Archive for August, 2013

For Start-ups Processes are critical for growth

You have got your first set of paying customers and have validated all your assumptions and now feel you would like to initiate actions for serious go-to-market. Every young enterprise looks forward to this day when they would be able to scale and grow their revenues. The entire focus is on revenues. But do you know what the pre-requisite is to ensure a predictable growth?

PROCESS.

This is something that is completely forgotten or one is not even aware of. It is only process that can bring in predictability and repeatability. Repeatability helps you to manage growth without much pain. What kinds of processes are required to manage growth? To understand this you need to know what growth entails.

Growth is not just about revenues. Revenue is the outcome of growth. To enable revenue growth you need to grow your team, which means hiring more people, who will need to be inducted into the organization and trained. Broadly, the team will comprise of sales, support, administration and management. You need to have a system, a process, to ensure successful induction of these people into the organization in the shortest period of time. A timeline for hiring, for induction and training has to be in place so that the new hires can get productive at the earliest. All this can only be achieved if you have processes in place.

You have a team, now how do you ensure predictable business? To generate business you need to have a target list, information on that target list and get in front of that target list to articulate on your product or service. This means you need to have processes for lead generation, lead management, a sales process which will include data capture, reporting and customer handling, pre-sales for technical support (if your product or service requires it) and last but not the least, post-sales support. The last one is mostly an after-thought, after the sale is made. This could prove to be disastrous for a start-up as every happy customer goes a long way in building your credibility. So planning for a happy customer is imperative. Customers smile only when they have been delivered what was promised …. on time. The answer to this is Process.

In the early days when you were the salesman, CEO, HR, Finance Mgr etc. you could manage it. Somehow. But when you start having more people, start servicing more locations and start to deal with multiple customer touch-points, the problems start to emerge. Managing this volume of work and resultant data becomes a huge issue and could prove to be disastrous in the long run. Most start-ups end-up losing a lot of ground only because of their inability to handle this growth. This is where processes come into play. Each component of the sales process right from lead generation to post-sale support needs to have a clearly defined and documented set of processes.

Internal processes need to be built to ensure optimal output with the smallest team possible. Don’t forget, the motto is still to conserve cash for use where it is most required. So smaller the team the better it is. But this same team would be able to handle scaling only with clear cut processes. Such processes are also required to bring in operational and fiscal discipline.

But the most important are the sales and support processes. Being customer-facing, these need to be tightly aligned with the customer’s requirements to ensure predictable business and a satisfied customer. Having already acquired a small set of early adopters, you would have understood what it takes to progress the customer from first meeting to closure. Breaking this into small stages, understanding the customer requirement at each stage and putting in pace proactive actions would help to bring in some predictability into the sales cycle and ensure steady progress of the sales process. This also includes having a well-defined process for pre-sales activities like product demos, presentations, proposal preparation, custom demos etc. All this will ensure low cost and time for customer acquisition.

As I mentioned, it is important to have processes for post-sale support. This starts with the customer on-boarding process, once the sale has been made. Starting from familiarization with customer environment to product delivery and smooth and successful implementation in the shortest time, a clear cut process for each of these activities will ensure a good beginning to a long term customer relationship. A happy customer not only helps to build credibility but can also be a source of future revenues thereby extending the LTV (Life Time Value) of the customer.

It is important that these processes are well thought through, documented and put into practice right from the beginning so that when you are ready to scale it would be a no-brainer and would not seem daunting.

The author, Srikanth Vasuraj, is a Business Consultant focused on Mentoring and Advising start-ups. He can be reached at +91-98454 78585 or srikanth@nodiva.co.in . For more information please visit www.nodiva.co.in .

Online classifieds – calling again

Hindu BusinessLine carried this interview of mine on online classifieds market. Online classifieds remains perhaps that most rewarding space thus far in the internet domain from an investment standpoint, on M&A (carwale, jobsahead), IPO (naukri, justdial) as well as continued companies getting to scale (matrimony, property, food). Surprisingly, it has not generated equivalent entrepreneurial interest, especially as some of the disruptions around location and mobility create new opportunities.

We have also been seeing a distinct evolution in classified products, around the following elements:

  • Quality of content – Traditionally, classified businesses have relied on the sellers putting up the content, without much support for authenticity of information. New classified businesses are innovating to improve quality of content
    - (a la Cartrade) – by building automation around content generation, through connectivity with ERP systems
    - (a la Zomato, Indiaproperty) – by making the content richer, including maps and audio visual content
    - (a la Bharatmatrimony) – by verifying 100% of the listings
  • Relevance of content – Traditionally, classified business have relied on search as a method of generating relevance of results. New classified businesses are using social graphs to
    - increase relevance by leveraging the social graph (a la Shine, Tripadvisor)
    - augment content from social graph to make content richer and relevant (a la Bharatmatrimony)
  • Actionability – Traditionally, users are left to their own device as far as responding to ads is concerned. New classified businesses are enabling immediate and always-on connect (a la justdial mobile/ premium)

Perhaps an area for entrepreneurs to dig in more purposefully.

