Do we even need outside sales reps today?


Outside account executives are an expensive proposition whose statistical effectiveness is falling. Many CEOs and CFOs I speak with are frustrated with the results, and they resent the costs associated with salespeople often identified as “road warriors”, “big hitters” and “closers”. More and more frequently, companies are opting to replace outside account executives with channel partners and/or more (less expensive) inside sales resources. In fact, according to SalesLoft, inside sales is growing 15 times faster than outside sales. I’ve even seen major initiatives at Fortune 50 companies to develop the means to eliminate outside sales executives altogether.

Perception Problem or Real Issue?

As someone who has been and managed enterprise salespeople for over 20 years, I’m a little sensitive to this debate. The notion that you can eliminate highly skilled and experienced outside reps handling complex deals worth millions and even tens of millions of dollars, baffles me. However, whether you agree or not, let’s acknowledge that something is going on that is grounded in reality and not just an issue of perception – B2B sales and account executives aren’t working the way they have been for many years.  There’s a couple factors that go into it.

(1) Buyers are unimpressed – Buyers are frustrated and overwhelmed. About 75% of buyers say they want to skip face-to-face interaction with a sales rep altogether. They would rather rely on technology to close gaps in product and service knowledge and if they have to interact directly, are happy to do so via webinars and videoconferencing.  Further, they assert sales reps aren’t capable of understanding the problem the buyers are trying to solve and then how the product might address them.  What they’re doing is pushing their own agenda and pitching feature and function.

(2) These numbers don’t lie –  The percentage of account executives in B2B sales that are making their quota each year is dropping.  It’s been falling for five years and is now down to 53% of account executives making plan. In addition, inside sales teams often cite 40-90% lower customer acquisition costs. This data frequently winds up senior management.

(3) Perceptions feeds detractors – Effective outside sales reps have outstanding people skills and are typically ambitious, self-motivated and results-oriented. They see themselves as “drivers” as do others, which can certainly rub some people the wrong way. They are typically male (74% of outside sales reps are male versus a more even split of 56-44 male-to-female for inside sales) and have more than 5 years’ experience. They are paid significantly more than an average inside salesperson and close deals – on average – about 40% of the time.

With that in mind if you’re a senior finance executive or a senior leader it’s hard not to look at an outside sales organization and say, “Can’t we be doing something to make it perform better and take some cost out?”

What’s the Right Mix?

If you have a nagging feeling that you are too dependent on the big hitter with the million-dollar Rolodex (this already sounds impossibly dated as I write it) to bring in deals, you may well be right. Ask some of these questions.

Transactional or Transformative? Buyers don’t need face-to-face meetings to get more information. In fact, they resent it as a waste of time, particularly if your representative is hawking features and functions. If your buyers are small to medium sized businesses with lower price points, lower LTV (life time value), they are more transactional in nature and can likely be handled by inside sales for the entire sales process.  However, if your product or solution impacts many stakeholders (IT, engineering, marketing),requires integration of a complex technology stack, promises to deliver 10x better service or new business models, the game has changed. You need problem solvers who are capable of talking to executive level decision makers face-to-face, understanding the outcomes they need and winning their sponsorship. 

Non-Strategic or Strategic? Do you use strategic account planning?  Most companies have no formal approach for strategic account planning. These companies report their win rate on forecast strategic account deals was 7.7% lower than the average win rate for all forecast deals. You may not need strategic account planning if your business is not defined geographically or by size of buyer or the deal.  What would it mean to lose a renewal / expansion opportunity from one of your top 10 accounts? If you are like most companies, and the top 20% of clients yield 80% of revenue, you may need to look at strategic account planning more closely and an outside sales rep may be a better option to develop the relationship with those important buyers. 

Simple or Complex? Is your product and service provided customized or is it a standard offering? Do you use on-site assessments, interviews and collaboration or is your information gathering and fulfillment done remotely? Is your sales cycle defined by hours and days or weeks and months?  The answers to these should guide your mix of inside or outside sales reps, though in complex cases also point to the need for more solution architects.

What we’ve got to be focused on is increasing the effectiveness of salespeople, particularly the outside salespeople:

  • They’ve should be spending less time on tedious tasks.
  • They’ve got to have more data and tools (AI).
  • They must be problem solvers who are capable of executive level conversation.
  • They must be focused on the right accounts and opportunities.

Start Here

How do you figure out the right answer for your company?

Despite the desire, there is not one answer that fits all companies.  What has worked best for me is to start on the quantitative side of analysis.  What are the KPI’s for the organization and the sales reps? Examples of great starting points include win/loss/delay rates, close ratios, conversion rate for MQL to SQL, pipeline numbers and ages by stage.

