Archives for category: Strategy

I saw the headline of an article the other day, and clicked on it, because it looked of interest. Except I had clicked on for the wrong reason, or at least my analysis was wrong.

The headline was: When is a Sale a Sale? I thought it was a cool article about defining when you have successfully closed a sale; some new insight on sales methodology. What we would call closing a deal in B2B. Is it a sale because the customer commits to the order verbally? Is it the receipt of the PO or the contract? Or is it the payment of the invoice or the handover of the cash?

In fact it was nothing of the sort. The article was a consumer-focused piece about what constitutes a selling event, the other kind of sale. It was about the retail industry trending towards a state of permanent sales and how difficult it is now to differentiate a true sales event and a retail status that is claiming ‘special’ sales status when it really isn’t.

Not to mention how difficult it is for retailers to get out of that sales spiral and protect their margins.

So, two different kinds of sale, and I clicked through under false pretences, but an interesting skim-read nonetheless.

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On the 4th of January 2009 I started a food diary. Actually it was kind of an everything diary. Weight, health and fitness activities, the weather, and a quick scribbled account of what I got up to that day. It detailed exactly what I had for breakfast, lunch, dinner and other snacks, how much water I drank, and how much alcohol. When I look back, I would say that, arbitrarily, it’s 90% accurate. Oh, and there was a two week summer holiday where I recorded the information on my phone and accidentally deleted it before it got to my laptop…

Today marks over 10 years of my food diary. If I want to know – I doubt you will – exactly what I ate, drank and filled my day with on any one of the last three-and-a-half thousand days, I can find out in a couple of clicks.

I blogged some time ago about the benefits of keeping a food diary. It keeps you honest, and that helps with health and weight management. For example, I’m about 2 pounds/1 kilo lighter now than I was a decade ago. I’ve probably lost a bit of muscle tone and maybe 2 centimetres of height, but for someone who during that time moved from his fifth decade into his sixth, I think that’s a pretty decent achievement.

The collected data from 2009 to now must be of some value to someone, I would have thought? If you think so, do let me know.

As you may know, I like round numbers and I like doing things for a set amount of time before I call it a day. I’ve mentioned more than once how I may stop at 1,000 blog posts.

Maybe today will be my last food diary entry. Then again, I was going to retire at 30, 40 and 50…

Do we engage in human hibernation? I think we do, to a certain degree. I know I do, to a larger degree.

January is my hibernation month. I love Christmas, it’s my favourite part of the year, but then New Year’s Day always comes around so quickly.

In golfing western Ireland, when you hit a low ‘scuttery’ shot along the ground, instead of hitting one that flies like an angel, you sometimes call it a ‘kiss me erse’ shot. That’s January for me. It’s a bit of a kiss me erse month. You’ve no money, the nights are long and cold, you know you should be gambolling off to the gym like a March lamb, and there’s very little sport to commend itself.

I always try to delay my return to work as late as possible in January, to make it a shorter working month. It’s a month for making lists, putting the fire on and planning what you’re going to do with the year, if only you can get 8-and-one-third percent of it out of the way first.

Pretty soon, the 1st of February comes around, it’s a short month, and Rugby’s 6 Nations and Football’s Champions’ League ease us into the year proper. Happy Days.

But for now, let me pull the proverbial duvet over my head and give me a nudge in 4 weeks’ time.

I’m on holiday as you read this. I’m not even in the country where I normally write these posts. I’ve jetted off with the family I helped to create to visit the family I was born into, as many of you do this time of year.

It’s a time for taking stock, considering where you are, and what you’re going to change or do differently next year. I always try and take off between Christmas and New Year if I can. I’m very conscious of people who work in the service industry, or people like my friend who works in the supply chain industry, that this time of year has a very stop-start feel to it. They can’t use this time of year for taking stock, they have to do it another time.

You can’t take stock in a couple of days. You need at least a week’s run at it, so you can decompress, assess and figure out the old traffic lights: what will I give the red light to and stop doing, what will I review on amber, and what will I give the green light to and continue or start doing? Then you can recoil yourself, ready to get into it.

Some people like to be working this time of the year, with a day or two off here and there. Some people have to work. I’m lucky, I have the luxury of not having to, usually, and so for me it’s a good time for taking a break, taking soundings from others and taking stock.

When we’re taught the rudiments of writing a press release, we’re sometimes encouraged to get to the ‘five w’s’ in the first paragraph. Who, What, When, Where, Why?

Why is often the last W to be addressed, and it’s probably the most important W. Why are we doing this? What impact are we hoping to have?

I remember an ad campaign for a national newspaper a few years ago, for a broadsheet rather than a tabloid, which was all about the why. I thought it was a great campaign. The answer to why is this happening or why did this happen is the most informative answer.

Why is a very pertinent question to ask in business as well. Why are we doing this? Why are we in business? This is a concept popularised by Simon Sinek in his book Starting With Why. I hadn’t heard about the author or the concept until a good friend told me about it some time ago. It’s a really simple and profound way of thinking about your business or your organisation and what its purpose for existing is.

I love the concept, but I haven’t read the book yet. It’s sitting digitally on my Kindle, working its way up my list and I’ll get to it over the holidays. What we do is something every company knows. How we do it is something that a smaller proportion of them knows. Only the very special ones understand, throughout the organisation, why they do what they do, why they’re in business in the first place, and that’s where great organisations should start. If you don’t have the time or the inclination to read the book, take exactly 5 minutes to watch this abridged TED talk, it’s well worth it.

Then you can ask yourself the question why are you in business. And if you don’t have a good answer, maybe start a new organisation with a new answer.

