[VIDEO] How Product Innovation Can Grow Your Business

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how it is critical not to take your eye off the ball in terms of product development.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in setting your own product development strategies.  As you will learn, you need to constantly be innovating and iterating to protect your future revenues against competitors.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Red Rocket's Best Startups of 2022

 

Red Rocket gets introduced to hundreds of startups each year, in the normal course of doing business, or via our involvement with various startup groups or events.  We wanted to honor the best of these startups that we met in 2022, in Red Rocket's 11th Annual "Best Startups of the Year".  This list is not intended to be an all-encompassing best startups list, as there are many additional great startups that we are not personally exposed to each year.  And, this list is not intended to be only for businesses that launched in 2022, it is open to startups of any age, that they or their advisors had some personal interaction with us in the last 12 months.  The business simply needed to have a good idea, good team or good traction, that caught our attention.  Congrats to you all!!

THE BEST STARTUPS OF 2022 (in alphabetical order):

Alpharank (CEO, Jay Rosenblatt) - B2B optimize online sales for banks

Alpine-X (CEO, John Emery) - B2C indoor snowsports resorts

Automatic (CEO, Eric Burney) - B2C used car finance

Contino (CEO, Robert Orr) - B2B2C urethral insert for bladder control

CRS (CEO, Marco Buhlmann) - B2B append credit data to approve card charges

Cusa (CEO, Jim Lamancusa) - B2C instant coffees and teas for people on the go

Duradry (CEO, Jack Benzaquen) - B2C antiperspirant for excess sweating

Moxey (CEO, Charlie Davis) - B2C a bartering currency

Pencil One (CEO, Tong Jiao) - B2B ecommerce photography production

Shortlist (CEO, Jeff Hyman) - B2B prescreened hiring candidates in days, not months

Tribucha (CEO, Mark Mullins) - B2C shelf stable, great tasting kombucha

TVDataNow (CEO, John Hamilton) - B2B CTV advertising measurement

VIZZR (CEO, Jian Wei) - B2B field service management platform from Ford and Salesforce

And, don't forget to check out the 2012 winners, 2013 winners, 2014 winners, 2015 winners, 2016 winners, 2017 winners, 2018 winners, 2019 winners, 2020 winners, and 2021 winners, many of whom continue to be doing great things.


Congratulations to you all!!  Keep up the good work.


For future posts, please follow us at: @RedRocketVC

Lesson #348: Great Resignation? Quiet Quitting? Look in the Mirror for Answers!

 The last year has introduced us to a bunch of new concepts in the post-COVID workforce.  The first was the Great Resignation, with an estimated 20% of workers planning to quit their jobs in 2022.  And, most recently, Quiet Quitting, where workers don’t actually quit their jobs, but instead, put in the bare minimum of work required to keep their employers happy, without putting in a minute of extra effort.  To me, these are both problems with the employers, not the employees.  Because if employees were actually happy, respected and engaged in their jobs, they wouldn’t feel the need to quit their jobs, either outright or in mindset while still employed.  This post will help us diagnose if you have any problems that need fixing in your business, to help stem this tide.

A Couple Unhappy Workforces as a Case Study

Let’s look at a couple industries where quitting seems to be at an all-time high: K-12 education and restaurants.  These are two industries I know well, with my wife a 2^nd grade teacher and me owning a business serving the restaurant industry.  In both of these industries, it is pretty clear to me why people are quitting; they are being asked to work their tails off with very little reward, where it is so much easier for them to switch industries and make materially more money elsewhere.  Not to mention how dysfunctional these types of businesses can be, without a lot of ways for their new ideas to be heard or acted upon, where businesses are being mismanaged, oftentimes with a lot of bureaucracy.  Why would anyone want to work in that environment?  Anyone that does is because they feel they have no other options based on their skillsets or because it is simply their passion project giving back to their communities, without making compensation or job satisfaction their ultimate drivers.  Which is not a great position to be in, for the employee or the employer.

Reality Check

So, how do we fix this?  We start with common sense that 20% of workers are not resigning the workforce overall, they are resigning YOU!!  There must be something you are doing that they are unhappy with that needs to be resolved.  That could be something like low compensation levels, their mundane day-to-day tasks, your company culture, lack of upward career mobility, a bad boss, lack of job flexibility or whatever.  So, if you are experiencing high levels of employee turnover, it is time to look in the mirror and start auditing everything you are doing, with a post-COVID mindset of what employees are looking for.  Let’s dig into that a little bit deeper.

Study Compensation Levels

Going back to our case study above, can restaurant workers really make a living wage at $15 per hour?  That is only $30,000 per year, in a world where inflation is off the charts.  After tax, that is only around $2,000 per month.  Let’s say half of that goes to covering their rent, and that leaves the other half, or $33 per day, to cover all their other living expenses.  That math simply doesn’t work.  Not to mention, they have to be on the job in person, when all their other friends are getting more flexible jobs that allow them to work from home.

And, the same thing for the teachers.  They are teaching our kids and setting up the future of our country.  It disgusts me that movie stars and sports athletes are making $25MM per year, and teachers’ starting pay is around $50,000 for doing a TON of work, dealing with hostile parents, and working in dysfunctional workplaces where the rules keep changing each year.  Enough already, teachers need to be better respected and a material bump in pay to justify those working conditions.  We as a society need to better value the roles they are playing, and all chip in with slightly higher real estate tax bills.

So, what does this mean for you?  Stop thinking of your industry in a vacuum, and stop using historical pay levels as a baseline benchmark.  You may need a drastic salary increase to retain and attract new talent in today’s market.  And, employees will seek out work in other industries, if they are unhappy with the compensation levels in your business or industry.  So, when studying average pay by role, do so across industries.  And, I didn’t talk about studying benefits packages here, but you should do that, as well, to make sure you are in line with the market.  A good benefits management company can help you benchmark yourself versus other employers.

