October 14, 2009
An FT article highlights research from NYU Stern Business School that Hedge Funds misrepresent facts. Obviously the researchers have not ever had a sales job in their lives. Facts are frequently not just misrepresented but are frequently made up by all sales people, when pitching to clients.
One of the reasons of the Great Financial Crisis seems to be that as far as finance goes, people have forgotten the basic injunction of caveat emptor (let the buyer beware). If more people understood that a majority of people working in finance are simply sales people who are selling you a product, whether it is investment Hedge Funds or buying a Home Loan. Unlike other industries viz. manufacturing or construction or Hotels or anything else, finance simply allocates money around and there is only so much that you can extract in value by moving money around. Then the only way to generate profits is by selling and charging more.
It is important to remember that when dealing with financiers or bankers of any kind.
September 12, 2009
Dhamesh Shah has a great bunch of insights on running a SaaS startup. One aspect that he does not really cover in great detail is how do we acquire new customers. It’s great if you are a Guy Kawasaki or have been funded by Y Combinator where you automatically get a reasonable launchpad and can expect some link-love from established presence in the community. But what about where you are launching something which is bootstrapped and you need to acquire customers. Here are some of the ways that you can acquire customers.
- Make sure that you have your keywords set-up correctly, read Google Webmaster’s guide for SEO. It’s a great resource that gives good information and even if you are engaging an external SEO expert, it is well worth your time to understand how Search Engines view your site.
- Build a presence on the web by writing and submitting press releases, blog posts related to your topic as well as participating in discussion forums or on blogs to raise the profile of your product.
- One effective way that I have found regarding raising the profile of the product as well as getting initial customers is to create a survey and send it out to the demographic you are targeting. It’s a good low cost way of getting feedback. I have used Survey Monkey for this and it was very effective in the Customer Development Process.
- If possible run a contest with some kind of free giveaway, popular things to give away are Electronic Goods, complementary services related to the software or even something simple like a T-shirt works if it is well designed and unique.
- Use Google AdWords to drive traffic and acquire customers, an investment of as small as USD 5 per day can generate enough traffic for you to start getting a sense of how the product is being accepted and allow you to move to the next phase of tweaking the product.
- Make sure there is a referral bonus for getting new customers, for your existing ones. Member-Get-Member or Viral marketing is one of the most powerful mechanisms of growing your customer base. Make sure you make it easy for existing customers to invite their peers. See Seth Godin’s talk on Viral Marketing.
- Finally make sure that you provide a Free Trail Period
These are just some of the more cost-effective mechanisms of acquiring new customers and I hope you will benefit from utilising these and growing your business.
May 3, 2009
The economist writes Cutting Back is Hard. A quote
A major source of profitability is client services, where employees’ contacts are invaluable, so retaining staff is crucial to survival. The valuable workers can actually go elsewhere, even now.
Now this may have made sense in the past where the Private Wealth Management Guys were selling all sorts of securtised products and banks were essentially hedge funds making money hand over fist over extremely loose monetary policy. But, going forward I don’t see how this could be true. These people were retaining clients because overall all assets were going up in price and so showing a good return was simple and even if the asset class underperformed you could talk it away by saying that the asset was of extremely low risk.
I would think let these relationship managers be compensated like any other sales people where typically the commissions that a person can earn are capped. Most companies in the real world have retrictions on sales compensation, I see no reason why it should not be the case in finance.
It was easy for these people to go out and sell products in rising market, let’s see how they fare in a downturn. Sales is easy when you can promise a full money-back guarantee, have a brand name behind you and essentially rising value of the product. These are not normal circumstances in most businesses, let’s see these people survive selling to sceptical customers, products which have a serious chance to lose money and no AAA-bought insurance and then reward them appropriately.