Following are my notes on last night’s MIT Enterprise Forum event: “Lead Generation 2.0: How Entrepreneurs are Fueling the Next Wave of Innovation in Internet Marketing”

Moderator: Brian Hirsch, Managing Director, Greenhill SAVP
Brian Hirsch is a Managing Director of Greenhill SAVP and a Co-Chairman of the Fund`s Investment Committee. Prior to joining SAVP in 2004, Mr. Hirsch was a Principal at Sterling Venture Partners and led the firm`s investments in technology-related companies. Mr. Hirsch is currently a board member of BDMetrics, BestContractors, FTRANS, iKobo, Pontiflex and Serious. Brian previously sat on the board of YellowJacket (acquired by the Intercontinental Exchange, NYSE:ICE) and KnowledgeStorm (acquired by TechTarget, NASDAQ:TTGT). Prior to joining Sterling Venture Partners, Mr. Hirsch was a vice president at ABN AMRO Private Equity (AAPE”), the U.S. venture capital group of ABN AMRO N.V., one of the world`s largest banks. Before joining AAPE, Mr. Hirsch worked as a senior consultant at KPMG in the Information, Communications & Entertainment (ICE) practice, where his clients included General Electric, CBS/Westinghouse and the Tribune Company.

Hirsch: We’re very excited about lead-gen. 2007 Sales : $1.3b. Twice growth rate of search or email marketing. $2b in 2008
Have backed 4 lead gen companies in the last space

Drew Patterson, VP of Marketing, Kayak.com
Drew Patterson is responsible for product marketing and lead generation through Kayak`s travel suppliers and distribution partners. Kayak is the world’s largest travel search engine and was co-founded by founders of Orbitz, Expedia, and Travelocity. Kayak.com’s investors include General Catalyst Partners, Sequoia Capital, America Online and London-based Accel Partners.
Prior to joining Kayak, Drew held a number of positions at Starwood Hotels. As Director Pricing for Starwood, Drew was responsible for Starwood`s Pricing group, which develops and executes Starwood`s pricing and revenue management strategies. This includes management of the Starwood rate structure, analysis to identify effective pricing strategies, observations on company revenue performance and trends, and training for the field revenue management organization.
As Director, Distribution Strategy, Drew was responsible for the development and implementation of Starwood`s distribution strategy, including leading Starwood`s Best Rate Guarantee in 2002 and developing TravelWeb, the hospitality industry`s response to the independent lodging discount websites. Drew joined Starwood in 1999 as Manager of Business Development, responsible for developing partnerships and new business opportunities. Drew graduated from Harvard and received his MBA from Columbia University`s Graduate School of Business. He resides in New York City.

Patterson: We’re both a vendor and a buyer of leads.

Suaad H. Sait, Chief Executive Officer, ReachForce.com
Suaad Sait is CEO of ReachForce. ReachForce, based in Austin, Texas, provides data and software solutions that enable B2B companies to laser target marketing and sales initiatives at the right person in the right company, every time. As an entrepreneur and high tech industry executive, Suaad has played leadership roles at start-up companies as well as large publicly traded firms. Mr. Sait is the driving force positioning the company as a leader in the emerging marketing and sales force automation segments of the CRM OnDemand market.
Prior to ReachForce, Suaad was the vice president and general manager of Products & Markets at Pervasive Software (PVSW) with world-wide P&L responsibility of the entire product line. Suaad served as the Chief Marketing Officer and COO of Liaison Technology (acquired by Forest Express) repositioning the company into a software platform for supplier catalog content management. Before Liaison, Suaad served as vice president of product marketing at Motive Communications (MOTV). He was on the founding team for Ventix Systems and served as the vice president and general manager of the enterprise business and vice president of marketing. Suaad has also held leadership positions at DAZEL Corporation (acquired by Hewlett Packard), InConcert Software (acquired by TIBCO), CAP Ventures and Xerox Corporation. Suaad earned his Master of Science in Business Administration (MBA) from the University of Rochester and a Bachelor of Science in electrical and computer engineering at the State University of New York at Buffalo.
Suaad has served as a Mentor for the New Venture Creation program at the McCombs School of Business - The University of Texas at Austin since the Fall of 2005. He also currently serves as an Executive Advisory Board Member of the Austin Chapter of the American Marketing Association. In, addition Suaad serves as a board member of the Austin Technology Entrepreneurs’ eXchange (”Texchange”).

Sait: Our founding team was tired of ’spray and pray’ marketing. We developed analytics around your sales funnel. We’ll custom-build leads databases for you.

Brad Powers, CEO Active Response Group
We’re getting 100,000 registrations/day. Strictly paid on performance.