If you determine you cannot profitably afford market rate salary increases, you may have a material problem on your hands.  But, hopefully, raising your prices, to better afford market rate salaries, will help you fund these increases.  God knows my restaurant bills have been going way up, as restaurants are paying their staffs more in an effort to try to retain them.  But, if price increases are not digestible by your customers, you may need to face the hard fact your business model may be broken, and may not survive without a material change in the model metrics.

Study Job Flexibility

Thanks to COVID, everyone prefers a more flexible job environment, starting with the option to work from home.   So, don’t be stuck in the Stone Age, requiring everyone to be in the office every day.  That will allow the staff more flexibility to save on commuting time, parking costs, gas costs, car costs, etc. and enables them to be closer to their families for taking care of their kids or attending their local school events or other appointments they may have.  You don’t need to “see them”, to know if they are doing a good job.  You will see their success in the data coming from their work (e.g., sales results, tasks completed).

Study Company Culture

If your staff are grumbling behind your back that they work in a “toxic work environment”, you have a major problem on your hands, and need to “plug the hole” before the whole “bucket” drains empty.  Survey your staff, either directly or through an HR consultant.  Ask what they like and don’t like about the business, and then lean into your strengths and repair your weaknesses.  Be sure to calculate your net promoter score of your employees, not just your customers, and shoot to keep that number at 8.5/10 or higher.

Study Management

You may love one of your managers, sucking up to you as their boss, but their direct reporting employees may hate them.  Be sure to complete 360 degree reviews of your employees, so they have a chance to speak openly about their boss, at the same time their performance is being reviewed.   Nothing will get a person looking for the door faster than being micromanaged, disrespected or verbally abused by a bad manager.  So, you may need to part with someone you like, for the greater good.

Study Career Paths

People want to stay in companies where they can see upward mobility in their careers.  They will give you a couple years in their current role, but what comes next?   Is your company growing, to create new layers of management for them to grow into?  If so, great.  But, if not, the employees may get bored and decide to find a new challenge.  So, put plans in place, for each role of the company, where they can easily get visibility into how their responsibilities and compensation will increase over time, to give them “hooks” to want to stay working with you over the long run.

Study Day-to-Day Tasks

Nobody wants to work in a job they don’t enjoy.  So, ask yourself: would you enjoy that job?  If not, figure out what it would take to make that job more enjoyable.  If it is eight hours a day of mundane, brain numbing tasks, figure out how best to make the role more stimulating—maybe sharing mundane tasks across a broader team that is doing more strategic tasks for most of their work.

Closing Thoughts

So, this concept of the Great Resignation and Quit Quitting is really hogwash to me, as the focus is on the employees, not the employers.  These people need to work to pay their bills.  You just need to figure out how they will want to work for YOU, and not be looking for the door looking to work for someone else that better values, respects, challenges and motivates them.  After doing this internal self-study, if the mirror is not broken, keep up the great work.  If you are staring at a bunch of broken glass, it is time to start fresh and rethink everything you are doing.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] How to Ensure Your Startup Launch Is Successful

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to to ensure your startup launch is successful.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in setting your own goals, objectives and initiatives for the next year.  As you will learn, if you can't kill your own startup, then it most likely is defensible enough that your competitors won't be able to kill it either.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] Tips for Developing an Effective Growth Plan

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to develop an effective growth plan for your business.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in setting your own goals, objectives and initiatives for the next year.  As you will learn, it is all about the math!!  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Are You a Victim of Quiet Quitting? Look in the Mirror for Answers.

 

The past year brought about several post-Covid workforce trends. The first was the Great Resignation, with an estimated 20% of workers planning to quit their jobs in 2022. Most recently the topic of "quiet quitting" has made headlines — it's a concept popularized on TikTok wherein employees do their work but don't go above and beyond.  To me, it's clear that these are both problems with the employers, not the employees. If employees were happy, respected and engaged in their jobs, they wouldn't feel the need to quit their jobs, either outright or in mindset while still employed. Here's how to diagnose if you have any problems that need fixing in your business and stem the tide of resignations.

Read the rest of this post in Entrepreneur.  

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #347: Do Not Apply a 'One-Size-Fits-All' Approach to Your Marketing

 

A common mistake that many companies make is using a “one-size-fits-all” approach to its marketing efforts.  Said another way, the company comes up with one marketing strategy, uses mass marketing techniques and the same messaging to everyone that sees its advertising.  Yes, that is a simple approach, and saves you time and efforts required to customize your messaging to specific sub-audiences.  But, if you are looking to maximize your return on marketing spend, that additional upfront investment in building customer personas (sub-audiences) and a customer journey flow (from upper funnel to lower funnel) will pay back in spades.  So, don’t be a penny wise in the short run and pound foolish for the long run.  The more you personalize your messaging to the exact target, and where they are in the buying process, the more it will help you put your marketing efforts on steroids.  This post will help you learn how to do exactly that.

What is a Customer Persona?

A customer persona is the sub-audiences of users that are buying your product or service.   If you are a consumer business, maybe that is men vs. women buyers, or older vs. younger buyers, or which target products they are most interested in (e.g., coffee drinkers vs. tea drinkers).  If you are a B2B business, maybe that is customers from one industry or another, or buyers at different levels of the organization (e.g., executives vs. lower level managers) or different size of companies (e.g., enterprise vs. small businesses).  Every single one of these sub-audiences, should receive marketing messages from you that are directly relevant to them.

What is the Customer Journey?

The customer journey is the path in which a customer researches, considers and ultimately purchases products or services.  A customer that is researching to figure out what it needs is typically upper funnel, a customer that knows what it wants and is considering various vendors or solutions is middle funnel, and a customer that is price shopping and ready to pull the trigger is lower funnel.   Why does that matter?  Your marketing messaging should be tailored to where they are in their customer journey.

Someone that is upper funnel needs to know why they need a solution in the first place, someone that is middle funnel needs to know your product is better than others in the market, and someone that is lower funnel may be stimulated by a promotional offer to save 10% if they purchase by the end of the month.  

