Free or Freemium business models, one needs to spend money to get signups or visitors and that will be wasted if the target customer profile is not defined properly.

In a software product business, getting the customer profile right is the key even to start because the specifications would depend on the type of customer.  The design and the development would follow.

Let me illustrate this with an example.
A friend of mine asked me to help market his POS Retail Software Product that he had already developed.  To better understand his product and strategy, I asked him a single question “Who is your customer?”  He looked at me as if I was an alien and said “Obviously a retail business!!”

Undeterred by his tone, I asked a follow-up question, “What kind of retail?” and by this time he was convinced that talking to me was useless.  Just to humour me, he said “Any kind of retail shop will benefit from my software”. And there started the “Spanish inquisition”.

Me: “So the neighbourhood grocery store as well as big bazaar can use it? A shop selling Bengal sweets as well as Bata? All of them fall under the category of Retail”

And then he saw the point and the implications of lack of clarity on:  

The Product itself:

  • The scope:  The small grocery shop may need at best just the billing and the receivables whereas the chain might want to network it’s branches and would like to know the traffic pattern to have the right number of staff to meet the demand.
  • Hardware requirements: A small shop may do with an assembled PC and a strip printer whereas the big ones may want POS Terminals with scanners.
  • Security: Just a simple login would suffice for a small shop while elaborate security levels need to be defined for a large outfit with clearly defined responsibilities

The Price:

  • The shop owner might be willing to spend a small amount for the PC, printer and the software and he may not give too much credence to the software.  You cannot charge him a few lakhs for the software alone.
  • In the case of a large chain, the price point must be much higher given the need for metrics, security, deployment at different locations, training, hand-holding etc.

The Promotion

  • If it is for the small shops then one case use mailers or approach a set of similar shops in an area to generate interest.  One can also use local newspapers to create some awareness.
  • To catch the eye of the chains, one must advertise in industry journals, magazines and perhaps take stalls at industry events

Physical Distribution

  • For the retail shop, a one-one approach using the salesperson may perhaps work best.
  • For the large chains, one has to go with the hardware vendors or system integrators or retail IT consultants (I hope such a specialty exists given the explosion of retail in our country)

I know that this distinction is very simplistic but I have chosen it to give an idea. Having seen the importance of defining the target customer, we will look at some parameters to do it effectively, in the next post