Zephrin Lasker, Chief Executive Officer, Pontiflex.com
Zephrin Lasker is CEO of Pontiflex. Pontiflex, based in Brooklyn, NY, is the first open data transfer network connecting publishers, advertisers and agencies. The company allows advertisers and publishers to reach the entire lead generation market, find partners, make deals and transfer lead data through a single online platform.
Zephrin has been involved with online marketing since its inception more than a decade ago. Zephrin is also a serial entrepreneur, having successfully launched two start-ups prior to Pontiflex. Pontiflex is backed by New Atlantic Ventures and Greenhill SAVP.
In the course of his career, Zephrin has played a key role in shaping campaign successes for a variety of clients such as Sprint, Cendant, Earthlink, and eFax, helping them acquire over 8 million new customers. Prior to co-founding Pontiflex, Zephrin founded The North Road Group, an interactive agency. He has also worked as Vice President of Business Development at i33 Communications, where he managed sales and technical teams to help deliver new customers, launch state-of-the-art websites and deploy cutting edge marketing initiatives.
Prior to i33, Zephrin worked at Commerce One Global Services managing Sprint’s new web initiatives. He has also co-founded the e-commerce company Beautility, where he served as Chief Operating Officer.
Zephrin has a background in corporate finance. He has worked for Dresdner Kleinwort Benson in the areas of corporate finance and mergers and acquisitions. Zephrin began his career as an Equity Analyst at Creditanstalt in Prague. He is an avid fly fisherman and is currently learning how to spray cast. He has a BA degree from Reed College.

Lasker: Central place to buy leads.

Discussion
Hirsch: Define lead generation
Powers: Permission-based expression of interest.
Zephrin: Any media that can be sold on a cost-per-lead basis
Sait: Identifying the right buyer is important.

Hirsch: Distinguish b2b and b2c.
Sait: In B2B, Target person is often hidden within the organization. In B2C, it’s much clearer who the buyer is.

Hirsch: Distinguish marketing leads vs. sales leads
Lasker: We’re focused on ‘ marketing leads’, which we think of as generic rather than specific. A marketing lead is brand-specific. A marketing lead usually has fewer fields (just name, zip), whereas a sales lead will often have more data (FICO score, etc.)

Hirsch: How should a marketer think about allocating his budget?
Powers: First think about your maximum permissible cost per sale/cost per lead.
Lasker: lead-gen is half the puzzle; email marketing is the other half. Have a good CRM program, good KPIs set up. Follow your open rate.
Lasker: How do you define success? Leads are the lifeblood of business. A lot of people look at conversion.
Sait: Do as much experimentation as possible. It’s cheap.
Powers: We came up with some guidelines for data transfer for the IAB.
Lasker: We started as the Paypal of lead-gen—an easy way to transfer leads between advertisers and publishers.

Hirsch: What legal issues should you be monitoring?
Powers: we have many consumer-facing sites, and are very diligent about making sure we’re compliant. We’re dealing with PII (personally identifiable information) so you have to encrypt everything. In the EU, anyone providing you leads must be Safe Harbor certified. I.e., you’re recognized as having secure data and procedures. Also, must be compliant with DNC (Do Not Call) list. Lead-gen can create an implied business relationship with end consumer, so you don’t have to check against the Do Not Call list.

Hirsch: Where will lead-gen grow? Which verticals?
Patterson: search engines don’t like lead-gen arbitrage sites (i.e., direct navigation). We prefer sites (like Kayak) which add value to the funnel.
Powers: one month our #1 offer was prepaid funerals. I almost fired my VP of Sales for signing them, and it paid for a chunk of my kid’s college education. A big area of growth is building on-demand hyperqualified lists.

Hirsch: Where does Google sit in the lead-gen universe?
Powers: There’s a finite amount of search ads available at a productive cost. It can get expensive very quickly.
Sait: For clients way out in the long tail, with very niche sites, Google is very good.

Question: How do you assign a value for a lead?
Answer: Depends on what you’re seeking

Question: Compare quality of leads from Microsoft, Yahoo, Google? And how does ROI compare on display vs. PPA?
Answer: Google has better conversion but higher prices. So on a net basis, the ROI is comparable to the competition.

We have not figured out how to measure the value of display ads.
Powers: tail end of social network inventory is almost unmonetizable.
Lasker: we just rolled out a lead-gen box in a banner, so you get both the branding and the lead-gen benefit.

Company Presentation
Vitals.com
Vitals was created to give consumers the tools — for the first time — to make intelligent, informed decisions about which doctor to choose. The Vitals.com web site offers consumers a variety of ways to help in their choice of the right doctor. And it allows physicians to keep track of what others are saying, gives them the opportunity to let consumers know about their work, and lets them make sure their profile is complete and accurate. Vitals’ business plan will be presented by Mitchel Rothschild, Founder and CEO.

30m people per month search doctors by name or by location/specialty.

3 big issues: location, specialty, and insurance network
Then other criteria are on the softer side: gender, languages, bedside manner, ethnicity

Background data:
30% increase in ‘excellent’ rating when people rate people of the same ethnic affinity.
What people want in a doctor: takes time; honest & direct; eye contact

First, we built a database of the 720K doctors in the US
We then mapped the healthweb. Found 20,000 sources of data about doctors: hospital websites, board certs, licenses, publications. We extracted all that and applied it to our database.