And, the marketing tools you use to communicate with them will be different—from mass marketing tactics (e.g., TV, radio, print, search engines) for upper funnel down to one-on-one marketing tactics (e.g., emails, phone calls) for the lower funnel.  So knowing your customer journey and which media are best to communicate with your targets is a critical component to personalizing your marketing messaging.

What does Personalizing Marketing Actually Mean?

Personalizing your marketing means you need different marketing creatives for each sub-audience.  Let’s say you have three core personas and three stages of the marketing funnel, that would be a total of nine different creatives that need to be created (not just one).  And, in those creatives, use images and copy that actually will resonate with that sub-audience.  So, if speaking to men, use male models in your creatives.  If speaking to older people, put older people in your creatives.  If pushing a specific industry use case, speak to that industry expertise in your creatives.  If speaking to executives, promote the strategic benefits of your product, vs. the more tactical functionalities that would be better promoted to lower level employees.   You get the point—don’t spray and pray.  Be laser focused with your targeting and messaging, and good things should happen to accelerating your sales.

What Can You Expect to Happen from Personalization?

With every layer of personalization, you can expect to increase your conversion rate, and ultimately your sales.  So, as an example, let’s say the one-size-fits-all approach allows you to convert 10% of your leads.  Layering on the customer personas may allow you to convert 20% of your leads.  And further layering on the customer journey messaging may allow you to convert 30% of your leads.  The better you sharpen your pencil, the higher your resulting revenues will be.  Any good marketing agency can help you here.

Tracking Is Critical

Setting up the customer personas, journey and creatives is only part of the exercise.  The other part is tracking the results from each of those sub-audiences.  So, when setting up your campaigns, tracking URLs or other conversion metrics, make sure the appropriate tagging and tracking is in place, so that your CRM can easily see how the different personas are performing at driving sales.  You may learn that each persona behaves equally the same, and deserves equal attention.  Or, you may learn certain personas are outperforming others, and needs your oversized attention and budget, redirecting efforts away from your other underperforming personas.  So, in all cases, the devil is in the details, and you need to be tracking and optimizing everything.

Closing Thoughts

The concepts presented in this post are “table stakes” in the marketing world, and it amazes me how many early stage companies have absolutely no clue here.  If you are not doing it, you are potentially wasting a lot of your marketing dollars.  Or at a minimum, not driving an ROI as high as you ultimately should be.   So, either hire a strong marketing team, or engage a strong marketing agency, for your business.  They can help lay the groundwork here, and ultimately tee you up for maximum marketing success.   Good luck!!

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] How to Develop an Exit Plan for Your Business

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to develop a flawless exit plan for your business  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in getting your businesses sold in a timely fashion and at the valuations you are hoping for.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #346: How to Manage a Virtual Team

I have previously written about how COVID has changed the workplace forever.  Before COVID, companies were not fans of virtual employees, and thought they needed to be in one place for them to be managed and contributing as part of the team.  But, once virtual work became required in the wake of COVID, they quickly learned “hey, the staff seems to be doing just fine working remotely”, with revenues still coming in as normal.  Which was great for the workers looking for the flexibility of working from home, and now preferring to  work virtually going forward.  The real problem is: how do you truly manage a distributed workforce over the long run and still build your desired team performance and culture.  This post will help you learn exactly how to do that.

Learn What Your Team’s Desires Are

This does not need to be a one size fits all situation for each of your staff members.  Some people love virtual work (e.g., not commuting, working in pajamas).  And, some people prefer working in the office (e.g., break from the kids, socializing with friends).  So, the key is learning which path your team members prefer, working virtually or working on-site.  It is important everybody’s needs and goals are aligned for the long term, for it to be successful for all parties.

Change Your Recruiting Approach

If you prefer to evolve to a virtual team for the long run, you will need to change your recruitment approach.  Your job descriptions need to clearly be speaking to a virtual office and remote team.  That will weed out the candidates that don’t want to be working remotely.  And, on the flipside, many candidates are now actively seeking out remote positions, as many of their current employers have reverted back to in-office work, and they want to keep the virtual work they were doing.  Many are willing to even consider a pay cut, to enable that flexibility for them.

You will also need to figure out where the employees are geographically located.  Some companies have said the employee can be located anywhere in the world, if they have the right skills.  Which opens up a lot cheaper talent pools in Eastern Europe and Asia.  But, others have tried to keep hiring in one central location, so that it would be easier to get the team together in person, whenever that may be needed (e.g., for annual meetings, weekly happy hours, easier training).  If you are a small company, try to keep it centralized, especially to simply payroll tax filings in one state.  Once you are a big company, you will need to throw out a bigger net to find new workers from a broader geographic region.

Provide In-Person Options for Those That Want It

May companies are offering a hybrid approach.  Let employees come to the office, when and if they ever want to.  The result of that is losing the 10,000 square foot office with dedicated desks for each worker, and instead, replace that with a 5,000 square foot office with shared work-stations, similar to what you would see in a shared office workspace, like WeWork, where employees would reserve a desk or meeting room for the day, as needed.  This is sometimes referred to as a hoteling model.  The good news:  your home office rent costs just got cut in half!!

Replicate or Keep In-Person Activities for Team Building

Restaurant Furniture Plus engages a virtual work force that is largely based in the Cleveland, Ohio area.  They recently launched a new fun committee which plans monthly in-person events in the area (e.g., happy hours, bowling parties).  This helps to break the monotony and loneliness that comes from working in your home, and does a great job of reinforcing the fact they are all part of the team.  Without events like this, “out of sight, out of mind” can set in, which doesn’t help with team building.  

If you are truly a virtual business with staff located across the country, in person events becomes much harder and cost prohibitive, so you will need to figure out how to replicate the above with “virtual events”.  In the wake of COVID, several new service providers are offering virtual team building events (e.g., trivia nights, murder mystery parties), which you may want to consider for your business.

