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SWOT Team: Will CAN-SPAM Make List Brokers Obsolete?

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Despite the pervasive use of email marketing, it is still a relatively new kid on the block compared with other forms of direct marketing. Seemingly overnight, however, this wonder child of the online marketing world has gone from e-novelty to e-headache.

Inboxes bursting at the seams with messages and illegitimate offers have caused federal legislators to enact new legislation. With the CAN-SPAM Act newly inked, legitimate marketers everywhere are attempting to bring their practices into compliance. Would-be broker clients are scrambling to forge email-friendly relationships with prospects and customers to prove the legitimacy of their lists.

Despite marginal response rates using third-party lists, many companies have neglected building their own, in-house lists. Will CAN-SPAM make in-house lists necessary to stay in compliance, and cause list brokers to become obsolete? This issue's dilemma asks: Should legitimate marketers continue to work with third-party list brokers or build their own in-house lists?

Prefer to opt-out of this dilemma? Let us know what keeps you up at night. What dilemma do you take with you when you leave the office? Your peers would love to help. Write to us and ask our SWOT Team about your dilemma. Tap into the collective strength, wisdom and experience of this group. It works, and you could win a free copy of our book, A Marketer's Guide to e-Newsletter Publishing.

Revisit our previous dilemma—read below for your peers' best advice for dealing with a territorial sales team.


Unite and make a difference!

This Issue's Dilemma

SWOT Category: Internal Weakness

Should we continue renting from third-party list brokers?

When it comes to our email marketing efforts, we have always rented lists from third-party brokers. I understand that the new CAN-SPAM laws make the issues of compliance fairly tough on this group.

For our own security, we are considering building our own in-house, opt-in list. What has been the experience of other SWOT Team members in dealing with list brokers since CAN-SPAM came into effect? Should we make the switch, or is there a way to verify that the brokers we deal with are in compliance?

—Anonymous, Marketing Manager

Previous Dilemma

SWOT Category: Internal Weakness

What advice can you give on how to sell to CEOs of SMBs?

I have years of experience selling large and complex technology solutions to executives in Fortune 500 companies. Recently, I made the switch to working for a company that sells exclusively to companies with less than $15 million in sales.

I assumed that my background and experience were transferable and I'd be able to sell more in this arena, but to be honest I feel like a fish out of water. Focusing on the prospects' ROI is getting me in the door, but it's not closing the deals. Are executives of small and medium businesses really that different from executives in large companies? SWOT Team, what are your best practices for selling to the CEO?

—Anonymous, Account Executive, Software Company

Summary of Advice Received

Anonymous, we understand the challenge of applying your years of hard-earned Fortune 500 sales experience in a new market. Fortunately, all is not lost. It appears that with a slight mind shift, a new perspective and a little time honing your expertise, you'll be back on your way.

Selling to CEOs of small and medium businesses is a challenge for companies large and small. Your peers' advice had one theme in common: as in any relationship-based sale, it's important to know your customers and the idiosyncrasies of their industry.

David O'Malley, vice-president of sales for Treev, sums it up best with this:

I tend to steer my salesmen and their messages more towards a better understanding of the intricacies of each account. In other words, know thy customer!

Let's dive right in and take a look at what your peers had to say about selling to CEOs of SMBs:

1. Know thy customer, establish domain expertise.

2. Focus on short-term pain/problem solutions.

3. Sell them on top-line strategic value.

4. Make a personal connection with the buyer.

1. Know thy customer, establish domain expertise

Anonymous, even more so than with large corporations, it's important to take the time to fully immerse yourself in the nuances of each customer's industry and business. These efforts will take you further in establishing common ground and knowing how to position your offerings with the buyer, once you've gotten your foot in the door.

David O'Malley, who understands the challenge all too well, continues his comment with this:

I have cautioned my reps that strictly trying to appeal to the buyer with ROI will break the ice, but never seal the deal. Here is why... In a small to midsize firm, executives wear many hats and are usually on the hook for poor decisions that cost them financially (lost bonuses) or even threaten their livelihood. In a large firm, the executives are usually insulated by layers of management, executive IT steering committees, rules of engagement and legions of consultants, all whom can help shoulder the blame for a poor decision.

In our company, we take the time to become a domain expert and focus on a specific niche for a time, until we have established a thorough understanding of the industry. In our case, we sell to financial services firms, primarily banks. Regulatory issues and mandates constantly hamper banks and make their lives miserable. Efficiency and accuracy are important to these professionals as well as a strict adherence to the requirements of the “law du jour.”

