Last week, I shared a post about negative churn – when revenue from existing customers is greater than revenue lost from customers churning (see article). The relevant question, then, is how do companies achieve negative churn? Here are a few options:
  • Additional licenses – This one is common in today’s SaaS companies – selling based on licenses or “seats”. As a team grows, more seats may be required to gain access to a product/ service. 
  • Cross-sell – This type of sale captures cross-functionally opportunities within an organization. For example, a CRM may first be sold to a sales team to manage pipeline. Then, marketing may buy access to the CRM to understand lead and prospect-flow. And so on…
  • Up-sell –Many products and services have tiered business models (packages). Tiered packages allow for companies to address a market’s consumer surplus – sell packages that capitalize on differing price considerations, typically. Think: silver, gold, platinum packages with options that are locked for specific packages.
  • Additional products/ services – Up-selling largely occurs with tiered packages. However, packages are typically within the same product. This sell-on type is about selling a different product/ service. These tend to be complementary offers. For example, a product seller may sell professional services. This can also include things like accessories or service plans (think: cellphone cases or insurance plans).

There are many ways for businesses to continue to sell to existing customers – plenty of latitude to supplement the company’s business model. These are the opportunities that give investors excitement to grow a market beyond its existing.

Tuesday’s post about constructive criticism (Constructive Criticism Gone Awry (As a Receiver)), especially my “unappreciative” reception, made me think about business and sales. In many ways, giving and receiving constructive criticism is similar to selling.
  • The lack of understanding (and lack of trying to understand) lost me as a receiver.The man offering the criticism came in with a solution based off a few brief observations. He did not realize that the gym is a very important place for me – my “safe haven”. As such, speaking at the gym, to me, is unwanted.
  • The validity of the man’s constructive criticism was derailed early from a misunderstood position. Again, without understanding what was happening, the man stated I was being rude by not facing another man – the chiropractor. He did not observe how I was pointing and craning my neck in various positions while talking to a knownchiropractor. How quickly, then, I dismissed his observation.
  • The lack of empathy creates friction and defensiveness. I want to hammer home this point – for successful criticism, product, or service [sale], empathy is imperative. Being a 3rd party observer, the perspective can be objective. However, coming in with a harsh hypothesis can create unwarranted tension – hypotheses such as being rude, the business prospect’s process is broken, etc. Influence without empathy falls on deaf ears.

As a receiver of constructive criticism and a prospect for many products and services, I get it. I want to be the best version of myself. For my company, I want us to excel. That means I am open for feedback and useful products or services. Approach tactfully and with empathy.

A good way to discern if a product or service is a need to have is to see what happens if it breaks or is no longer available. Would customers come kicking and screaming? Or, would the day pass by with little to no utterance? (No, not advocating you deliberately break your product.)
Of course, there’s another effect that can be much harder to realize – how effective was the product or service the first time that additional sales were not necessary. Or, there’s a much longer time between sales that effect can be harder to discern outside of problems.
You can count companies with fantastic quality such as Toyota, a great mattress company, Terminex (or other pest extermination companies), etc. In these cases, referrals and customer satisfaction records may hint at the lasting effects of products and services. Feedback is paramount to the growth of these companies.
Lasting effects is a big deal. They require quality. They require an emotional tie-in to be remembered. They require empathy for the customer to know what is needed. Products, services, and even relationships – personal and professional – require a strict focus on lasting effects.
Consider the lasting effects of the product or service as a measure of success. Consider succession.
Having 100 million users and a billion in revenue is a pretty good validation of an idea. However, Rome was not built in a day. Validating an idea and the subsequent products/ startups is best done in stages.
The progression:
  • Idea – Validating an idea requires initial feedback and feel amongst a select group of potential buyers. This can be done via surveys either in small verbal groups or large online surveys. This can also be through the first 10-20 customers where many may be friendlies.
  • Product/ Service – This is the long sought-after “product-market” fit stage where validation comes from the first cohorts of buyers – scaling from 20 to 100 inorganic customers. Depending on the product/ service, engagement metrics may also provide validation.
  • Company – Let’s call this stage the growth stage for a company. At this stage, validation comes from lower customer churn. In many cases, competition will be fiercer here, so churn could be a problem.
  • Category/ Market – There are clear market leaders with more niche players taking the smaller 20% of the market. (Follow the 80-20 rule.)
Jeff Bezos, CEO Amazon, recently published his letter to Amazon shareholders. It’s a good, inspiring read into Bezos’ vision for Amazon, and how he pushes the company to constantly stay ahead of its competitors. Here are a few key tenets:
  • “Day 1”. Bezos opens the letter describing why he constantly focuses on Day 1 – customer obsession, eager adoption of external trends, etc. Beyond Day 1 is Day 2, “stasis” which leads to irrelevance and then decline and death. He focuses every day on Day 1.
  • “True Customer Obsession” is at the heart of Day 1. Bezos claims every customer, no matter how much s/he says is happy, is dissatisfied. Customers always want more, better – even if s/he doesn’t know it. For Bezos, he pushes Amazon to always innovate on behalf of the customer.
  • As part of true customer obsession is the notion of getting to the true crux of how customers feel about a product or service – “resist ‘proxies’” like surveys.
  • “Embrace External Trends”. In this case, Bezos is referring to realizing and capitalizing on macro trends. Fighting a big trend is like “fighting the future”. Instead, embrace the trend (i.e. artificial intelligence), and you can ride it like a tailwind.
  • “Disagree and commit”. To make decisions expeditiously, Bezos will openly voice his disagreement (usually a genuine disagreement of opinion), but commit to supporting an opposing idea. The idea here is that being wrong may be less costly than being slow – which is “going to be expensive for sure”.
  • Quickly escalate points of disagreement/ misalignment. Making a decision based on “wearing one down” is slow and “de-energizing”.