Managing and Cheerleading Becomes Twice as Hard

As a serial entrepreneur of in-person companies, I loved walking up and down the aisles, seeing what people are working on, patting staff on the back, taking them out to lunch, or whatever.  You lose all of that with a virtual company, but those things are still equally important to your success.  So make sure you have good analytical reports that can help you see which employees are doing well vs. goal, and which ones are struggling.  Provide compliments and employee awards virtually.  Set up virtual lunches with your team to talk about anything other than work.  Etc.

Culture Building Becomes Twice as Hard

It’s hard to build a “one for all, and all for one” culture when you are never seeing your peers in person.  Worse yet, it is much easier to hide, and ignore having difficult conversations, when someone cannot easily tap you on the shoulder and take you into the conference room to talk about it.  You still want your staff to become loyal to the company and have their peers’ backs.  So, you need to keep emphasizing your team’s cultural values, and make sure all staff are living by those same standards, even while working from home.

Avoid “Zoom Fatigue”

In a virtual company, the only way to have group meetings is by web video (e.g., via Zoom, Microsoft Teams or Google Meet).  The problem with web video:  it can be tiring, hurting your eyes, and it can be easy to tune them out, with cameras turned off, or you seeing staff doing other work while the meeting is in progress.  Only schedule meetings that are absolutely needed, keeping them to a minimum.  And, let the team know, when you do have them, they are important, and they need to be focused on.

Closing Thoughts

I actually love the move to virtual workforces.  I think it will make businesses materially more efficient, saving them from spending on unnecessary costs.  And, it will make most staff members materially happier with the increased flexibility that comes with working from home.  But, for it to be a success, it is important you follow the high level guidance above.  Having run a virtual business for the last four years, it certainly has presented some challenges.  But, we have learned from them, optimized for them and has resulted in us scaling our business to new heights, with an engaged and loyal team.  Good luck replicating this in your own businesses.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #345: Swap 'I' for 'We' in All Communications

The words you use in all of your work related communications can  have a major impact on how others perceive you, as a leader.  And, as entrepreneurs, it is really easy to put yourself in the middle of it all, on a pedestal, as the person that founded the company.  But, as you all should know by now, you are not building your business by yourself, and credit needs to be shared with all, to keep everyone feeling respected and motivated in their day-to-day efforts as part of the company.  That all starts with removing the word "I" from your vocabulary, effective immediately.

Defining "I" vs. "We"

According to the Merriam-Webster Dictionary, the word "I" is speaking to one's SELF, possessing a personal INDIVIDUALITY.  And, the same source, defines the word "We" as "a GROUP that includes me".  Notice the stark difference between the two:  using the word "I" makes it sounds like you are building your business by yourself, and using the word "We" clearly tells others that you are part of team, that is equally invested in building your company's success.  

What Does that Means For Your Communications?

Unless you are a solopreneur working by yourself, ditch the word "I".  And, even then, you are most likely working with other outside partners (e.g., investors, bankers, accountants, lawyers, contractors, agencies) in some capacity.  And, they too want to feel like they are doing their part to participate in your success.  So, you too need to swap "I" for "We" when working with anyone that is involved with your business.

What Communications Are We Talking About?

ALL communications need to be amended to remove the word "I".  Verbal conversations by phone, written communications by email, corporate materials that describe the efforts of the business . . . basically everything.  You should set up a "swear jar", that every time you communicate with the word "I", you have to put a dollar in the jar.  For some of you, you may have just found your capital source for your next fundraising needs!!

What is the Result?

Making this change will have a lasting impact on your team.  No longer will you be at risk of being perceived as an out-of-touch egomaniac.  Instead, you will better motivate your team, instill a sense of self-worth into your employees committed to the company's success, and promote long term loyalty to your business.

Who am I Speaking To?

You need to look in the mirror, as I am speaking to YOU.   Take a look at your last few emails written to your team.  Do you see the word "I" anywhere in there?  You most likely do!!  Stop doing that!!  Before you send out your next corporate communication, proof-read it first to make sure the word "I" is nowhere to be found.

Closing Thoughts

For entrepreneurs that have been at the center of the worlds for years on end, this will be a really hard bad habit to break.  But, if you are religious about removing the word "I" from your vocabulary, your team will take notice, appreciate you including them in your COLLECTIVE success (not your INDIVIDUAL success) and want to work hard WITH you (not FOR you), as a leader that knows the importance your team has in building THE company (not YOUR company).  As you can hopefully see now, the words you use with your team really matter.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] How to Protect Your Startup From Copycat Competitors

 

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to build defensible barriers to entry for your business.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in developing your own "competitive moats".  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] Should Your Business Have a Board of Directors?

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about boards of directors, advisory boards and how best to structure those.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in developing your own leadership boards.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] Why Your Business Needs a Strategic Plan

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about the strategic planning process and why it is important for your business.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in developing your own growth strategies.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Don't Apply a 'One-Size-Fits-All' Approach to Your Marketing

No two individuals are the same. So why shotgun approach your marketing efforts with a "one-size-fits-all" marketing approach. You need to figure out the key personas you are targeting, and where they are in their customer journey, and tailor your messaging accordingly, for maximum success. This article will teach you how.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #344: The Lucky 7 Steps to Channel Sales Success

More often than not, most growing business typically use sales and marketing efforts to drive their revenues.  Marketing basically uses advertising and other techniques to bring leads into the business.  And, your sales team either closes the leads handed to them by the marketing department (inbound sales), or they actively hunt new end-clients down with prospecting efforts (outbound sales).  But, there is another path that most companies don’t pursue, which could be the most effective for quickly scaling your revenues, and that is channel sales.  This post will help you understand what channel sales is, and how best to set up your channel sales efforts for maximum success.

What is Channel Sales?

Channel sales is identifying third party companies that have large quantities of your target customers to become a reseller of your product or service, typically in exchange for some revenue share.  For example, let’s say you are a software business that helps manage a company’s financials.  Instead of calling into target companies one-at-a-time with your outbound sales team, let’s stay you reach out to a consulting firm that has hundreds of CFO relationships.  You convince them on the value of your software and how it will help their clients’ businesses and drive incremental revenues for the partner, and their sales team takes your software to market for you.  So, think of it is one-to-many selling, as opposed to one-to-one selling, which should result in a much faster go-to-market strategy and scaling revenues more quickly than you typically could on your own.  