By starting quantitatively, it provides a framework to dig behind the numbers and take a look at market conditions, whether you have the right people, their training, sales process, tools and overall sales management.

From there, it’s possible to understand the right size and mix of salesforce, what training and process changes are needed, where AI can boost effectiveness and how to deliver the performance that management and investors are expecting.

The key is not to make an up-and-down decision based on perception or even close rates. Look at your sales from a perspective of what you sell, to whom and how. From there, you can begin to engineer both the right sales organization and the right mix of people to meet your goals.

Andy Shober is a Partner in TechCXO’s Denver office. Send him a note at andy.shober@techcxo.com and see his full bio here.

AI for Marketers – 3 Critical Questions

AI… Artificial Intelligence may have a greater impact on business, communication and interaction than social media has today, according to Marketing Expert Jeffrey Whitney.

We ask him three critical questions for how marketers should be thinking about AI in the new year.

What impact do you think AI will have on marketing strategy in 2018?

JW: The debate is over. AI is already having a huge impact on marketing. Amazon, the company that wants to eat everyone’s lunch is driving a third of its business from an AI-powered function.

But, it’s not just large corporations that can benefit, AI can play a critical role in everything from building target lists for start-ups, to driving account based marketing, to keeping up with cross-channel buyer preference and next-best-action.

AI has the potential to revolutionize customer engagement, customer service, and marketing automation. It can enhance the way we communication with new, current, and inactive customers, and automate admin functions in the backend. In other words, it can help make marketing and marketing operations far more efficient and effective.

What kinds of skills and insight/intelligence will marketing professionals need in the future to work with AI?

JW: What marketing professionals need is a basic understanding of AI. AI systems shouldn’t require you to become a mathematician or a data scientist. Just like we don’t need to be a mechanical engineer to use cars with AI system, marketing professionals will be able to focus on the results not the process.

AI can have a far greater impact on marketing than even social media.

How should a marketing department get started with AI?

JW: In 2018, marketing departments should be using, testing, or at least strategizing for AI. Immediately, look for tools that solve real business problems, now. I have a small start-up client that’s using an AI tool to build its target list. Another client uses it to pull together all customer interactions across channels to better understanding them in real-time (rather than waiting 2-3 months for the IT group to analyze the data). A third is looking at AI tools to help with analyzing their account-based marketing targets.   These are just a few examples and none of these clients have massive IT resources or particular strengths in AI.

Then longer term, as you better understand AI, look for ways that can dramatically change your marketing paradigm.

AI Briefer for Marketers

Like my peers, as a longtime CMO, I’ve learned to deal with rapid technology change. But, each new technology can create fear, uncertainty and doubt until we understand it better. No doubt, AI, with all its hype and science fiction legacy, fits this bill. But to remain current and relevant, CMOs must quickly understand and begin to apply AI. To help, from one CMO to another, here’s a short AI CMO Primer.

Can I put off AI until tomorrow, next month, next year?

The answer is no, no, and no. AI is here. Waiting to deal with it risks putting you well behind the curve. As you can see below, leading businesses are already either using AI to great effect or actively planning for it.

• Amazon, the company that wants to eat everyone’s lunch, is already driving a third of its business from a AI-powered function: its recommended purchases.
• In a June 2016 report, Weber Shandwick found that 68% of CMOs report their company is “planning for business in the AI era” with 55% of CMOs expecting AI to have a “greater impact on marketing and communications than social media ever had.”

To wait is to get left behind. Fortunately, getting started doesn’t have to be painful or costly.

What is AI and how does it differ from machine learning, and cognitive intelligence?

Academic experts might hate my explanation, but differentiating between AI, machine learning and cognitive intelligence from a practical CMO perspective isn’t necessary. I use AI as an umbrella term that refers to software that carries out a task that normally requires human intuition, including learning and problem solving.

AI can be thought of as a set of repeatable steps, and so while AI doesn’t technically replicate free-will and decision making, it does map out these steps and uses computer processing speed to make its way through them to come to an outcome. And it often can do this much faster while considering far more relevant data than a human might.

Why is AI ready for marketing now? How can AI be applied to marketing?

AI has the potential to revolutionize engagement, customer service, and automation. It can enhance the way we communication with new, current, and past customers, and automate admin functions in the backend. In other words, it can help make marketing more efficient and effective.