Give the letter a look-over.

Continuing from last week’s 7 Tips for Customer Case Studies, here are some questions to think about asking (and answering).
  • What does [Customer Name] do?
  • What is your role?
  • What was the challenge(s) you were trying to solve with [Product/ Service]?
  • Why didn’t existing solutions work for you?
  • When you first used [Product/ Service], what was that initial impression?
  • What are the results [Product/ Service] has been able to deliver for you? Your team?
  • Was there another benefit [Product/ Service] enabled that you weren’t expecting?
  • Why would you recommend us to someone else?
The goal of the case study is to, obviously, highlight your product or service. You also want to highlight the success and significance of the customer. This adds credibility to the customer, which gives you credibility.
Sell, sell, sell. That’s what you’re going to do, and that’s what you’ll aim to do. But, your prospect will need more assurances. They need to know they’re not the only buyer. They need proof. Enter testimonials and case studies.

“Nobody gets fired for choosing IBM.”

Ever heard that before? The notion speaks to risk mitigation for the buyer. The subtle message: IBM is a reputable company with thousands of customers. As a buyer of IBM’s products or services, if it doesn’t work, surely it wasn’t because you chose a bad partner. (Versus choosing a riskier partner.)
Testimonials mitigate risk with social and professional proof – who they are, why they chose you, and what were benefits have they achieved.
Here are 7 keys to be mindful of when creating case studies and testimonials:
  1. Who is the case study coming from? Who is the buyer (person) and company? You want this person to be reflective of your target persona(s).
  2. 90% about the customer’s experience and how you enabled them.
  3. Pain-Solution. Tie everything to the pain and what the benefit(s) was. Note: think about primary and tertiary pains and solutions. Hit home with the primary, and layer any tertiary.
  4. Numbers are worth a thousand dollars. Like a resume, quantifying the benefits is key. If you can’t find one, try again… early on, maybe that’s a SWAG.
  5. How do you share? Distribution channels? Are you recording video? Are you just looking for a quick quote to share on a website or marketing collateral? Are you creating a one-pager?
  6. This is your learning experience, too. If your product/ service has truly helped the customer, you’ll hear anecdotes. Be acutely aware of details – they matter.
  7. Sometimes, you must ask for it. People are busy, but they want you to succeed.

Have fun with customer testimonials and case studies. Make them conversational.

I read an interesting article on LinkedIn the other day titled, “The New Normal in Sales: Customer Dysfunction” by Nick Toman, a sales effectiveness professional. The gist is buying processes are increasing at an alarming rate, and it is the dysfunctionat the customer that drives this and “poor” sales outcomes.
I thought about this for a while, and related it to my post, “We Appreciate Everyone Except Our Vendors, and It’s Killing Sales”. Toman’s article provides a perspective at the customer and the ailments killing sales.
A few take-aways from Toman’s article that I’ve noticed over the last year in modern B2B sales:
  • 2.5 years ago, the buyer group consisted of 5.4 stakeholders. Today, that number is 6.8 from 3.4 different functional areas. When you add heads into the buying process, there’s an expectation of a need to get consensus which, ironically, is the result of indecision due to more heads.
  • Customers citing high amounts of dysfunction are 60% less likely to make an ambitious purchase (vs. lower dysfunction companies). This leads to customers buying very simple, bare minimum purchases to assuage the consensus.
  • The average purchase decision takes 4.9 months while the average “no purchase” decision takes 4.7. There’s so much dysfunction that getting any type agreement (go or no-go) is virtually the same. No wonder prospects go radio silent before any feedback.

A few keys then arise from these thoughts. First, be prepared for the long haul and the difficulty of today’s sales. Second, nail the value prop as quick as possible with a very specific target group. Third, reduce the consensus. Get the sale. Expand later.

Remember, all it takes is one opponent (negative feedback) to derail a whole sale.
What are your thoughts? What have you noticed in today’s sales? How would you address the challenges?