That said, we make it clear that ROI is important and we can show them the way toward a sound investment, but above al, we understand their business. Our value proposition is a trusted partnership with a vendor in the know. To the small to midsize market executive, this is vital. We give them comfort, knowing that their mission-critical legacy data is in the hands of a vendor that knows his or her world inside and out and would react the same way that they would.

2. Focus on short-term pain/problem solutions

CEOs of smaller businesses tend to be more focused on the immediate and short-term challenges they face in their day-to-day business world. Helping an executive see the potential of implementing a long-term solution (with future results and return) can be difficult. Focusing on a short-term solution may make more sense, especially when you can show how it directly aligns with the executive's current pain/problem.

Colly Graham, a sales strategist with SalesXcellence, suggests you start by identifying the pain:

You have found yourself in a situation where the CEOs are more hands-on. In smaller companies, there tends to be a greater management emphasis on short-range goals as opposed to the long-term goals of larger corporations. CEOs of smaller companies are more interested in this quarter, this month, this week, today. ROI gets you nowhere, because you are not hitting on the buyer's pain.

What pain/problems can you solve for your clients within the short time frames specified. Have you uncovered the pain before the solution? To solve the problem, you have to know what the problem is and how your solution provides the best fit. What problems can you resolve for the CEO, recognizing one of their main priorities as results—achieved through efficiency and effectiveness? You need to rethink your sales strategy and develop a sales methodology that allows you to uncover the pain that your product resolves.

CEO of Complete Strategy Aaron Bare, who made a similar leap in sales, offers his success formula for selling to the emotions of the CEO and showing him or her how you can take away current pain:

I also made the jump from the Fortune 500 to the small to midsize companies with under $20 million in sales. I have found success in selling more to the emotions of the business owners. Find their pain; use ROI, and emphasize taking that pain away.

Small businesses are driven solely by referrals and credibility. They have to believe you will take that pain away, before they ever think about you seriously. They want to make sure the risk/reward ratio is good enough to put their necks on the line. For instance, while someone at a Fortune 500 company relies on logic (ROI) to make a decision and present justification to his/her boss, a business owner usually makes the decision based on personal attachment and engagement in the success of a presented solution. The bottom line, small to midsize companies want solutions and need to have their hands held.

Kuldeep Singh, sales and marketing manager of Samtel India, presents these four steps for going from problem identification to solution offering:

SMBs are entrepreneurial at heart. They try to look beyond ROI, and make decisions based on their current focus area and stage of business cycle. For example: an SMB focusing on growth will calculate its expected business return based on different factors than a business focusing on milking a “cash cow.” As such, you may find the following four sales steps helpful.

  1. Problem Identification: Try to probe by asking open-ended questions about the problem/ challenge they face in their business environment.

  2. Impact of Problem: Try to assess the impact of the problem on the business, monetarily and culturally, in the short term, and over the long term. Also at this stage, try to understand their decision-making process. Asking directly about how they make decisions is the best way.

  3. Need “Pay off”: After identifying the need and decision making criteria of the prospect, alter your presentation, if necessary, to match the customer's way of thinking and decision-making process.

  4. Offer Solution: Offer your solution in alignment with the logical way that your customer thinks.

3. Sell them on top-line strategic value

Bottom-line cost-savings or revenue-generation is a common goal for every business and is greatly emphasized in sales strategy. However, providing your prospects with a tangible view of the top-line benefits can also be helpful. Can your product increase productivity or provide specific and measurable strategic value in the market place?

An anonymous SWOT Team member provides this insight into linking your software to the strategic goals of the buyer, as a way to close more sales:

SMBs are different than large companies in that they usually don't have a lot of leeway: support staff is at a premium and HR departments often barely exist. The CEO may also have multiple roles—sales, marketing, or HR. So instead of going for ROI, which is a great idea but has little emotional value, sell them on strategic points, such as:

  • Using your software lets them compete in the cutthroat world of small businesses, or

  • Without your solution, their tenuous profit won't be around next year.

If you can link it successfully, you'll close sales in no time.

Consultant Claire-Juliette Beale recommends a good read on the subject of strategic selling, and offers words of wisdom for directing your sales efforts:

First, I highly recommend you read “The New Strategic Selling” by Stephen Heiman and Diane Sanchez (Warner Business Books). I think it will be of tremendous help to you. Second, I have conducted business development for a software company, selling to executives in global companies as well as in small and medium-sized enterprises in the not too distant pas, and would like to offer a few questions/tips for you to consider.