AI can far more accurately predict next best interaction, by churning through (in seconds) all relevant data about the customers – purchases, interactions, social media posts, email exchanges and then learn from the results and do it on a scale not possible previously.

For example, let’s say you have a few million customers and want to communicate with them as if you know them very well, and offer them something of value – specifically to them. AI can enable that level of personalization at a scale of millions and in near real time.

In short, AI can save marketers time and bring companies far closer to our customers.

Do I need to become an AI expert?

The short answer is no. AI systems shouldn’t require you to become a mathematician. With good AI systems, you’ll be able to focus on the results not the process of churning through of thousands, millions or trillions of data points and arriving at the insights you need.

How much will it cost?

Surprisingly, AI systems can reduce costs and eliminate waste. AI systems can significantly reduce the number of data engineers and data scientists required today to prep data and create insights. I’ve seen AI projects deployed within weeks with yearly costs less than that of a single data scientist.

And AI can take wasted effort out of the system by providing a deeper understanding of what your customers want and how to interact with them effectively.

How do I get started?

First, start exploring today. Read, talk to other CMOs and marketing technologists), and evaluate first hand – select a contained, but impactful area. A subset of your customer loyalty system could make a great initial project. Loyal customers should be the life blood of your company, but often are underserved, because it’s so difficult to pull together and analyze all relevant data in a timely manner. This is a perfect fit for AI, as compared to prospects, there’s typically a lot more known data for AI to analyze. And it’s a project where you can start seeing high-impact results in weeks.

Summary

AI is unavoidable and should be desirable. Its critical to research and experience it first-hand. And the results might surprise you. Unlike other systems that can take months and cause havoc (e.g. CRM systems), working with ZyloTech, I’ve seen companies deploy AI in a matter of weeks, without needing technical expertise, and experience eye-opening results.

High Cost of Sales Attrition and What to do About it

Sales force attrition ranks among the top concerns for Chief Sales Officers because of the two-headed monster it quickly becomes, particularly for how attrition insidiously affects annual sales plans and the make-up of your team. Here are some key numbers:


Attrition – Sales force attrition has a near 50/50 split between voluntary departures – those sales reps you don’t want to lose – and involuntary dismissals, typically underperformers who are not working out. According the CSO Insights, the premier sales survey firm that surveys 4,000 CSOs each year, attrition is averaging 25.8% (see Figure1).

annual-rep-turnover

Cost per Rep – The cost of sales force attrition may be more than you think. Companies that closely follow their attrition rates determine a cost per departed sales rep to be from $500k to over a $1M. If that sounds high, think about what happens when you lose a star sales rep, particularly to the competition.

  • They take the clients with them
  • They were trusted yet they left- big morale question for the remaining
  • Their departure implies a problem

Recruiting/On-Boarding – On-boarding new reps cost you development time and money. The ramp time for seasoned reps is still at least six months. As a sales leader if you are reacting to the loss, you are in recruiting mode instead of selling and lost revenue potential is assigned to others further burden on their plan.

Less than “Full Employment” –  Most sales plans fail to properly account for attrition because they assume “full employment” against their plan (see Figure 2). It’s easy to figure out if you lose your stars to voluntary attrition and you keep your laggards who should be involuntarily let go. This creates a real problem because you are attacking the sales plan with a less than 100% team. You keep your laggards hoping for a miracle to make plan. In essence you are putting the destiny of success in the hands of the “60 percenters” to perform at 135% of plan.

It gets worse at the beginning of the new year when you’ve been talked into a sales plan increase and then the departures begin. You never get ahead. In fact, you’re behind before you get started and oftentimes never catch-up.

Cost of Sales Attrition – Part 1

The High Cost of Sales Force Attrition: And What to Do About It

Sales force attrition ranks among the top concerns for Chief Sales Officers because of the two-headed monster it quickly becomes, particularly for how attrition insidiously affects annual sales plans and the make-up of your team.

Here are some key numbers.

Attrition – Sales force attrition has a near 50/50 split between voluntary departures – those sales reps you don’t want to lose – and involuntary dismissals, typically underperformers who are not working out. According the CSO Insights, the premier sales survey firm that surveys 4,000 CSOs each year, attrition is averaging 25.8% (see Figure1).

Cost per Rep – The cost of sales force attrition may be more than you think. Companies that closely follow their attrition rates determine a cost per departed sales rep to be from $500k to over a $1M. If that sounds high, think about what happens when you lose a star sales rep, particularly to the competition.