Best Products for Channel Sales

Honestly, most any product or service could be set up for channel sales success.  In the B2C world, let’s say you are a consumer product.  Instead of calling into the end retailers directly, build a channel sales effort around selling into key distributors nationwide that already have solid relationships with the end retailers you want to be distributed through.  Or, in the B2B world, you just need to find potential partners that have large target audiences that match your product or service.  That could be selling through trade associations, consulting firms, value added resellers, or whoever else would make sense. 

Are you intrigued at this point?  Good, you should be, as channel sales is like giving your revenue growth a steroid injection.  If you are now interested in learning how best to set up your own channel sales program, follow these lucky 7 steps to success:

1.  Set Desired Partner Criteria

The first thing you need to do is define what a good partner looks like to you, as trust me, not all partners are created equal.  Setting some high level categories of potential partners and a questionnaire of key questions you want them to answer to “qualify” as being a good partner for you.  Maybe they need to be of a certain revenue or customer size?  Or focused on a potential industry?  Or have happy client references?  Or have known demand for your product or service?  Or a desire to create a new revenue stream for themselves using your product or service?  And, are willing to put some sales and marketing muscle behind the launch of the efforts together?  Or, all of the above!  A good channel partner program must be structured in a win-win way, so both sides are invested in its success and are economically incentivized to see it succeed.

As part of this, you will need to figure out how to structure the program in a way that the channel partners are not duplicating efforts, calling into the same companies or regions.  This is often done by giving the channel partner a particular region of focus (e.g., 50 different partners selling into 50 different U.S. states).  But, before giving anyone exclusivity, make them earn it in their first year.  Give them a sales target to shoot for to earn exclusivity in their region, as you won’t know if they are a good channel partner driving new clients for you, until months after the relationship kicks off.  So, don’t get blinded during their sales pitch to you as a good partner, unless you are 100% confident they are a trusted business in their space.

2.  Partner Prospecting List Creation

Now that you have set the criteria, you need to build a target list of companies to reach out to that you feel meet that criteria.  Let’s say you want to reach out to big consulting firms as channel partners, you can find lists of the largest consulting firms online.  That will give you the company name, but you need to find the right person to sell this idea to.  The bigger the idea, the higher up in the company you pitch it.  If your product or service can become a billion-dollar seller for their organization, it might be time to pitch the CEO or CFO on that idea.  Or, if it is more tactical, find an internal champion at that firm to help you sell it into their organization.  Maybe you want their head of a particular industry group that would most understand your solution.  Or, maybe they have a head of business development that you can pitch, and they will tell you the most logical person at their company most likely to be your primary relationship person.  Anyway, this phase is all about buildings lists of companies, individuals and their contact information.

3.  Selling & Acquiring Partners

Just as you would sell an end-customer, you will need to sell the channel partner.  Expect this time, in addition to pitching your product or service, it is more important you pitch the benefits of the channel partnership to the partner.  You will need to emphasize how much money they will make from the relationship (e.g., from a 20% revenue share), and what your plan is to support them and their customers going forward.  So, make sure you have a good pitch deck for this purpose, a good calling and follow up strategy, and a draft of the partner agreement detailing everyone’s roles and responsibilities here.  It is particularly important to detail how they plan to bring sales and marketing support, as your product or service won’t sell itself.

4.  Onboarding Partners

Getting a contract to close is only half the battle; now comes the hard part.  The partner is going to need to be onboarded to help make them successful.  This includes having training materials and setting up a training program on your products and desired process.  The point here, like in anything, you will need to invest in the partner in order to achieve the desired outcome of success.  It’s much more than simply signing the contract.

5.  Partner Marketing & Support

Now comes their hard part, they are going to have to put effort into sales and marketing, making their customers aware of your new product or service.  The promotional plan will have been detailed in the agreement, and now is the time to execute that plan.  But, you will need to assist your channel partners.  They will need example product pitch decks, email/phone scripts, etc.  Anything you would give your inside sales team, you will need to give your outside channel partners, for them to be successful.  And, you will need to provide them a “hot desk” contact number, in case any of their clients or salespeople have any questions best answered by you.  So, support your channel partners, no different than you would support your in-house sales team.

6.  Revenue Sharing & Reporting

Assuming the channel partners are successful in finding you customers, now we need to pay them their agreed upon revenue share.  So, you will need a clear process to attribute sales from a particular partner.  If you are an online business, oftentimes, that can be done with affiliate tracking software; you give each partner a unique URL to promote, and then if anything closes, they get credit for the sale.  If you are an offline business, it is a more manual process.  That could be the partner gets credit for each lead they send you in your CRM.  Or if they are promoting your product to their customers, they give their customer a unique coupon code or reference ID number they give you at the time of the sale.  But, these revenue share calculations should be done monthly, and reported and paid to the partner at such time.  The sooner they see money flowing their way, the more they will want to promote your products or service.  So, make sure there is a clear process for tracking, reporting and paying partner revenues.

7.  Partner Nurturing & Upselling

You can’t think of this process as “one time and done”.  It is perpetual and recurring, quarter after quarter.  You should set up quarterly business reviews with your partners to make sure everyone has clear goals to shoot for and can report progress thereto.  And, your channel sales manager needs to reach out to partners to stay fresh in their minds and keep them abreast of new products or services that you may have added since the partnership started, so the partner can upsell those products to their clients, as well.  Your channel sales manager needs to manage these partner relationships, no different your sales executives manage your direct customer relationships.

Channel Sales Pitfalls

The one downside of channel partners—they will never love your business as well as you love your own business.  You will never be their sole and #1 priority.  They will obviously bias their own sales efforts over selling your products, and you may be one of many products or services that they are reselling.  That is why it is so important you do your homework upfront, to make sure this is going to be a clear win-win for both parties, so that each party are willing to invest in its success.