Three parts of wheel clients use in judging a doctor:
1. Quality: education, special expertise (22% of drs. are not board-certified.)
Current profile:
2. Add in consumer ratings from various sites (TripAdvisor as model)
3. Peer reviews: Partnered with Castle Connolly. Over 200K peer evaluations

Went live in January. We have millions of home pages which match up with the search that you’re making. We’ve spent $8K so far on lead gen. 1M visitors currently. Great search engine optimization.

Sources of Revenue

1. We’re a media property
2. Data leasing. We’ll reskin our site for various health plans and employers. Most health plans built their directory back in 1998, and haven’t updated since. We get 15-20 commercial users per day, usually hospitals, medical centers, etc.
3. Three basic human emotions: Greed, fear and ego. Because doctors have lots of ego, we’ll help doctors fill out the wall of fame in their offices. Doctors will also pay a lot for this.
4. Lead-gen: personalized search. Appointment-setting thru hospitals. Elective care procedures. Expected cost of visit. Patient advocate for reimbursement with health insurer. Choice of hospital for procedure. Purchase of needed equipment/services. Second opinion.

Online consults mainly used by younger patients with younger doctors, e.g., a pregnant teenager.

We don’t typically have a lot of repeat visitors, given the nature of our site.

Today, we focus on advertising / data leasing. Lead gen is the long term future for us. We’re currently pricing our advertising on a CPM basis. Some are PPA.

1m visitors per day, about 85% unique
5 page views/visitor

Q: How did you get consumers to review the doctors initially?
A: We bought them initially, and now about 3-4 % of visitors will do a review. That’s 50,000 per day. We do a little SEM to get reviews.

John Peters, Tripology
Tripology is a new website aimed at connecting consumers with travel agents that specialize in the type of trip they wish to take. Tripology.com aims to take the hassle out of finding a great travel agent. There are a lot of expert travel professionals out there with a great deal of useful knowledge and terrific prices, but consumers don’t have a good way of finding them. And they don’t have a good way of finding consumers. Tripology`s business plan will be presented by its President and CEO, John T. Peters.

$3.25m raised
8,000 registered travel specialists
45,000 leads since june 07

Agent buys 16 leads ($5 each).
Conversion rate: 6.5%
Avg. # leads before booking : 16
Avg. gross booking: $5,000
Agent commission (10%): $500

We tell them to spend $100 on us to do a real test.

Currently flat pricing ($5/lead), but this will change to variable pricing
This is a $581m market opportunity across US, UK Canada, Australia, other Anglophone countries

eMarketer just came out with first market research on this sector.

Competitors include:
Zicasso, Respond.com, 4TravelAgents, VacationCompare

We sell a lead up to 3 times.
We’re building tools on backend for agent.

We say, this is not just a lead, this is a customer for life.

We don’t need to do much database fixing, because agents have very strong incentive to be honest about their expertise.

Agents will often list a very long list of specialties. But they’ll pay more for leads they’re convinced they can win.

I finally had a chance to upload slides prepared by my partner Scott Lichtman on how law firms can use Web 2.0 technologies to increase their billings. Download.

I’m looking forward to speaking at an upcoming conference, Web 2.0 / Enterprise 2.0 in the Capital Markets Industry, on September 17 in New York.

Liz Abraham of Financial Markets World reports that they still have slots for a few speakers with experience in using or implementing Web 2.0 in the capital markets industry. If you’re interested and qualified, contact liz.abraham(at)FMWOnline.com .

My topic is How to Source Deals Using Web 2.0 Technologies, focused on how investment bankers, hedge funds, and private equity funds source investments.  I also will be on a panel on Web 3.0.  Preliminary outlines of my presentations are at the preceding links.  If any readers have suggestions on this general topic, I would welcome them.

The folks at Landslide have figured out a great marketing strategy: If you view a demo of their “sales workstyle management” system, they’ll give you a free copy of The Virtual Handshake–Opening Doors and Closing Deals Online.

Alex Salkever of Inc. wrote in Turning Sales Into Science that Landslide “gives sales staffers what they need, when they need it, to close a deal.” In other words, Landslide provides salespeople more infrastructure, so that they can focus more on selling and less on all of the other activities that distract them from their main job.

Link: Watch a Landslide demo, get a copy of The Virtual Handshake

An interview with Michael Gerber, Author of The E-Myth Revisited:

“If they don’t fail outright, most businesses fail to fully achieve their potential. That’s because the person who owns the business doesn’t truly know how to build a company that works without him or her.. which is the key.” - Michael Gerber

Michael Gerber is the founder and CEO of E-Myth Worldwide, and best selling author of The E-Myth Revisited, and E-Myth Mastery. He defines E-Myth as: 1: The entrepreneurial myth: the myth that most people who start a small business are entrepreneurs, 2: the fatal assumption that an individual who understands the technical work of a business can successfully run a business that does technical work.