They take the clients with them
They were trusted yet they left- big morale question for the remaining
Their departure implies a problem
Recruiting/On-Boarding – On-boarding new reps cost you development time and money. The ramp time for seasoned reps is still at least six months. As a sales leader if you are reacting to the loss, you are in recruiting mode instead of selling and lost revenue potential is assigned to others further burden on their plan.

Less than “Full Employment” – Most sales plans fail to properly account for attrition because they assume “full employment” against their plan (see Figure 2). It’s easy to figure out if you lose your stars to voluntary attrition and you keep your laggards who should be involuntarily let go. This creates a real problem because you are attacking the sales plan with a less than 100% team. You keep your laggards hoping for a miracle to make plan. In essence you are putting the destiny of success in the hands of the “60 percenters” to perform at 135% of plan.

It gets worse at the beginning of the new year when you’ve been talked into a sales plan increase then the departures begin. You never get ahead. In fact, you’re behind before you get started and oftentimes never catch-up.

In Part 2 of this series we’re going go give you a Four-Part Plan: Stop the Silent Profit Killer: How to Create a Retention & Redeployment Strategy.

How to Navigate a CSO Departure Without Losing Revenue Momentum

The voluntary or involuntary loss of a head of sales can be one of the most disruptive events for any company, particularly a startup. Revenue plans for the quarter and the entire year immediately become more uncertain, even if your head of sales was shown the door. Also, several trends specific to securing tech sales and marketing executives add even more pressure to the organization, including:

  1. Shorter Tenures – Average tenure for a Chief Sales Officer is now less than 24 months (almost as short as a CMO).
  2. Historically High Turnover – Shorter tenures and higher turnover rates go hand-in-hand. More executive sales jobs are opening up with fewer of the right people to fill them.
  3. Longer Searches – Expect 4-5 months to complete an executive sales or marketing search, with another several weeks for onboarding and ramp-up.
  4. Lack of Internal Successors – In most cases, companies have fired the previous CSO and they don’t have an internal successor to fill the gap.

Download the PDF – CSO Comparison: On Demand vs In House

The net result is a one to two quarter gap in sales coverage. Sales coverage — no matter how badly lacking previously — will have holes even when an executive team, board and/or founder attempt to step in to bridge the gap. Even more problematic is when the issue behind poor sales is not just sales management performance but a breakdown in the sales supply chain that may include problems with the overall strategy, product or service, the target market, marketing programs or customer success processes.

The comparison chart/infographic we include here for download is less about replacing your CSO with an interim executive for the long-term and more about what you will do between in-house CSOs.

With interim or fractional CSO support, TechCXO enters engagements knowing that our role includes helping in the search for our replacement. We come in with the understanding that our job is to stabilize revenue, identify revenue supply chain issues, recommend necessary strategic and tactical repairs, to help implement changes, and help restart momentum while the client is looking for a permanent placement.

Peter Biro – Why choose TechCXO?

Why would an accomplished entrepreneur, CFO, Stanford MBA with an engineering degree from Duke choose the TechCXO on-demand executive model for his career? We asked him (Peter Biro).

Peter Biro is an experienced operating and financial executive and entrepreneur with deep experience in enterprises from pre-revenue to $100M. Peter is focused on early-stage infrastructure, software and SaaS businesses in need of assistance in fundraising and transaction execution, scaling their finance and sales operations processes functions, and taking their businesses global.

He specializes in financial transactions, from financings to M&A to optimizing economics of different sales channels, for companies up to $50M in revenue.  He also specializes in assisting Israeli-based technology companies.

He has served in a variety of operating roles in technology companies:

  • CFO of ObserveIT – An Israeli security software company backed by Bain Capital Ventures.
  • VP of Business Development of syndicated data provider Restaurant Sciences (merged with GuestMetrics).
  • COO of of Lyris, Inc. (acquired by Aurea) – A publicly-traded digital marketing software, which he helped create through a number of complementary acquisitions.
  • Co-founder of Five Guys Burgers and Fries – The Northeast’s largest franchise group.
  • Entrepreneur in Residence – General Catalyst Partners. Peter vetted transactions and helped launch Icelandicdata center company, Verne Global.
  • Founder of The Cowper Group – A management consultancy focused on buy-side M&A for middle market technology companies

He began his career in IT on Wall Street.  Peter holds a BSEE from Duke University and an MBA from Stanford.

Robotic Automation Leader and TechCXO Client Soft Robotics Raises $20M

Soft Robotics’ proprietary materials and machines are doing incredible things for food, beverage and advanced manufacturing industries. The company’s innovation allows a robot to grasp and manipulate items of varying size, shape and weight, including a tomato, bagel (see images) and even cupcakes. TechCXO is proud to have assisted Soft Robotics’ capital raise of $20M in an oversubscribed funding round.  Boston-based TechCXO Partner Peter Biro has been assisting Soft Robotics in accounting and finance functions, as well as advising the company on its capital raise.