Closing Thoughts

Hopefully, you now have a new idea on how best to take your product to market, and channel sales may be that winning formula for your business.  Channel sales won’t replace your internal efforts, but a well-designed channel sales program will certainly augment and accelerate your stand-alone efforts.  If you have any questions, don’t hesitate to reach out.  Good luck!

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] What Makes a CEO Fundable to Investors?

 

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about what venture capital investors are looking for in the CEOs of the companies they invest in.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in sharpening your own skills to impress prospective investors.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] How to Start Selling 'Wisdom' Instead of 'Widgets'

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to selling intelligence from data collected from your tools (e.g., Wisdom) can lead to higher revenues and long term client loyalty that simply trying to sell them the tool alone (e.g., Widget).  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in your product design and positioning.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] How to Grow Using a Roll-up Strategy

 

I was recently interviewed by Chelsea Wood, a Managing Director at Acquisition Lab, an M&A advisory service for early-stage entrepreneurs that prefer to grow through mergers and acquisitions, instead of building a startup from scratch.  This video presents strategies for how to think about planning and executing a roll-up, rolling many businesses up into one company to achieve better economies of scale (which we better detailed back in Lesson #258).  I thought this video turned out great, and Chelsea was kind enough to allow me to share these learnings with all of you. Enjoy!!

Thanks Chelsea for this opportunity.  It was fun collaborating on this project.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] What's More Important--Product Features or Benefits?

I was recently interviewed by the Atlanta Small Business Network (ASBN), an online "television network" serving the small business community, about how to best to pitch your product to potential buyers, and whether to emphasize the product features or the resulting revenue, cost saving or user experience benefits to your customers.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in your selling efforts.  I hope you like!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above, or feel free to watch it on the ASBN website.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #343: How to Analyze and Report Your Financial Results

 

You would be surprised how many entrepreneurs don't truly understand the financials of their business.  Yes they are creating them out of Fresh Books or Xero, and they most likely focus on high level numbers like total revenues and total profits.  But, they don't dissect everything in between.  And, more often than not, when it comes to managing the finances of your business, the devil is in the details.  This post will help you learn the basics of formatting, interpreting and reporting your financials, so you will look like a pro with your investors or whoever else may be asking for them.

The Key Financial Statements

There are typically three financials statements that are prepared: (i) the income statement (or often called the P&L statement); (ii) the balance sheet; and (iii) the cash flow statement.  The income statement measures all inbound revenues and outbound expenses of the company, for whatever date range you are interested in studying.  This is the most studied of the financial statements, as all companies are striving to grow their revenues and profits over time.  The balance sheet lists all the assets, liabilities and equity in the company at any single point in time.  As the name suggests, the asset values, must balance with the liability and equity values. The cash flow statement gives you a true sense to how your cash balance on the balance sheet are moving up and down with any operating, financing or investing activities that may not be entirely clear from the profit levels shown on the income statement.  For example, the cash flow statement will adjust for non-cash items like depreciation and show how cash was used other than for paying expenses on the income statement.

Optimizing The Income Statement

To me, these are the key numbers to study on the income statement: (i) revenues; (ii) gross profit margin (revenues less cost of goods sold); (iii) EBITDA (gross profit less all expenses, resulting in earnings before interest taxes depreciation and amortization); (iv) return on ad spend or ROAS (revenues divided by sales and marketing costs); and (v) return on staff spend or ROSS (revenues divided by total payroll investment including salaries, bonuses, commissions and benefits).  There may be others depending on your industry or business model, but these are a few of the bigger ones that apply to most all companies.

Optimizing for revenues is pretty simple to understand--more is better than less!!  The bigger revenues grow, the better.  So, you are always trying to improve your revenues from the preceding period, either the prior week or the same week of the prior year if there is any seasonality in your business.

Optimizing for gross profit means that you want your gross profit margin (gross profit divided by revenues) to be improving, or at least staying flat in every future period.   Said another way, you want your cost of goods sold as a percentage of revenues to be staying flat or improving. Rising costs will obviously hurt your bottom line profits.  And, looking for opportunities to lower your costs, either with new vendors or more efficient processes will help you here.  Gross margins can vary wildly based on your business model, but often end up in the 20%-80% range, with most in the 30-40% range.

EBITDA is obviously benefitted by improvements in revenues and gross profits, but it is also benefitted by keeping all of your other expenses as a percentage of revenues flat or improving over time.  In terms of which expenses you need to focus on optimizing--focus on the big ones.  For most companies that is typically sales and marketing expenses and payroll expenses.  Those should clearly be broken out as separate line items.  The minor expenses can be bundled into "other expenses", but they too should be optimized where they can.  You are doing well if EBITDA is growing in dollars, and the EBITDA margin (EBITDA divided by revenues) is improving over time.  Worth noting, some expenses are fixed one-time expenses (e.g., your CEO's salary), so they will become less as a percentage of growing sales.  And, other expenses are variable recurring expenses that scale as you grow (e.g., shipping costs), that will most likely stay flat as a percentage of sales. So, know the differences here.  EBITDA margins typically end up in the 10-30% range, depending on your business model.

ROAS is probably the most important metric you are managing for.  You can't grow revenues without growing your sales and marketing investment.  And, you want to make sure you are acquiring new customers as cost effectively as possible.  ROAS typically ends up in the 3x to 10x range, and the higher the number, the more effective your advertising investment is.  Worth noting, it is okay if your ROAS slightly declines over time as you scale, as your initial marketing spend is typically more effectively invested than your tactics used at scale.  But, it always has to end up in a profitable return on marketing investment.

ROSS is another important metric to measure.  It helps to measure that your investment in human resources is maintaining or improving its efficiency over time.  ROSS typically ends up in the 5x-10x range depending on your business model.

Optimizing The Balance Sheet

To me, the key numbers to study on the balance sheet are: (i) cash; (ii) debt ratio (total debt divided by total debt plus invested equity); (iii) current ratio (current assets divided by current liabilities); (iv) inventory turnover ratio (cost of goods sold, divided by average inventory); and (v) return on capital or ROC (net profits divided by total invested capital).

