New Podcast: “SMBs Get Lied to a Lot”

Gene Marks is a dynamo. Every morning he gets up at 5:00 to write on small businesses issues for Forbes, The Guardian, Inc., and other publications he contributes to regularly.

Then he heads off to run The Marks Group, a CRM reseller and consulting firm that serves a predominately SMB client base. So Gene has a variety of perspectives on small business software and technology. 

He writes about small business technology trends in his weekly column for Forbes magazine, as well as in The Guardian, and talks about small business issues in regular appearances on Fox, MSNBC and other outlets. 

He also lives it in his job, where he comes face to face with small businesses owners struggling to understand how to deploy new technology in their businesses. Gene has a front-row view of how the questions we ask at the Tech Adoption Index are playing out in real life. 

On What’s Wrong with SMB Software Sales

“A lot of my clients are not experts in what they are buying. So when they are dealing with the software vendors, they just try and sell them their bill of goods instead of consulting with them…..I miss that objectivity.”

On the Commoditization of Small Business Software

“The way I think of SMB software in 2018, 2019 is, if it is implemented the right way, it will get you where you want it to get you. It’s like there is a Ford Taurus, a Toyota Camry and a Honda Accord. They are all really great cars and they will get you to our destination. The problem I see with my clients is, they are not using all of the features.”

Is small-business software commoditized? Gene things it is, to a large degree. The bigger issue is small business owners are not taking advantage of the features software has to offer. 

On the “Romanticization” of Entrepreneurship

“People get romanticized into starting a business and they don’t have the skill set to do it. The best business owners I know are not emotionally attached to their businesses. They just want to make money, and they know how to buy something for a dollar and sell it for three. Passion is nice. But profits are more important.”

In this clip from our podcast with Gene Marks, we discuss why it’s better to go into business to make money than to start a “dream” business. 


On How the Cloud Has Made it so Much Easier to Start and Run a Business

“Can you imagine running a business in 1978 vs. 2018? You can’t even compare what you can do now. And it is all because of technology….There are literally millions of small business owners today who are running profitable businesses from their houses and apartments. At it is all because of the CRM software and Quickbooks and Shopify.”

You can listed to the full podcast here:

New Podcast: “No One Wants to Make the Wrong Decision”

New Podcast: “No One Wants to Make the Wrong Decision”

Our latest episode of the Above the Cloud podcast series features an interview with Mark Canon, a long time local search/SMB software exec who is currently chairman of Boomtime. Today when he isn’t creating art at his New Mexico studio Mark is thinking deeply about how to master B2B sales in an era where sales cycles keep getting longer.

I conducted this interview with Mark late in the day on November 7 at our Tech Adoption Summit event in San Francisco. What emerged from this roughly 30-minute conversation was a cogent diagnosis of what is wrong with B2B sales today and a roadmap for how to break out of it. Much of what Mark talks about in the interview has been applied to mid-market businesses, but he believes many of the lessons can be applied to smaller businesses. This podcast is a must for anyone who likes to geek out on sales methodology.

There were a few core tenets to Canon’s thesis on how to fix B2B sales. One is that sales cycles are B2B being stretched (a fact not in dispute) and the causes are insufficient freely available information to make good decisions, fragmented decision-making, and risk aversion. Hence a longer and more complex sales cycle.

Another element to his thesis is that all B2B software in any given category is that product differentiation is rare, and when it occurs is very short lived because developers all have access to the same toolkit.

The way out, Canon argues, is to build credibility with B2B prospects by helping them build the knowledge they need to make a better decision, and to move them down the sales funnel gradually to close through a series of micro-commitments (opening an email, downloading a white paper, taking a call, etc.)

The bottom line is to “de-risk” software purchase decisions for B2B buyers. Ultimately, Canon argues this process can actually shorten B2B selling cycles.

Here are a few excerpts from the interview at the Tech Adoption Summit.

On the Broken B2B Sales Process

There are three problems facing B2B marketers. There is not enough time to tell their story. And [prospects] don’t have enough time to listen to it, so they never tell it. The second problem is [software] products are not differentiated. And to the extent that differentiation exists, modern software development technology will allow you to bridge the gap within six months. The third challenge is a lack of appreciation for risk mitigation aspect of selling in B2B. Businesses are doing self-research, which is incomplete. There are more decision makers involved, and sales cycles are getting much longer. No one wants to make the wrong decision [because the riks of a bad decision is so high].

On the Freemium Model

The strength of the freemium model is that there is a relatively low cost to a mistake. It is one of the reasons the model has been successful.

On How to Sell to B2B Businesses

One thing you need to understand about these businesses — whether it’s an SMB or a $50 million B2B business — is that essentially they don’t trust anyone. So you have to put a human face on your business as quickly as you can, so they can identify with you. And you have to create some kind of transparency statement so they understand how you do business. Or else they will walk away.

You can listen to the complete interview with Canon here on Episode 12 of Above the Cloud.