The following is from Soft Robotics’ press release:

CAMBRIDGE, Mass., May 2, 2018 /PRNewswire/ — Award-winning industrial robotics company Soft Robotics announced today that it has raised $20M in an oversubscribed funding round. The new investors include Scale Venture Partners, Calibrate Ventures, Honeywell Ventures, Tekfen Ventures, Yamaha Motor Co., Ltd., with Hyperplane Venture Capitalleading the round. Existing investors include Material Impact, ABB Technology Ventures, Taylor Farms Ventures and Haiyin Capital. Joining the Board of Directors will be Rory O’Driscoll from Scale Venture Partners and Kevin Dunlap from Calibrate Ventures.

Soft Robotics unlocks robotic automation for large, meaningful markets and labor starved industries such as food and beverage, advanced

Soft Robotics’ machines can grasp delicate items

manufacturing and e-commerce. Leveraging patented material science and AI algorithms, Soft Robotics designs and builds automation solutions and soft robotic gripping systems that can grasp and manipulate items with the same dexterity of the human hand. Since the company’s inception, its technology platform has experienced substantial customer validation and adoption, with over 80% year over year revenue growth and production installations running 24/7 for Fortune 500 companies and Dow 30 components, including Just Born Quality Confections (maker of Peeps).

“We’re proud of the team’s work to date to scale up the Soft Robotics’ technology platform and gain significant commercial traction across our customer verticals, said Soft Robotics CEO Carl Vause. “We’ve been able to address some of our customers’ largest supply chain and automation challenges, from picking and packing fresh produce and raw proteins, to bin picking and retail order fulfillment.”

ABB, a leader in robotics and industrial automation, sees the investment in Soft Robotics as part of ABB’s overall strategy to shape the future of industrial digitalization and the automated warehouse.

“We saw early on that the Soft Robotics solution is a paradigm shift in the way our machines interact with their environment, especially in their ability to grasp deformable, delicate, binned or otherwise complex items,” said Grant Allen, Head of Ventures at ABB Group. “As a leader in industrial manipulation with over 300,000 robots deployed, ABB sees a huge number of amplifying automation solutions but the intuitive control software Soft Robotics has created combined with their agile gripper is a linchpin of the automated warehouse.  In an era of increasingly high mix, low volume production cycles coupled with the need for pain-free automation configurability, we are also extremely excited about the direction Soft Robotics is taking their core technology with SuperPick, allowing ABB arms to do more with less training, greater accuracy and increasing autonomy.”

Soft RoboticsThis funding round comes at a pivotal time in Soft Robotics’ growth. Having proven the economic benefit and scalability of the technology, the company is today at a critical moment of accelerating its commercial penetration plans and new product roadmap.

“As investors we aim to match innovative technologies with major, unmet market needs,” said Rory O’Driscoll, Partner at Scale Venture Partners. “The $40B industrial automation market is large and growing, but largely limited to industries like automotive and semiconductor. Existing rigid robotic technology just doesn’t work for industries such as food and beverage or e-commerce, because of the variability of the product and the unstructured nature of the environment. With so many industries facing mounting pressure to automate, we aren’t surprised that there has been such rapid adoption of Soft Robotics’ technology.”

For more information about Soft Robotics, please visit www.softroboticsinc.com.

About Soft Robotics

Soft Robotics designs and builds soft robotic automation systems that can grasp and manipulate items of varying size, shape and weight. Spun out of the Whitesides Group at Harvard University, Soft Robotics is the only company to be commercializing this groundbreaking and proprietary technology platform. Today, the company is a global enterprise solving previously off-limits automation challenges for customers in food & beverage, advanced manufacturing and e-commerce. Soft Robotics’ engineers are building an ecosystem of robots, control systems, data and machine learning to enable the workplace of the future.

Contact:
Elyse Winer
Company Representative
Phone: (617) 645-5183
ewiner@softroboticsinc.com
www.softroboticsinc.com

Additional News Stories

Cambridge-based Soft Robotics to hire, move HQ following $20M raise

Soft Robotics raises $20 million to expand operations

 

How to Keep the Payroll Toothpaste in the Tube

One of my colleagues who is a long-time CFO relayed a rule he had in his companies about people who see payroll data.  Which is: you cannot get another job here that doesn’t involve payroll.  Once you see how much everyone makes, you either stay in that role, or you have to leave the company.