Optimizing for cash is pretty straight forward, more cash is better than less!  You always want to have enough cash on hand to ensure you can at least manage your business needs for the coming 12 months or more.  If not, it may be time to consider a financing or lower your expenses and cash burn rate to extend your "life line".

Debt is typically a bad thing for early stage businesses, given all the risks and uncertainties of a startup environment.  And, most debt for small businesses comes with personal guarantees from the owners, which means if the business can't pay its debts, the individual owners are backstopping the liability, and you can personally bankrupt yourself with any business failings.  But, if you are going to take on debt, never let your debt ratio exceed 50% of invested capital.  And, seek-asset based funding sources that can secure your assets or inventories, without requiring any personal guarantees, where possible.

Your current ratio is basically measuring if your current assets exceed your current liabilities or not, and that there isn't any immediate cash squeeze needed to fund working capital needs.  So never let this ratio go below a 1:1 ratio, or there may be some short term capital needed to fund immediate liabilities.

Your inventory turnover ratio is measuring how fast you are moving product in and out of your warehouse.  It is calculuated based on your average inventory levels in the studied period, not necessarily the point in time balance on a specific date.  The faster you are turning inventory the better, to reduce your out-of-pocket cash investment in inventory.  I would say an average business is turning inventory 3-4x per year.  If you are turning less than that, you may need to write off inventory that is not selling or change your product and sourcing decisions to help the business become more efficient.

Your ROC is helping to illustrate that you are getting your investors a good return on their investment.  Depending on how large your business and how fast you are growing, I would say ROC needs to be in the 15% to 35% range, on average, in order to attract and retain your investors. 

Optimizing The Cash Flow Statement

The cash flow statement is simply another way of studying your cash inflows and outflows, where you obviously shouldn't be spending more than you have to spend.  But, this statement is helping your CFO know whether cash was spent or generated from operations (e.g., capital expenditures for replacement equipment); investing (e.g., took an equity stake in a supplier) or financing activities (e.g., closed a new equity investment into the company).

Reporting Timing

To me, every business needs to be studying its business on at least a monthly basis.  Bigger companies tend to study their businesses on up to a weekly, or even a daily basis.  But, no less frequently than monthly.  So, at a minimum, when you get to the 1st day of any month, it is time to study the financial results of the preceding month.

Reporting Analysis

In your financial statements, I would be reporting results for: (i) the current month; and (ii) the year to date period.  And, I would be comparing them to; (i) the original budget; and (ii) the same results for the prior year period (e.g., compared March 2022 to March 2021).  And, the reports need to include: (i) dollar amounts; (ii) percentages of sales; and (iii) percentage growth rates, for every line item.  These reports need to include each of the important datapoints and metrics discussed in this post, so you can track their progress over time, and study if the business is doing better or worse than budget, and better or worse than last year, and to what extent.  

Here are example column headers for your income statement for the month of March: (i) March Dollars; (ii) March % of Sales; (iii) March % Increase; (iv) January to March YTD Dollars: (v) January to March YTD % of Sales; and (vi) January to March % Increase.

Once the reports are created, now you or your CFO need to study the data and metrics, and produce a Management's Discussion and Analysis document, that discusses the key trends and why the numbers are moving in the direction they are, and why they are better or worse than last year or the plan.  That "WHY" is the most important thing here, make sure you have a firm grasp on the reasons behind any movements in your results or metrics, so you can manage them accordingly.  So, build the monthly discipline of actually studying this when allocating your time.

Closing Thoughts

I was a finance major in college, so financial statement analysis is a pretty basic skillset of mine.  But, if you never studied finance, it can be a daunting exercise.  So, hopefully, this post can help point you in the right direction to truly mastering the numbers of your business.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #342: Don't Aspire to Be Champion (Windows)

 

Normally, in the world of boxing, you would aspire to be world champion, knocking out every opponent you see, pounding them into submission until they finally break.  But, the business world, is not the boxing world.  And, apparently, Champion Windows didn't get the memo, that  you are not supposed to beat up your own customer prospects.  I recently survived one of the most brutal sales experiences I have ever lived through, while shopping for new windows for my home.  This story was so unbelievable, that I needed to share it with you as a case study of what NOT to do, in your own selling efforts.

Background

I didn't now anything about the windows industry when I started this process.  All I knew was my home needed new windows.  I had heard of the big brands like Andersen and Pella, and did a little online research on them.  I ultimately invited Pella to make us a proposal.  But, these brands appeared to be more expensive than many others, for very similar products, and I wanted other options.  

Online research proved too confusing--dozens of unknown brands sounding all the same, and not knowing who to trust.  And, there were no installers that represented multiple brands, where you could compare and contrast products, much like you would in any other shopping experience.  So, I ended up swinging by Home Depot, for their thoughts, as they represented multiple brands.  They recommended the Simonton brand for my needs, so I invited them to make a quote as the windows and services would ultimately be backed up by Home Depot, a known and trusted brand.  

But, I still wanted a third quote.  I had seen a few new windows already installed in my home, so for a consistent look, I called the old owner and asked what brand she used, and she mentioned Champion Windows.  I assumed they would be more price competitive than the bigger brands like Pella, so I invited them out to the home to make a quote, as well.

The Pella Quote

The salesperson who came out to my home was pleasant and appeared knowledgeable, answering the questions I had.  He measured my 24 windows and quoted me within an hour.  He quoted me around $29,000 for their vinyl windows.  At $1,200 a window, that was a lot more than the $600-$1,000 range that was being discussed online, in terms of a reasonable budget for replacement window costs.  I guess that was to be expected from a major brand, being a little more expensive.

The Simonton Quote

Again, a very knowledge and friendly salesperson from Home Depot came to the home, showed me his products, compared the various brands in the industry (which was one of my goals), did his measurements and quoted me the project within an hour.  The quote came in around $22,000 which felt good to me, especially with how comparably rated Simonton was to Pella in the Consumer Reports reviews online.