Since its publication in 1995, this business classic has sold over one million copies, and is published in 16 languages. Michael observes that most small businesses are started by “technicians”, that is, people who are skilled at something and who enjoy doing that thing. When these technicians strike out on their own, they tend to continue doing the work they are skilled at, and ignore the overarching aspects of business. Without clear goals and quantification benchmarks, they soon find themselves overworked, understaffed, and eventually broke. They come to hate the work they do. Rather than owning a business, Gerber writes, “they own a job.”

Click here for the interview.

Given Nitron Advisors is in a reasonably competitive industry, I’m very interested in tools like http://competitio.us/. The basic idea is that it’s a tool for companies (or investors) to keep track of their competitors’ actions and features.

I’m not sure it’s got enough differentiation to be a sustainable business, but as a customer, I like it.

Via Techcrunch

As a followup on my Vistage presentations, here’s “What every CEO needs to know about the array of new tools that foster online collaboration — and could revolutionize business”: BusinessWeek: Web 2.0 Has Corporate America Spinning

I enjoyed speaking at lunch at two Vistage regional conferences this past week, in New York and Chicago. (As background, Vistage is the world’s largest CEO membership organization based on revenue.)

You can download my two presentations here:

+ Chicago Conference: How to Accelerate Your Company with Web 2.0 Technologies

New York Conference: Seven Free, Easy Steps to Accelerate Your Business with Web 2.0 Technologies. I have also attached the New York handout below in HTML format.

Feedback welcome!

Seven Free, Easy Steps to Accelerate Your Business with Web 2.0 Technologies

Ch = Character

Co = Your firm’s Competence

R = Relevance of the other company

S = Strength

I = Information

N = Number of companies

D = Diversity

Value of Your Corporate Network = D * ∑^N_n=1 (Ch_n * Co_n * R_n * S_n * I_n)

And one more resource:

For Job-Hunters (and Salespeople): How to Find a Contact Name Inside a Target Company

Job-hunters have a number of hurdles to surmount, but one of the greatest is this: how do you get a name inside a target company? When you want to send a letter of inquiry to a company (about a job), you really want to find the right person’s name, in order to contact him or her. If you can’t find the right person, you want to find someone who can put you in touch with the person you seek. Here are ten ways to find a name inside a company you are targeting.

More…

I recently was fortunate to participate in a panel discussion on “The Great Sales and Marketing Debate: The Cagey Sales Veterans Debate the Young Up-and-Comers”, sponsored by the New York Software Industry Association, March 13, 2006, held at JP Morgan Chase.

Allen Reynolds and Jesse Mandell all took some notes, which we have merged in the summary below.

Master of Ceremonies, Bruce Bernstein, welcomed and introduced the two questioners and four debaters.

Questioners: Sherri Sklar and Ruth P. Stevens

Sherri Sklar, President, Sherri Sklar Strategies, LLC
Sherri Sklar has built a star track record in helping organizations obtain exceptional results. Over the last 20 years, she has enabled organizations to make dramatic turnarounds, helping under-performing divisions achieve significant growth in the most difficult of marketplace conditions. Ms. Sklar has helped organizations in marketing strategy and execution, sales strategy, sales execution and performance, business development strategy, channel management, and communication skills training. A frequent presenter at seminars and conferences, Ms. Sklar practices and teaches ‘peak performance delivery’, a proprietary technique Ms. Sklar employs to help clients achieve optimal results. Ms. Sklar is President of her own consulting company, Sherri Sklar Strategies, LLC., (SSS). SSS is a sales, marketing and business development consulting firm that delivers measurable results from assessment, proven strategies, and excellence in execution. Ms. Sklar received her MBA from Harvard Business School and her BA from Newcomb College at Tulane University.

Ruth P. Stevens
Ruth P. Stevens’ expertise in customer acquisition and retention derives from a decade and a half of hands-on marketing for both large enterprises and start-up companies. Just prior to beginning her consulting practice, she served as chief marketing officer at an Internet company in New York City. Before that, she had broad responsibilities for direct marketing at three corporate giants– IBM, Ziff-Davis and Time Warner.

At IBM, she served as director of direct marketing, North America, for the IBM hardware, software and services brands, leading a team of 140 direct marketing professionals. She then moved to the IBM Software Group, where she directed global direct marketing.

At Ziff-Davis, she served as vice president of marketing for the electronic publishing division, and later helped launch Ziff’s Consumer Media Group as its vice president of marketing. At Time Warner, she worked in marketing, new business development and general management for the Book-of-the-Month Club and Time-Life Books.

Ruth has been a regular columnist for DMNews and is a frequent contributor to a variety of marketing publications. She teaches marketing to graduate students at Columbia Business School and NYU’s Stern School of Business. Ruth serves on the boards of the Direct Marketing Idea Exchange in New York City and the Direct Marketing Club of New York.

She is past chair of the Business-to-Business Council of the Direct Marketing Association and holds a BA from Hamilton College and an MBA from Columbia University.