This seemed extreme when I first heard it.  But the more I consider it, the more sense it makes.

In truth, many build stage companies trust this extremely confidential information in the hands of office managers who double as the people who “do” HR, which includes running payroll.  Few of these people have bad intentions.  Many are inexperienced.  And not many things blow up culture faster than exposing this information in the wrong way.   Once that toothpaste is out, you cannot put it back in the tube, and it is very difficult to clean up.

Nothing blows up culture faster than exposing payroll information in the wrong way

So, today I plan to have a reminder conversation with everyone who works with me and handles payroll data.  Not because I don’t trust them – mostly because once you’ve seen this information a thousand times, you can lose sight of how sensitive it really is and how important it is to keep it confidential.

On a related note – another build-stage company payroll risk I frequently see is the “single press of a button” problem.  Meaning, one person can both enter payroll and submit it without an approval step.  I understand why this is tempting in the early stages, and yet: it is a really terrible idea.  (The same goes for bill pay and especially wires, by the way).

Systems like TriNet and ADP actually make it hard to do an approval step in their PEO implementations, which I don’t really understand.  That said – always put in a second pair of eyes on this.  That pair of eyes too is probably bound by the same rule that my partner puts in place: once you see payroll, you can never go back.

This article was adapted from a post that originally appeared in Peter Biro‘s Build Stage CFO blog.

Board Financials

What to include (and leave out) in Board financials

Many a post has been written about rules of thumb for holding effective Board meetings.  People should be present, meaning actually focused on the meeting and not doing other work (this one from Brad Feld at Foundry).   There should be an Executive Session scheduled with plenty of time for it (this one via Fred Wilson of USV).  I’m going to focus in particular how presenting financials can be done in order to maximize value and keep things focused on what is really important.

First of all, whatever you present as the CFO, it needs to be distributed ahead of time, preferably at least 72 hours.  This is one hard and fast rule that I try not to violate whenever possible.  There is nothing worse as the CFO than numbers that go out the night before an 8am meeting.  It’s not just Board members that hate this.  It invites scrutiny and questions, and is a signal – I am big on signaling – that management doesn’t quite have its act together.

[This story was originally posted on Peter Biro’s Build Stage CFO blog]

What should be in the package?  Here are the things I minimally include in businesses that have a meaningful monthly cadence – which most build stage companies do.  For some it’s weekly; an example is an app where week-over-week growth is a meaningful metric.

  • Last month’s P&L vs. original forecast, and YTD vs. forecast
  • Last month’s P&L vs. prior month – dollars view
  • Last month’s P&L vs. prior month – unit economics view (meaning, take your P&L, and divide everything by the unit that’s most important in your business.  Could be square feet, available days for appointments, hours sold, hats – you name it)
  • Meaningful YoY stats by product line, location, or some other way to give investors an idea of where growth is (or is not coming from)
  • Headcount summary – by department, where are we against plan?  For many startups, this is where cash either gets burned (hiring too fast) or revenue growth is thwarted (because you can’t find the right head of marketing and while this saves you money in the short run, it means you are not driving top line in the medium-term)
  • Rolling forecast vs. original projection – meaning, if I re-forecast the business for the rest of the year (which you should be doing on an almost constant basis), where am I going to end up
  • Cash projection

If you have these ready to go 3 days ahead of time in well-formatted slides with pithy color commentary, you’ll serve everyone well.  You might need to add a few more based the particular business that you’re in, but this should get everyone grounded in the results and communicate how things are going.  Investors will have the opportunity to look through the numbers and draw some initial conclusions, which will make the financials review section of the meeting much smoother. Your goal as the CFO is to let the strategic discussion take center stage and let the numbers support that discussion.

Caveat: sometimes you will have Board members/observers who do not read numbers early no matter how early you provide them, and are going to ask nitpick questions about one obscure figure that you know is not vital to anything.  Take a deep breath and go with it.  It’s not constructive behavior, and with any luck, the other Board members will talk to this person offline about expectations.  Your role is to set them high, and keep them there.

What’s in a name? It depends what you put into it

We all understand the risk of Bill Lemon opening up a used car dealership under his name or Messrs. Dewey, Cheatum, and Howe launching their own law firm. Given the power in a name, it’s surprising how little attention is often given to developing the best company or product names.

Having split my marketing career between B2C and B2B companies, I’m often amazed (or maybe disillusioned) at how few of the customer-centric B2C marketing disciplines are adopted by B2B firms. One in particular: Naming. Whether creating names for a new product or for a company.

