Flint's Blog

Surprisingly Great Sales Effort

I try to spend a large portion of my time on sales so like a lot of other salespeople, I'm always intrigued by how others sell. 

If I'm buying a car I'll tell the salesperson that I'm in sales and give him/her the approach that works best with me just so we can skip a lot of BS.  If you've ever had a car salesperson go into the back to "ask their manager" if they can do something special for you, you know what I'm talking about it.  I'm convinced that car salespeople are given a book of sales tricks to use.

I went to Lowes last week with my wife to get some deck furniture to replace a table that smashed into a million pieces (what a mess).  My wife and I were blown away by the level of service we got from one of their people.  I had to track someone down but ultimately found somebody on the top of a big ladder.  She came over, asked us how she could help, located the deck set we wanted, got us a cart, and muscled it on to the cart for us. (I did offer to help with the last part but she was too quick for me).  To top it off, she even checked us out at the register.  My wife and I got to talking in the car about this since it was so outside of a normal Lowes experience. I told my wife that she was the Assistant Store Manager which I saw on her name tag.  I tend to notice these things.

Today I get a call on my cell phone from an unknown number.  My first thought is oh great, my cell phone number is on some telemarketer list, what a hassle.  I answer the phone and it's a man who says in a very professional voice "Hi, I'm Steve from the XYZ Landscaping.  We did some work on your property last year and we're just calling to see if there are any landscaping projects you could use some help on."  Well I just finished spreading 7 yards of mulch and made my annual promise to never tackle any landscaping project more than pulling a weed so there are LOTS of projects they could help me with.  This call couldn't be more timely.  He asked me what kind of projects, I told him some details, he asked for my email, and promised he would email me a quote.

Keep in mind this wasn't some professional Oracle salesperson, this was my landscaper!

This is called Proactive Account Management and is probably the easiest and most effective sales technique.  A lot of companies, including Billtrust, don't do anywhere near enough of this.  The main reason is that sales teams have compensation packages typically geared towards driving new business.  The incremental revenue for add-on sales doesn't make sales people enough money so they don't focus on it. 

If your company doesn't do enough Proactive Account Management, what are you waiting for?

Do Long Term Contracts Lead to Unhappy Customers?

The Business of Software Blog had a great post recently (see here) about why locking customers in for the long term can often be a bad thing.  One of the big takeaways is that when customers are locked into long term contracts then your goal is primarily to get customers to sign the contract. Keeping them happy becomes secondary because what are they gonna do, they can't leave.

The outsourced billing space operates primarily on long term contracts as well.  The theory put forth is that a certain amount of equipment time (printers/inserters) needs to be purchased/reserved and that if customers could leave whenever they want, then it would be incredibly difficult to forecast capacity and therefore impossible to run the business.  I think for the most part this is a complete fabrication.

At the very high end of our market where customers are mailing out tens of millions of bills per month, this logic is true.  In fact, some of outsourcing vendors actually will buy not only additional equipment to service a customer but also additional facilities to house the equipment.  I agree that long term contracts make sense here because you're asking a vendor to commit a lot of capital and they need some assurance that they've got the business for a fixed amount of time.

However, this large end of the market probably accounts for < 2% of the billers who outsource or are candidates for outsourcing.  For the other 98% of the market, the equipment needed to satisfy their billing volume is minimal.  Therefore the argument that you need to protect the vendor for the capital outlay doesn't hold up.

Now for my blatant Billtrust plug.  Over 99% of our customer contracts have the following clause:

Unconditional Guarantee: If at any time Customer is dissatisfied with the performance of Billtrust or for any other reason wishes to cease using the Billtrust CompleteBilling Service, Customer may terminate this Agreement by providing written notice to Billtrust.

We do this for a few simple reasons.  I want our customers staying with us because they love our service. I want everybody in our organization to know that if we don't do a great job, that customers have the right to leave.  I absolutely don't want customers staying with us because they legally have to.

So after almost seven years in business, I think we made the right call.  Our customer retention rate is over 99% in an industry that churns 10-15% of their customers annually.  Our customers are our best salespeople because we try our best to keep them thrilled with our services every day.

The Most Valuable Programming Lesson Ever

I learned the most valuable lesson of my software life back in the early 1990s when I worked at BrownStone Solutions.  BrownStone sold mainframe Data Dictionary / Repository software to Fortune 1000 companies for $250K+ per implementation.  Real esoteric stuff with data modeling, metadata, meta-meta data, and other incredibly uninteresting stuff to 99% of the population. 

We had one competitor that we saw regularly in the market that would routinely kick our butts.  None of us programmer types really knew about the routine beatings because our bosses subscribed to the mushroom management theory of running a company. In 1995/1996, Platinum Technology, headed by Andrew "Flip" Filipowski bought both of the companies.  The competitor company got bought for something like 15 times what Platinum paid for BrownStone. 

After several technical meetings where we were trying to come up with what our combined offering should like, it was apparent that their solution was barely a software product, it was more of a bunch of code that consultants put together in the field.  How could we be losing to these guys?

As much as it pained me at the time, I learned that great software is just not enough to win in a competitive market.  Without great sales, marketing, consulting, and execution, you need to be awfully lucky to be successful.  However, the opposite is often true - bad software will sometimes be enough to sink a company although if you're really good at sales and marketing, then that can overcome a lot of software messiness. 

Our competitor out-executed us in all the areas that I didn't even realize at the time were important.  Seems obvious now but not something they taught at RPI to us Comp Sci types.