New Podcast: “Selling to SMBs is Hard” Featuring Ted Paff

New Podcast: “Selling to SMBs is Hard” Featuring Ted Paff

Our latest podcast is a combination clinic and therapy session for anyone who has ever tried to build software products for small businesses. At the recent Tech Adoption Summit in San Francisco, my colleague Neal Polachek interviewed Ted Paff, a former VC turned entrepreneur who founded Customer Lobby in 2007 and sold it in 2017. Today when Ted isn’t sharing war stories at conferences, he’s more likely to be found on a beach with his surfboard.

The original idea for Customer Lobby was to “digitize an ephemeral asset, which is customer goodwill.” In other words, helping SMBs generate customer reviews. Today, Customer Lobby, now an EverCommmerce company, uses AI to take an SMB’s customer data and analyze it for signals to do more effective marketing.

The 30-plus minute interview with Ted is a must listen for anyone who has built, is building, or hopes to build products for the small business market. Ted offers an extremely candid take on how many of his decisions look in hindsight. And he also gives us a glimpse into the emotional toll that running a start-up exacts from entrepreneurs and the intensity of living that reality where what you are building just has to work. Living “failure is not an option” day in and day out takes its toll.

“It’s hard. I don’t even know where to start. It was a long road. I kept looking for a panacea. A silver bullet. And there was none,” Ted said, summarizing his journey building Customer Lobby.

The interview offers much more than catharsis. Neal and Ted got into a serious conversation about the hard lessons Ted learned building an SMB software business. Here are some highlights.

On the Freemium Model 

Earlier in the conference, ThriveHive CMO Adam Blake made a detailed case for building a business with freemium products. Neal and Ted picked up on that thread in their conversation.

“There is a truism that you need to view a freemium product with the same degree of passion as a paid product. You just have to view it that way. Otherwise, it just doesn’t really work.”

On Product Pricing 

“Almost everyone in this marketplace is radically underpricing their products. This market is a lot less price sensitive than people think it is. As an example, when we sold our company, the new acquirer raised prices by 40 percent and it dropped right to the bottom line.”

On Customer Support

“When I initially launched, I was so cheap with our support. Later I realized I needed to build in enough margin to enable a really wonderful experience for the customers. And that is all a function of price.”

On a Future without Salespeople 

“No one wants to talk to a sales person until they do. And when they do, they want to talk to them right now. They are not kidding. There is a high value attached to that. So there is a question of where nurture drops off and sales kicks in. I get that. But that magic ARPU or MRR is more a function of what type of sales one actually want to roll out.”

On Product-Market Fit

“Product market fit wasn’t an a-ha moment for us. It was a series of micro-learning lessons. Like, ‘Oh, this audience is interested in buying something that solves this pain point.’ When we started our initial product was around helping businesses generate customer reviews. At the time, that was anathema to everyone’s thinking. Plumbers would say ‘Isn’t that for movies and restaurants? Why would a plumber want customer reviews?’ For a long time, it was just rolling a boulder uphill. it just kept getting a little easier. There was no step function for us.”

There is much more to the discussion. You can listen to the full podcast here:

Thanks again to the sponsors of Above the Cloud and the Tech Adoption Index.

 

New Podcast: “Stop Talking About Your Product”

New Podcast: “Stop Talking About Your Product”

Our latest episode of Above the Cloud features an interview with Costantino Caroppo, a former CMO at the Italian digital agency Axelero and the self-described “father of the Italian IYP” for launching Seat Pagine Gialle’s first digital directories while an executive there. Seat Pagine Gialle is now part of Italiaonline.

A common thread in Costantino’s work at Axelero and at his new start-up Hub-U (which Costantino says will launch later this month) is his view that digital marketing platforms for SMBs do not need to build anything. The can simply integrate existing applications. “There is no need to reinvent the wheel,” he says. And the sales process is much more about service than initial sales. Costantino and talked about this new model for selling to small businesses over coffee outdoors at the Sofitel hotel in Hua Hin, Thailand, where we were both attending the recent AsiaComm conference. This life is hard at times.

Some key takeaways from my conversation with Costantino:

  • Don’t talk about your products in an initial sales conversation. Find out what matters to the small business and then apply solutions to those pain points.
  • After sale support is a potential game changer. The right process of guided marketing can product “natural upsell” in which the client asks for additional services based on the information they are being provided.
  • His vision for guided upsell is about human interaction today, but over time is increasingly automated and powered by AI.
  • Helping SMBs generate leads without helping them to better manage their customer base just drives up the cost of sales without improving customer lifetime value.
  • In his new start-up, Costantino is targeting software companies, banks, and telecoms more than media companies as likely channel partners.

“These channels [banks, telecoms, software companies] make sense from a synergy standpoint with respect to what they already sell to their customers,” Costantino explains. “A bank, for example, helps a small business make money through a point of sale device or some financial service management, credit management. If you connect a point of sale device to a CRM and record sales activities and relate them to a database of customers you enrich the database of customers. And based on that, you are able to direct marketing activities in a much smarter way than before.”

The full interview with Costantino begins at the 3:43 mark.

Here is Costantino presenting on a similar topic at the recent Asia Comm conference in Hua Hin, Thailand.

As always, we appreciate the support of our Tech Adoption Index and Above the Cloud sponsors.