There is often a failure to recognize that a name can be a tremendous asset. A name can help communicate value, can contribute to why a customer chooses a product or company over another.

Unfortunately, too often the naming exercise is all too brief, without investing the effort that is warranted. “Hey, everyone in the conference room—let’s brainstorm on the name of the new product we are launching next month because our sales materials are due at the printer.” Or worse yet, an email is circulated to team members: “Here are some ideas for names, anyone want to add to this list?”

You’ve seen some of the most egregious errors:

  1. A company is named after the founder: Unless your name is Vidal Sassoon and you’re a famous stylist selling hair care products with a multimillion dollar ad budget, how is your name going to help your sales team sell product?
  2. Company name is based on city or even street name. I was VP Marketing at Manhattan Associates just after they went public. It was (and still is!) a great company with great products and a great team but the name wasn’t an asset to leverage. Besides, there was plenty of confusion: most thought it was because we were based in NYC but we were based in Atlanta. And, actually, “Manhattan” referred to Manhattan Beach, where the company was founded.
  3. Too many products/companies have made up names that mean nothing to the buyer and aren’t connected in any way to any delivered benefit.

Important considerations when developing a naming strategy for a product or company

  1. Your naming strategy should flow from your marketing and positioning strategies (if you don’t have a positioning strategy, please see me after class). What should the name connote? What is the character of the name (e.g. sophisticated, fun, etc.)?
  2. Should the name be more about what the company is or what value it can deliver?
  3. Easy to say and Easy to spell
  4. If possible, one-on-one research with your target audience can be helpful in both name generation and validation.

B2B Names That Are Better Than Others

The name doesn’t have to be literal, nor should it be. It doesn’t have to have any innate meaning. It needs to be something that you can leverage in communication where it will make sense in context.

  • Both “Evergage” (The Real-Time Personalization Platform) and “Reflektion” (Real Time individualized commerce) work as an asset in the website personalization category.
  • “Logility” was launched to offer logistics in supply chain.
  • TechCXO client “PokitDok” makes sense once you learn it is a cloud-based API platform designed to make healthcare transactions more efficient and streamline the business of health.
  • “Chainalytics,” does supply chain consulting and analytics. In a morass of consulting and analytics companies, this name stands out and implies an expertise a buyer might be looking for.It’s easy to see how these names can be leveraged in conveying the values delivered by the company.

The Big Finish

You should look at every customer-facing opportunity to demonstrate why your products and services are better than others.

Strong names provide a differentiating advantage over competitors, and can be effective for promoting the business.

Will the names you select be a real asset that contributes to success—will they resonate with your customers?

Is it time for a Fractional CMO? 5 Scenarios

There is a consistent thread on where the need arises for a fractional CMO. Interestingly, this is consistent whether the company is 2 or 15 years old, whether it’s B2B or B2C, whether they have under $5 million in revenue or over $100 million.

Profile:

  1. Growth has stalled (yet still can be quite profitable)
  2. Objective is to find way to significantly accelerate growth (e.g., double revenue or more)
  3. Only junior to mid-level marketing staff on board, as few as 1 person in the “department”
  4. Marketing plan doesn’t exist
  5. Marketing exists to service sales and/or the CEO

These companies typically have been quite successful but have plateaued. Growth has stalled in part due to the fact that no one in the organization owns the customer across functional silos, someone to champion customer interests and needs, someone with an eye on and in touch with the target market at all times.

Growth has stalled because no one owns the customer across silos

Success has been driven by strong product/service and/or sales effort. And to be successful, plans were developed and adhered to: product development plans, sales plans, financial plans, etc. So it isn’t surprising that marketing hasn’t contributed when there has been no investment in putting together a marketing strategy or plan to fuel growth. “Let’s go to that trade show,” or “let’s advertise on Facebook” falls far short of a plan.

It’s only now that these firms are beginning to recognize the role and value of a CMO and his/her department. In recent posting on www.cmo.com, Jake Sorofman, a research VP at Gartner describes how the “most progressive CMOs think like CEOs.”

He does a great job highlighting how the role is critical to success: “More often than not, CMOs take the lead or substantially contribute to digital commerce, customer experience, and innovation projects, and most CMOs now own or share P&L responsibilities….Customer experience is the new battlefield for competitive differentiation; innovation cycles have compressed; and consumer expectations for personalized and tailored products and experiences are growing rapidly. Marketing is now data-driven, technology-dependent, broader in scope, and more accountable to business metrics than ever before.”