  1. Selling to SMBs is not any easier than selling to global companies. It is somewhat different, but to win a new account and then grow that account, you do need the same qualities (strategic orientation, persistence, etc.) and hard work. While the CEO is the “economic” client (he usually holds the purse strings) and you need to sell to him, I doubt he is your real client. The real client(s) is (are) the person(s) evaluating the solutions and who will be responsible for the implementation. Even in a small business (unless it is a boutique), the CEO delegates this, and real decision-making may come from these people (managers, staff or an external consultant). If they are sold, he will be easier to convince.

  2. Think of the indirect costs the CEO's company will have to bear and the change implied by switching to your solutions. While Fortune 500 companies often have internal resources or use consultants to help with the management of change, smaller companies do not. Change is usually not welcome. There needs to be a clear strategic advantage or immediate need to justify the switch unless you can convince your prospect that change will be painless... and back it up with some success “stories” with businesses of a similar caliber. (You may want to have some references handy).

  3. Focus on the client's business and issues first, and the other clients within that business (not just the CEO). Then talk about the results (ROI or other) that will most matter to them and what their personal “win” is going to be. In other words, just like for large accounts, build internal support for the sale.

  4. While you may think you have a lucky break when a non-tech-savvy CEO is seduced by the “concept” of what your software will do for him and wants to buy without having consulted the real users, reconsider. You will have a sale, but very likely the solution will not be implemented and/or [will be] poorly utilized due to the real cost of the deployment and resistance to change. You'll end up with no basis for business development and the client will end up quite dissatisfied.

Familiar with this dilemma from both sides of the bargaining table, Dick Gray, president and CEO of Xtension Technologies, offers a compelling example of the value of focusing on the top line:

Since I do some selling in this market arena, and am also a CEO of a small business, I have the luxury of seeing this problem from both sides of the table. In business, to be effective, you have to do the right things. To be efficient, you have to do things right. Many salespeople today focus on the bottom-line mentality of their CEO prospect, when they should focus on the top line of the balance sheet.

Look for ways to help a company and reduce their concern over how long the product or service has to be in place before it pays for itself. CEOs of small businesses are closer to problems and situations than CEOs of large organizations. They have an interest in ROI, but they have more of an interest in how a product or service can:

  • Make their employees' jobs less stressful

  • Make communications with and the buying process easier for their customers, or

  • Realize a reduction in the amount of paperwork everyone has to fill out and eventually file somewhere

A good example is a manufacturing company that invested more than $200,000 in new front- and back-office software and upgraded their computer hardware and server to better serve their customers. Sadly, no one focused on the bottleneck in their shipping department. The company shipped over 1,000 packages a day, five days a week. Each shipment took four minutes to tie all of their picking tickets, packing slip and label forms together in one package, label the carton and insert the packing slip inside the carton. A redesign of all of their shipping documents and shipping label into one comprehensive form/label combination reduced the process to one and one half minutes per carton.

The labor savings is enormous over a full year's use, but the sale went over because the CEO saw his employees' jobs would be easier and less stressful, his customers got a complete package of information in one location on the carton, and his company would gain a side benefit by eliminating the need for employees to field customer questions about what was shipped and where it was.

4. Make a personal connection with the buyer

Appealing to the entrepreneurial and more emotional side of your buyer opens the door to building a personal connection with your prospect. Show the company you care about their business, not just the sale.

Michael Harper, a district manager, believes you've already answered the first part of your question, in that “the message that opens the door to your prospect is not the same message that closes the sale,” and offers this advice:

ROI will get you in the door, that is, secure your appointment. But it usually takes more than numbers (ROI) to close. In smaller companies, it's valuable to find the personal connection or “win” for the people making the decision. Your prospects buy on emotion, that is, the pain associated with their challenge(s). Eliciting that pain is the key to selling for you. And that generally boils down to what questions you ask, and how you pose them.

Many folks write about this: Rackham, Spin Selling, Sandler, etc.... You are probably asking the foundational “what” questions to complete your ROI. Just take it a step further in those sessions to learn how that impacts the prospect—personally. It's kind of like a ladder of inference. They'll tell you their priorities, their pains, and what “better” looks like for them.

You've sold us on the solution, SWOT Team—thanks again!

We did our best to provide a thorough overview of your responses to this timely topic. All of the advice we received was insightful. Thanks for your participation. We appreciate it!


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Hank Stroll (Hank@InternetVIZ.com) is publisher at InternetVIZ, a custom publisher of 24 B2B e-newsletters reaching 490,000 business executives.

Yvonne is a “customer engagement coach” and President of EVE Consulting, helping companies achieve sustainable market leadership through the power of customer engagement.

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