Debaters: Alan Kaufman, Ed Martino, Larry Cohen, and David Teten

Team Old School: Alan Kaufman and Ed Martino

Alan Kaufman
Alan Kaufman is a 38 year veteran of the Computer/Software/IT Industry. He was a founding member of the management team of Cheyenne Software, Inc., where as executive vice president of sales, he grew the business from $1 million in fiscal 1990 to over $200 million in 1997 to propel Cheyenne into the 13th largest software company in the industry. He has served as an officer in the Navy and holds a BS in Electrical Engineering from Tufts University. He serves on the Board of Directors of NetIQ, a leader in server and security management, and is a Trustee of Outward Bound USA. Alan also serves on the Board of Directors of NYSIA and is its founding president.

Ed Martino, Director of Industry Business Solutions, Sprint Nextel
Ed Martino is currently the Director of Industry Business Solutions for the new Sprint Nextel Company. He has worldwide responsibility for the market penetration, solution development and overall growth in industry sectors for Financial, Insurance, Media and Professional Services, a $2b business area. Prior to this role, Ed was the Director, Northeast Corporate Sales for Nextel Communications. Other roles have included the Senior Vice President of Marketing and Sales reporting to the President for two companies both in the global systems integration business. Ed also served in various global management positions for the IBM Company for eighteen years.

Ed is a member of several boards including the NY Software Industry Association where he is the Vice Chairman.

Team New School: Larry Cohen and David Teten

Larry Cohen, EVP, Heartbeat Software
Larry Cohen is one of the most creative and inventive minds in the software business. He has that rare ability to listen to a business problem, quickly isolate the key issue, and translate that insight into a practical software solution.

From his early days in the industry, Mr. Cohen has demonstrated a remarkable instinct for identifying a new technology solution and putting it to work quickly. Shortly after graduating from UC Berkeley, he pioneered the use of Webcasting in the healthcare industry. Soon after, he received an NIH grant to conceive the first online adherence programs ever developed.

Larry was a driving force behind the first enterprise-class, web-based software products for Marketing Content Management (MCM) in the financial services industry. He devised a highly innovative technology and methodology for performing online competitive intelligence. And lately, he’s been fashioning a new form of CRM that integrates data-mining and web services.

Throughout his career, Larry has closely advised some of the world’s most prestigious organizations, including Amgen, Novartis, GSK, Goldman Sachs, UBS, and Intel.

David Teten, CEO, Nitron Advisors
David Teten is a serial entrepreneur and CEO of Nitron Advisors, an independent research firm which provides hedge funds, venture capitalists, and other institutional investors with access to a network of frontline industry experts. He is also coauthor of The Virtual Handshake: Opening Doors and Closing Deals Online, the first business guide to how to use blogs, social network sites, and other online networks to accelerate your sales. He blogs on the Circle of Experts Brain Food Blog and at TheVirtualHandshake blog. David formerly worked with Bear Stearns’ Investment Banking division as a member of their technology/defense mergers and acquisitions team, and was a strategy consultant with Mars & Co. He holds a Harvard MBA and a Yale BA.

NOTES ON THE EVENT:

Larry Cohen, EVP, Heartbeat Software

David and I see 5 main differences between the ‘old school’ and the ‘new school’ of sales and marketing:

1. The new school sells highly focused products. The new school goes after underserved, highly niche markets (and submarkets) that do not have much competition or many me-too products. For example, Heartbeat Software does not sell CRM to pharmaceutical sales organizations. We sell a highly specialized CRM product to Medical Affairs Departments and their Medical Science Liaisons. Due to our specificity, we are able to work with the majority of pharmaceutical companies and offer them incredibly specific learning from their competitors. We aim to penetrate the majority of these markets (and have done so in pharmaceuticals). Similarly, Nitron Advisors focuses specifically on introducing their clients, hedge funds, VC funds, and law firms, to industry experts—and more specifically experts in transition.

The new school understands that we need to do a few things very well and that companies buy software because their competitors have bought software - period. One client told me that if no one has bought the software they would never buy it. If everyone has it — what’s the point? But if a few key competitors have purchased, they will quickly jump on board. Non-vertical specific back-up software, data storage, or cell phones are not specific enough to attract the new school.

2. The new school does not waste valuable marketing dollars on soft, non-focused, and unproven channels. The new school uses on-line and off-line tools that have a proven, measurable ROI by creating a direct, track able, one-to-one relationship with our customers. Among the major mechanisms for this:

+ highly targeted old school cold calling with a new school spin; selling a proven piece of software to a sub-market that is not being called on;

+ e-mail marketing to very specific titles and organizations where we have market share, with tracking provided by software provider;

+ Pay per Click search engine advertising (Google, etc.)

+ Pay per Call search engine advertising (Ingenio, etc.)

(Teten’s editorial note: Eloqua offers some useful marketing ROI tools.)