Cold-calling is a necessity for start-ups. But how do you go about it?

Having worked hard to get that MVP (Minimum Value Product) in place, most start-ups struggle with getting those first set of reference customers that would help them validate their assumptions and scale their business. Most of the first-time entrepreneurs have not done any selling their entire life and are now expected to go out there and find customers. This is easier said than done. Given below is a brief step-by-step ‘How-to-do-it’ that could help you.

Step 1: Building the database

This post presumes that you have identified your target segments. Make a list of about 40 -50 names of companies from your target prospect base. You can achieve this by – (a) paying and availing a database. Many people advertise the same, but beware these are notorious for outdated and defunct data; (b) Use other databases like ‘Just Dial’ to get more accurate, industry-specific names; (c) You could also use LinkedIn to search and build your database. This is probably the most updated and accurate source of information. While building this list of prospects you should also know who your actual customer is – the CFO, the Marketing Head, the CEO or someone else.

Step 2: Validate the database

Make that first call to all the company board numbers to validate accuracy of person name, designation and contact details. You could use one of many reasons to wheedle out this information. One such reason could be “We are going to conduct a seminar and would like to invite (either the person by name or designation) and would appreciate it if you could please give me his/her email id, to send a request”. Try asking for the mobile number, but nine out of ten times you will not get it. But people are willing to share email id if the request appears genuine. That is a start to atleast reach out.

Step 3: Devise a Direct Mail campaign

It may not be advisable to straight away call a stranger and try asking for a meeting. Better to send out a mail first to establish that first contact and create awareness for yourself. Some important tips for building an email campaign:

Introduction Mail:

The idea is to ensure your mail does not get deleted as spam and is read by the person concerned.

  1. Please DO NOT send mails using a generic mail service like ‘Gmail’ or ‘Yahoo’ or some such service. It will get pushed to Spam. Register your domain and send it using your domain name.
  2. Have a subject line that will make the person open the mail. Please let it not be something like ‘A Solution to help you SAVE Money’ or some such corny line, which is a dead giveaway that this is spam. It will straight hit the recycle bin. I have found that a ‘Request for a Meeting’ normally intrigues people to atleast open the mail. To this you may add some specifics like ‘Request a Meeting – To discuss how you could reduce process steps to on-board a new employee’. Such a subject line also talks of possible, quantifiable benefits.
  3. Address the mail to the relevant person. A lot of people send such mails to the CEO, where it is sure to get discarded. Identify the relevant person for whom your product/solution could be of interest and address him by name, ‘Dear Mr. XYZ’, and not ‘Dear Sir’. Brings in a personal touch. I know I may be pointing out the obvious, but trust me I receive a lot of such mails with ‘Dear Sir’.
  4. The first line should definitely touch on the potential pain point, your solution, the benefits it can deliver and all this in not more than two or three lines. This is what will make the person read the rest of the mail. Eg. ‘Typically companies take anything between 6 – 18 hours to successfully on-board a new employee. Our (use your company name) solution, (give solution name) can enable the same in just 45 minutes through process automation’.  If this is addressed to either the HR Head or the CTO, you can rest assured he is going to read the rest of the mail.
  5. Next para should quickly list the key features and benefits.
  6. Thereafter a brief introduction to your company and lastly a Request for Meeting.
  7. MOST IMP: The entire mail should appear in one single window. That means the person should not need to scroll and can view your entire mail and your signature in one single view. The moment the reader feels the need to scroll, chances are the mail may not be read.

Follow-up Mail:

This mail should be sent 3 days after the introduction mail and should be a brief 3-4 liner referring to the earlier mail and a short reintroduction of your product as a reminder. The subject line can remain the same.

Step 4: First Call

This call should be made again 3 days after the follow-up mail. The critical factor here is your introduction pitch. In two sentences or in 30-40 seconds you should be able to introduce yourself, your product, what it does and the benefits that it can deliver. This is not easy and will need some practice. It would help to write this down to ensure the messaging is right. These first 30 – 40 seconds will determine if the person is going to give you another minute and thereafter hopefully a meeting. You screw up this elevator pitch and you may have lost an opportunity.

If you get a meeting on your first call you should be doing back flips. Most often you will be asked to call back and even then you may need to repeat the process a few times before you actually get that meeting. This is the hard part and most of us tend to give up. You may end up feeling frustrated, insulted, angry and disappointed. But don’t get discouraged. Remember the old saying, no pain … no gain. Think of the times when some sales person called you and how you reacted. So, this is absolutely normal. Afterall, you and your company are unknown entities to that person. Why should he entertain you? But, as with everything else in life, perseverance and developing a thick skin will go a long way.

All that I have related are based on my personal experience and I have benefited from the experience. This is a small attempt to share that experience with you and help you to develop that prospect list. Hope this helps.

The author, Srikanth Vasuraj, is a Business Consultant focused on Mentoring and Advising start-ups. He can be reached at +91-98454 78585 or srikanth@nodiva.co.in . For more information please visit www.nodiva.co.in .