As for the marketing department, Sorofman describes: “The pressure and responsibility is shared across the entire marketing organization. Today, marketers are expected to be both broad and deep…They have utility skills in many aspects of data, technology, design, brand, etc. They don’t need an army to accomplish a whole lot. And they focus their efforts through the lens of the customer and specific KPIs. There’s no hiding behind the veil of internal goals and highly specialized roles anymore.” The full article is here: http://www.cmo.com/interviews/articles/2017/3/3/quick-chat-with-gartners-sorofman-the-most-progressive-cmos-think-like-ceos.html

I was fortunate to have landed my first job at Procter & Gamble where we “owned” the business results of our brand (for me it was Crest and then Vidal Sassoon) as we worked across all functions to ensure brand revenue growth. Subsequently, forward thinkers in B2B and B2C companies hired me to build marketing organizations that were responsible for and led company growth.

In these cases, the CMO became the right hand of the CEO, involved in every decision that impacted the customer which meant every critical decision.

If you lead an organization, ask who “owns” the customer? Is your organization customer-centric? Is there an advocate for what’s right for the customer in every executive meeting? Is there a marketing strategy that clearly positions your firm as different and better for a specific target audience? How thorough is the marketing plan and does that plan lay out a path towards profitable growth?

Clearly, organizations recognize the growing importance of marketing and how CMOs area of responsibility now covers more of the sales/enterprise P&L and customer success functions. In fact, just recently I was engaged in a meeting with a bunch of sales executives across different companies and industries who acknowledged that their relative role is shrinking while marketing might influence as much as 60% of the sales process.

One challenge in this evolution is that CEOs have CMOs and marketing staff without the skillsets to handle the evolution, becoming more frustrated and impatient as expectations increase.

CEOs grow more frustrated and impatient with their CMOs as expectations increase

For small to mid-size companies that can’t afford the risk of failing to find the right CMO who thinks like a CEO (thus risk a bad hiring decision), it is often most expedient and productive to turn to a fractional CMO. This interim executive can instill confidence with the CEO and has the experience to help the organization become customer/marketing-led. He/she can lead existing staff, begin demonstrating the revenue impact of marketing strategies and plans, and establish a structure that can be handed off to a full-time executive.

This creates a natural transition for your on demand/interim CMO who can prove the concept but won’t cost a loaded salary.  Best of all to limit the risk – you can terminate easily at any time.

The Crucial Computer Science Skills Employers Are Craving

You’ve spent a lot of time around technology. Whether through formal training or pursuing your natural interests, you have likely developed a skill set that employers all over will value. But if Computer Science is your subject of choice and potential career direction—you might well wonder if what you have is enough.

What computer science skills matter most? What do you need to land a job in one of the many careers a degree in Computer Science can lead to? How can you demonstrate your abilities to potential employers and turn your skill set into a salary?

Whether you are considering a career in computer programming, web development, software development or one of many other careers tied to this booming field, you want to make sure what you learn will match what employers want. Keep reading to find out which computer science skills matter most to hiring managers and a few bonus skills that will really help you stand out.

This article appeared on Rasmussen College’s website. TechCXO Partner Kevin Carlson is quoted.

The technical computer science skills employers want

We analyzed nearly 3,000,000 online job postings that sought applicants with Computer Science degrees in the last year to find out which technical skills employers were most commonly seeking.* Note that these skills aren’t pulled from listings for a specific job role—they reflect the skills identified in any job postings that are seeking candidates with a Computer Science degree. These are the desired technical skills listed:

  • Java™
  • SQL
  • Software development
  • Project management
  • JavaScript™
  • Software engineering
  • Linux operating systems
  • Python™
  • Business process analysis
  • Information systems design

But hiring managers and experts in various fields assure us that technical skills, while sometimes required for a position, aren’t necessarily the green-light signal job applicants might hope for.

“I care most about an applicant’s ability to solve a problem, how they think through a task and communicate with those around them,” says Kevin Carlson, vice president of development at DataFinch Technologies. “This shows me how they’ll work with the team long-term. I couldn’t care less if they can pass a pop quiz on a certain technology.”

Carlson explains that too many candidates think about meeting short-term needs and whatever is trending in the moment, when hiring is really a long-term play. In technology, constant learning is almost guaranteed, so some employers will be less concerned about which specific technical skills you have and a lot more interested in the soft skills and less-tangible traits and abilities you bring to the table.

Remember, an employer can always teach you a new process or platform—but it’s hard to teach someone to be a team player or a motivated problem-solver.

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