 

 

A while back I wrote a post called Churn or Growth for Startups, and referenced the excellent content from the VC blogger Tom Tunguz. The answer was churn.

What should be the focus for the SaaS company looking to scale its business and grow at a rate that attracts heathy valuations and juicy multiples for an IPO or an exit? It’s grown by bringing on new companies and keeping them, so surely it should keep adding new logos, right?

The beauty of the SaaS model is that on the first of the year you can count on the revenues for all your customers who are renewing their annual commitment. Going from $80m to 100m in one year may seem like a giant jump, but the successful SaaS company has close to the €80 coming in during month 1, so it’s not such a big leap and, indeed, many such companies see themselves growing at phenomenal annual rates, far in excess of the 25% in my example.

The scaling company should focus on keeping and growing its existing customer base.

Have a look at this post from Mr Tunguz, which he said in an email recently was far and away the most popular post he did in 2018, 10 times more popular in fact than the next most popular post. Which is intriguing, since the post he links to is from 2016…

So startups should focus on preventing churn, and more established companies should focus on renewals, which is to say they should focus on preventing churn…

I was asked the other day what the average SaaS customer length is. I responded confidently that I thought it was about three-and-a-half years. My customer disagreed, though not without some uncertainty, and felt it was longer.

So I checked online, as you do, and I couldn’t find my three-and-a-half years statistic anywhere. Perhaps it was a customer I’d worked with previously that I was misremembering as an average. Anyway, I couldn’t find an average figure for customer churn anywhere. That’s because it depends.

It depends, of course, on the amount of customers you lose, otherwise known as your churn rate. Your average SaaS customer length is 1 divided by your churn rate. So if your churn rate is 5% per month, your average customer length is 20 months, which isn’t great. If it’s 10% per year, then your average SaaS customer length is 10 years, which is a whole lot healthier. Naturally, you can only make these calculations with a good body of data and some history behind you.

If you’re new to the game, then you need to do some research around average churn for the sector you sell into, or the size of company you sell into. To generalise grossly, churn rates tend to be lower the larger the customer you work with, since the deals tend to be bigger, more complex, more embedded, with a higher cost of sale, to generalise on the reasons as well.

If you want to read more on this, you might find this article, this one and this one useful.

 

One of the most difficult challenges with sales training or sales effectiveness – and in fact any kind of change – is overcoming engrained behaviours. It’s only through repeated application of the new way, with all the pain and discomfort that comes with it, that the new way eventually becomes the accepted way and a second nature thing.

I was reminded of this recently in my table tennis endeavours. I’ve been playing competitively for decades, and I’ve always concentrated on putting the ball in different corners to move my opponent around. It is deeply and completely subconscious, after a million-plus repetitions.

I’ve been studying a lot of table tennis matches on youtube over the last few months, as I look for new ways to compensate for my gradual decline in fitness and sharpness due to Father Time’s relentless advances. I’ve noticed that a lot of the top players hit a lot of shots into the crossover, which is the awkward spot on the right hip – of the right-handed player – between the forehand and the backhand, effectively jamming them up.

This is not new. One of the first things we were taught as kids was hit to the corners against a short opponent, and into the middle for a tall player. Maybe twenty years ago our local club had a coaching session with a guest coach who again stressed the crossover tactic and quoted the statistic that the then star player in England, Desmond Douglas, would hit up to 40% of shots down the crossover.

I’ve been trying this with renewed effort over the last few weeks and – it’s really, really difficult! The sport is very quick and you don’t have much time to plan and execute. I find myself instinctively following my subconscious, time and time again.

The answer? As with sales, I need to practice more, and compete less, to untrain and retrain myself.

It’s well known that you pay more for branded products than their generic or knock-off equivalents. You get what you pay for, as the saying goes, but also you’re investing in the brand’s equity and goodwill, which comes at a price.

I was in a homeware specialist the other day, looking for an ‘Egg Perfect’, one of those clever things – or clever yolks as the Irish would say, and I like the pun in this context – that you pop into the water with your eggs and it tells you when they’re done to your preference by changing colour.

The price was €9, which I thought was a bit steep, but i’m familiar with the brand and they last ages, so I bought it. On the way home I dropped into a local store that sells almost literally everything. I’ve blogged about it before, in fact. They too had immersive egg timers, the generic versions. The price? €2.

So the branded version was 4-and-a-half times the cost of its imitator, a 350% difference. Which, I suppose, is not as bad as the difference between a Gucci handbag or a Rolex watch and their me too counterparts.

The proof’s in the pudding, so we’ll see how the two of them perform over time. Still, I did feel pained when I saw the €2 version. That’s a difference of about a pint and a half between the two of them.

I skim-read a fascinating article the other day that covered an interview with former FLOTUS Michelle Obama.

In it, Ms Obama talked about what she described as Imposter Syndrome, the feeling that sooner or later someone’s going to uncover you as someone who’s blagged their way in to position of status or seniority that’s above their station. I hadn’t heard it described that way before but I immediately latched onto it.

Who else feels that from time to time? More accurately, who hasn’t felt in a weak moment that they’re one misstep away from being exposed as a fraud, or at best under-qualified for the role they’re performing?

This is a normal reaction from time to time, normal at least for people who are pushing themselves, moving up the ladder trying new things, joining new groups, doing the one thing every day that slightly scares them. It’s a natural symptom of progress. The first time you step up there’s new things to learn and uncertainty before you get dug in. Then you have to move again before you get too dug in.

It seems too that since the article above others have identified with it and shared their stories, which you can read about here.