3. The new school focuses on smarts & network, not necessarily experience. Sales methodologies are interesting. They are also boring and notoriously difficult to get to stick or to actually change behavior. The new school understands that growing a stellar sales team is about hiring smart, energetic people who are great at sales. What makes a good salesperson? The new school knows that it is one thing: A person that keenly understands the part of themselves that other people relate to and who can leverage that part to get people to buy. We hire those people. No matter what experience, sales training, or existing client relationships they have. Google famously put a billboard up on the road from San Francisco to San Jose that had a complex mathematical problem on it. If you solved it, you gained access to a recruiting website. The new school knows that smarts goes a tremendously long way.

4. The new schools taps online networks, not only face-to-face networks. Consider that 84% of U.S. Internet users have used the Internet to contact or get information from an online group—more than have used the Internet to read news, search for health information, or even to buy something. More and more of us are using online networks, such as blogs, social network sites, virtual communities, and other “social software” as a daily part of our business life. All the major Internet players, including Yahoo!, Microsoft, AOL Time Warner, eBay, and Google, are already offering social software tools and planning more in the near future. Bill Gates, John Kerry, and other celebrities are among the over 2 million people currently registered on LinkedIn, a popular business networking site. Nitron Advisors uses these technologies both to target customers and to recruit new industry experts on our clients’ behalf.

5. The new school sells based on product quality, not just on who plays better golf. Many salespeople spend a tremendous amount of time and energy playing golf and drinking beers with customers. They believe that a personal “I like him” relationship is key to closing the sale. In the new world, that relationship is helpful, maybe even a prerequisite, but it doesn’t close the sale.

Neil Rackham, founder of sales consultancy Huthwaite, conducted a study of whether salespeople who built good relationships would really make more sales:

“We found that sellers who dealt successfully with small retail outlets in rural areas seemed to rely heavily on personal factors in their selling. . . . For example, the seller might ask, “How’s Ann enjoying her riding lessons?” . . . In rural areas, where the size of the sale was small, successful sellers used more of these personal references than did sellers who were less successful.”

“But it was a different story in the large urban stores, where the average sale was more than 5 times the size. We found no relationship between success and reference to personal issues[emphasis added].”

… “I’ve heard many other professional buyers complain about salespeople who try to open calls by cultivating areas of personal interest. The last thing a busy buyer wants is to tell the tenth seller of the day all about his last game of golf. . . . Many buyers become suspicious of people who begin by raising areas of personal interest.”

Source: Neil Rackham, Spin Selling (New York: McGraw-Hill Book Company, 1988), 140.)

Alan Kaufman

After Cheyenne sold, I retired. Soon after, I was approached by the VP of sales for NetIQ Corporation and asked where I found my stellar employees. The answer was that I trained them. Training is incredibly important. Every new situation I went into was different. I never took a cookie cutter approach to anything. A good sales/marketer carries a quiver full of arrows and can use each one for any new situation that arises.

Sherri Sklar, President, Sherri Sklar Strategies, LLC

As my first question, can you sell a complex software solution without meeting the client face to face?

Ed Martino, Director of Industry Business Solutions, Sprint Nextel

Yes, you can, but I wouldn’t advise it. If it’s complex, it needs lots of service. The biggest cost is in the service side and your goal is to build a bridge to the customer and use them as a referral to build business.

David Teten

Yes you can. Salesforce.com does it all the time. That said, the more complex the product and particularly the after-sales support, the more helpful meeting in person can be.

To sell virtually, you first need credibility (your potential clients and competitors look you up online and evaluate the validity of your service) and second, effective relationship management.

Ed Martino

I disagree with David. Most of Salesforce’s sales are to corporate customers and their success depends on the time that they spend with their customers.

David Teten

But it is impossible for a company to meet with all their smaller customers.

Alan Kaufman

You must identify how complex a sale is and whether you need to go out there to meet face to face.

Ruth P. Stevens

To be competitive in getting the product to market, how should the marketing be structured? What is the best marketing approach?

Larry Cohen

At Heartbeat, customers pay for product development. Marketing should focus on specific departments in like companies. When we call someone who works in hedge fund marketing, and say we have a product designed just for him, we get a good response rate. It’s not spam if the person is interested in buying what you sell.

Alan Kaufman

Good marketing programs include people who are interested in talking to analysts to see how the customers are buying. I don’t believe in print advertising, especially if you are working with a small budget.

Bruce Bernstein

How should you go after your target market? How do you enable the sales to happen? How do you structure the sales team?

Ed Martino

It all depends on the size of companies. It always takes lots of research and phone calls, and knowledge of the competition. Draw 3 circles:

1. What business am I in?

2. What are the customers’ needs?

3. What does the company have to offer?

The little space where the circles overlap is what you develop and present to the CIO.

Larry Cohen

Small software companies are unable to pay to talk to analysts, so they must talk to businesses in the area for the problem they are going to solve. Refer to previous success that you’ve had at one or two other companies.

Ed Martino

I agree that if you don’t have a large enough budget, don’t talk to analysts. Talk to smaller CIOs from a niche group and then work your way up to the top.