The Champion Sales Pitch

Let me start by saying Champion was in my home for over four hours!!  And, it wasn't a single salesperson, it was a two person team (a salesperson and his boss, training the new salesperson).  It started with an outdoor tour of the house, not only looking at the windows, by trying to find other products that may need replacing (e.g, doors, sills). I can't discredit them for trying to upsell an order, if they could.  But, they were here to focus on the windows.  So, it was frustrating me that they were wasting my time on anything other than windows.

When they finally came inside.  They made me sit through a long slide show presentation.  They discussed their company, their position within the industry, their warranty, etc.  But, no discussion of the products themselves.  After an hour of politely listening, I asked if we could jump ahead and see the products, he said no that they have to follow their set script.  And, worse yet, if I did not verbally agree they had the best warranty in the industry, they would refuse to continue their presentation and would leave my home.  I should have had them leave at that point, but I was invested at this point, and wanted to learn their quote.  So I continued on with their shenanigans.

When we finally got to speaking about their products, I have to give them credit.  They did a good job of positioning their products as the best.  They showed their white colors vs off white colors of others, they showed how durable its construction vs. flimsy others, and they showed a corner cut of them vs. the competition (with theirs insulated).  But, the wow moment was when they took out a heat lamp and compared BTU readings of their glass vs. others, with them looking great.  Of course, I didn't know any better, and in hindsight, learned that many window sellers do the same thing with an "off the shelf" window salesperson kit.  But, by this point, I was finally warming up to their products; it only took two hours to get to this point!!

The Champion Quote

Drumroll, please!!  The time I had been waiting for had finally arrived.  After asking me to confirm they were the best company, with the best warranty, with the products, and there was no reason other than price not to engage them, they finally gave me their quote.  Understanding, I had already told them the quotes of Pella and Simonton, with the hopes that they would try to beat it.  So, you can imagine my dismay when their initial quote was a whopping $54,000, after two hours of sitting there.  When I told them "are you crazy?", knowing what they were up against, they tried to position it, "well, you said we were the best, and that comes at a premium".  

When I told them that price was a non-starter, then they said, "well, we have a 15% off sale, and if you buy today I can increase that to 25%".  That lowered the price to $41,000.  But, I still said that it felt too high vs. the others.  He said, "well, what do you want to pay".  I said I was prepared to pay up to $1,000 per window, so I would agree to move forward at $24,000.  He countered with, "I'll have to talk to my boss, but the best I could do is $29,000, again if you buy today." And, that was swapping out five double hung windows, with two cheaper slider windows which saved $2,000 (so apples-for-apples he was at $31,000 vs. the others).  

He saw I was getting close to accepting, so then he throws in doing any window sill repairs that he saw outside for free, which he said was a $3,000 value.  So, $26,000 was his final offer, reiterating it had to be now or never.  If he left the home, the price would immediately jump back up to $41,000, as their company requires a "same day sales policy", and that if I wanted a lower price, I would have to wait a year for them to come back out and quote again.  It sounded like sleazy sales tactics to me, as I couldn't imagine they would walk away from a huge sale.

What Happened Next

I told them I needed to clear a purchase of this size with my wife, and that she wouldn't be home for a couple hours.  I asked if I could call him later and purchase tonight.  He repeated, "if I leave your home, the price goes up".  Now I was getting upset, saying how unreasonably stupid that sounded, where he reiterated "company policy".  After another 15-20 minutes of hemming and hawing, he finally agrees that if I sign a contract now, he will put an out-clause in it, that if my wife does not agree to move forward, we won't, but I need to write a 25% check as a deposit before he leaves.  I told him I psychologically would not write a check until I am ready to purchase, and after a little more back and forth, he finally agreed that if I sign the contract with the out-clause, I could call him later with a credit card (breaking yet another company policy for me).  I begrudgingly did it, trying to lock in the low $26,000 price for what I perceived as a good price for what appeared to be a good product.

My Wife's Reaction

When my wife came home, I shared this story, and how I was browbeaten for over four hours.  Her reaction was, "I don't care how good their windows are, they are not getting our business.  They sound like complete slime balls, and I will not give them my business out of principle."  At which point I terminated the contract with Champion with my out-clause.

The Ace Up My Sleeve

What Champion didn't know was, I was communicating with Home Depot while Champion was still at my home.  I shared the above story and my thoughts of the Champion pitch and product, at which point the Home Depot salesperson said "don't fall for their dog and pony show, it is all smoke in mirrors".  As an 18 year veteran in the window industry that was brand agnostic, I trusted him when he said Champion is offering you nothing that merits paying a higher price than the Simonton quote.  He was convinced Simonton was a better product.  And, even came back to the house the next day and repeated the same heat lamp experiment for me that was done by Champion, to prove they were the same.

The Part That Upset Me Most

At one point in the conversion with Champion, I asked them point blank: "why would you start at $54,000 when you know you are competing with a $22,000 to $29,000 quote?"  His response: "you would never imagine how many people pay the first price without even negotiating it."  All I could think: you are willing to fleece unsuspecting people that don't know any better to the tune of almost 2X the price, pocketing that extra $28,000 as pure profit.  Glad I negotiated, but it was a pretty awful experience of getting to that price I was willing to pay.

Selling Lessons for You

My suggestions for all of you coming out of this case study: (i) build great products, as ultimately that is what people want most; (ii) price them competitively out of the gate with your first offer; (iii) limit your sales pitches to an hour or less, where you can (everyone is busy); (iv) follow the lead of your customer if they want to discuss something that is "off script"; (v) don't take advantage of customers, be honorable corporate citizens; and (vii) be nice people, as customers ultimately want to work with nice people.  I sure hope Champion reads this blog post and changes their ways.  And, if you ever need a good window guy, I now have a good one at the Home Depot (who ultimately won this project at $20,000 when they swapped the double-hung windows with sliders, as Champion proposed)!

For future posts, please follow me on Twitter at: @georgedeeb.