Larry Cohen

I agree with Ed. We use that business model at Heartbeat Software.

Ruth P. Stevens

The marketing department must provide good leads for sales force. How would you suggest that you develop these leads?

Alan Kaufman

Having an inside telesales group that goes through incoming leads and cold calling is good. You also need to develop a good computerized process that is repeatable. Leads from the Internet need to be shown to the inside sales group as well.

David Teten

We get to the big dogs through networks. Each member of our sales team (and of our whole company) has a personal network that we can tap.

In addition, no surprise, we use online networks. We post intelligent comments on someone’s blog to make an entrée, and get into a target’s network in that manner.

Microsoft has approximately 1,200 bloggers out of 55,000 employees. There is no excuse to cold call Microsoft; just contact a blogger in your target area, and use their blog as a conversation starter.

Ruth P. Stevens

What incentives do you use for the sales team to follow up?

David Teten

Pay people a good commission. Develop a sense of ownership. Give options.

Larry Cohen

We have company wide minimums. If it’s a top 25 pharmaceutical company we go in person and talk to them

David Teten

In order to get leads, people should be thinking about how to talk to their particular network. This method is much easier than getting leads from a database company.

Bruce Bernstein

The old school is emphasizing structure and the new school is going with leads. We hate the people who contact people for business by my boarding school alumni directory. What do you think about David’s method?

Ed Martino

If you have a niche, then you don’t need to worry about making the phone call. If you’ve got value and you’ve done the research, then the other person may actually appreciate the call.

Bruce Bernstein

It might also be a generational thing. The youngsters don’t mind getting the networking call.

David Teten

The issue is how to get the most targeted individual. Email used to be an effective means, but today, email is broken. You can’t reach people easily via email due to spam filters and overuse of the email medium. If you can find the name of person in your sweet spot, call them. Even the shallowest referral is better than an cold call.

Sherri Sklar

What are the most important things that someone in marketing can do to create a buzz for their firm and their product?

David Teten

Get to opinion leaders. Get to bloggers. They are very powerful way to spread word of mouth. That’s a large reason why companies like Foldera have attracted over 1 million downloads—great coverage in influencer blogs like Techcrunch and Om Malik.

Lead events. Be a speaker and put yourself in a leadership position. You will reach far more people speaking at a conference, than you will handing out business cards before one. Reach 100 people, not 5.

Ed Martino

Blogs sound good. We want to look into them. Press releases are also good. Sometimes a trade show is a good idea, if you can find ways to bring customers too it. You will create a buzz just from saying that you are going to be at the show. Target is the key word. Marketing to promote your product in a targeted way is very important.

Larry Cohen

For selling to institutional investors, I lean more toward conferences on asset management trends, rather than trade shows, since marketing and business people will be speaking at them. Pay for your sales people to attend, and shake hands and create relationships. It’s cheaper to send 5 salespeople than to get one corporate sponsorship.

Alan Kaufman

The trade shows that you choose to attend must have your customers there. I like to allow our customer a chance to demo our products. If possible, get a small booth so people can at least see your company logo.

Ed Martino

It’s all about ROI. It can make the difference between a million in sales and 60-70 billion in sales. ROI is key. You must be selective and you must leverage the money that you put out to get a return.

Sherri Sklar

How do you grow a stellar sales team? Do you simple hire energetic, smart people, or is there much more?

Ed Martino

I am big on balance. People with fire in the belly are important, but what you really need is diversity because it enables different groups and people to bring in their abilities to the sales force. You want young people who are energetic and idealistic to bring in pep, and older people who can bring in learned skills to pass on. You also need people from the industry for which you are selling. The younger people will give you a lot of overtime. Motivation, however, is key. People need to feel empowerment and ownership.

Larry Cohen

We are a $10m company. Each person needs to meet their quota. We do, however, go after a wide range of people. The key is to find people who know what about themselves makes them successful. We interview a ton of people, but after they are hired, 99 percent of them stay.

Ruth P. Stevens

As sales managers, how do you optimize profits to your firm when the sales team is always trying to give away a deal?

Alan Kaufman

I think it is sloppy to sell on price. You can always cut a deal if you have to. If they cut a deal too much, the loss should come out of the salespersons percentage.

Larry Cohen

We need to train people to stay by their product.

David Teten

Another idea is to pay your sales team a commission on margin instead of based on revenue. This margin info should be shared with your team, but it often isn’t. We show all our new employees our full business plan on their first day of work, because we want them to understand the big picture.

Ed Martino

In smaller companies, I would drop price to get marketing traction. If the customer will eventually become a testimonial, then it’s good. You need to take risk. Larger businesses need to have focus. They need to pick customers. At the end of the day, you want sustainability. In smaller companies, salespeople don’t see the sales price, and that’s why they try to give it away for lower.

Sherri Sklar

If someone says that he is interested in your software if you can prove to them that it is buy worthy, do you fly someone out? How do you approach the relationship?

Larry Cohen

Because products are focused, we phone and then fly to meet with them. I’ve learned that we are more likely to make the sale if we stick to the price, because if we slide, then they may question the value of the product more and more.

Alan Kaufman

In today’s world, regions are a lot larger so you have to be careful about support. How would you support your product in South Africa? This scenario requires discipline in the sales force. They should know not to go after crazy leads. If it’s a one-time, you might want to walk away, but if it’s American Airlines in Texas, you have a lot of chances to make other sales.

Sherri Sklar

What technologies can you use if you don’t know what the return will be, you don’t want to lose it the sale, but you also don’t want to send expensive resources out?

David Teten

Use all the media: IM, email, webconferencing, phone, in-person meetings. This allows for a steady progression of relationship closeness. Professor Caroline Haythornthwaite has done some very interesting research in this area showing that the more media channels you use, the higher the trust levels that develop between two parties.

QUESTIONS FROM AUDIENCE:

Scott Lichtman

How do you feel about PowerPoint and its role in sales pitches?

David Teten

People buy from people, not from paper. The more talking I do, the less selling I do. Communicate value and use a slide show for support. You want the attention focused on the company and the project, not the PC.

Ed Martino

I am seeing that the PowerPoint is here to stay. Today, it is more animated and you are trying to stay way from stale slides. There is more animation and stuff over the net. Webinars etc. are a great way to get your story in front of a lot of people.

David Teten

Humans are wired to be interactive. PowerPoints are passive, and your potential customers will learn less and buy less when they are passive. You need to keep them active if you want to keep them interested.

Bruce Bernstein

What method was used before PowerPoint?

Alan Kaufman

We used flip charts and then foils. I love listening to good speakers. A major problem today is that people don’t speak to the audience. Also, never read from your charts. If you read to your audience, you will lose them. Using a wipe-board works for developing an idea in front of a crowd. Using a PowerPoint can be a disservice.

Audience Member

In your experience, what best motivates a sales force?

Ed Martino

Incentives work if they are fun. Recognition of achievement is also important. Build a plan at the beginning of each year. Each person should know what the accelerator and multiplier is. If they blow the doors off, they will know what the cap is.

Alan Kaufman

Salesmen have fragile egos, and when they are in a losing streak, it gets to them. Give recognition to the people who perform the best. This has the incredible effect of reinforcing their positive performance.

Audience member

The three most important things for generating leads are current clients, (stealing from) competition, and referrals.

Larry Cohen

I find that if they have a rolodex, it may be all that they have to offer. That’s why we don’t go with them. At some point the rolodex runs out.

Alan Kaufman

There is nothing wrong with a portfolio, especially when you are trying to capture a vertical.

Larry Cohen

We put out our own PR, and when we come out with a new product, we send out targeted emails.

Bruce Bernstein

Earlier in evening, David Teten mentioned that email was broken. Ed Martino said that there is no place for instant messaging in corporate America. Please expand.

Ed Martino

Instant messaging is internal. Email should only be used because everything needs to be logged. Instant messaging isn’t on the radar screen, and it can’t be logged or archived.

David Teten

As the young grow up, instant messaging will become an increasingly important medium. There are plenty of companies which sell archiveable IM and email solutions. IM is being used regularly across corporate boundaries—we use it with our clients.

Bruce Bernstein

Are there fundamental differences in advertising that that came out during this discussion?

David Teten

1) There is a movement in spending from advertising in mass media to PR. We are so deluged with advertising that it has lost efficacy. However, people do read the actual content in the magazine around which the advertising is wrapped. A good PR firm can get you in there as content. We get sales leads every few weeks from a Businessweek article about us from last year.

2) Secondarily, there also exists a movement to advertising where you can calculate an ROI. We’re moving from pay per click, to pay per action or pay per call. Compare that with throwing a million dollars at the Superbowl and seeing what happens.

Ed Martino

I have to disagree because my company (Sprint) sponsored the Superbowl! It depends on the industry. If you are in a big industry you have to make a statement, so you have to go with pro golf, the Super bowl etc. If you do not advertise with it, people ask why you aren’t in it. Such mass advertising is important.

Alan Kaufman

No one can afford TV. PR means hiring an agency. It’s best if you can get someone to develop relationships with the editors of blogs. You have to stay on top of people who can influence the influencers

CLOSING STATEMENTS:

Ed Martino

There is more in common between the old school and the new school, because it is an evolution from one to the other. Sales and marketing is fun and the interrelationship and interdependence between that and finance is important. Ethics is also very important. Ethics is everything. You need to have respect for your customers and your competition. We need to be ethical about how we do our business.

David Teten

We’re in the advice/education business. Ironically, there is a lot of advice out there in the world, but most people don’t absorb it and don’t follow it. They listen but don’t learn.

I encourage people to internalize the ideas that we’ve discussed here. I hope that people learned something that they can take home and incorporate into their sales and marketing strategies.

And as last words: A.B.C.—Always Be Closing.