Sunday, November 29, 2009

Awesome Salespeople

Lately we've been working on bringing on board salespeople.

I've been chatting with a few people from different companies that are at the front line ie. they're the salespeople bringing in the cash.

It's interesting how companies motivate their staff. One case I came across that was inspirational for me was my friend that works for a large printing/document management company. Over 80% of my friend's pay is in commission payments.

It makes me wonder why it's been so hard for us to find salespeople that can be motivated by commissions. I've been told that great salespeople are motivated by the challenge of performance-based pay and understand the concept that they will earn more when they deliver more for their employers.

My friend is obviously a great salesperson and is able to deliver month after month of increasing sales. I guess only a salesperson that is awesome at their job is motivated by performance-based pay - since they know they can earn a lot of money. For those that whine and complain about being on commission, those are the ones that can't sell and eventually get fired.

As my friend very bluntly put it:
"If I'm on salary, then a bad month for sales is a bad month for sales; if I'm on commission, a bad month for sales means I don't have enough to pay my mortgage."

You always need to see the needs and psychology of both parties to the deal - in this case it is our company and potential salespeople. We want sales, dedicated effort and minimal up front cost. They want more initial up front security (base salary, contract, etc.) and a floor to their downside (so that even if they don't perform for sales it can't be so bad).

In a start up company you have no room for dead weight, if you have salespeople that have the above characteristics: can't perform, are taking your base salary for granted, and whine and complain about being on commission - get rid of them.

Thursday, November 26, 2009

There's Still Time!

Yes - that is definitely very encouraging to hear from a fellow entrepreneur who is further down the road than I am.

I'm 2 years into building my business to take over the world (really, think big right?) and it's great to hear that other entrepreneurs have struggled along the same path. In fact, the main idea of the session was that there's still time for entrepreneurs who are just starting out - it takes time to build great companies.

So here's some context for this post: I attended the Vancouver Enterprise Forum event 2 days ago and the speaker for the event was Mike McDerment (CEO and Co-founder of FreshBooks).

There were a couple things that stuck with me from his talk since some of those points are especially relevant to me right now.

1) Rebranding made a huge difference for their sales. They used to be called 2ndsite. Mike himself admitted that the name didn't do anything to differentiate themselves.

here's a reflection point for your own brand...if you told somebody your company name, would they know what you do for a living and does the brand name differentiate you from the other providers of the same product/service?

The reason I ask for both of these things is that if your company is PLUMBING COMPANY, it really doesn't differentiate you from the other plumbers. How are people supposed to refer you to others?

"Hey I know this PLUMBING COMPANY does great work." Do you think the potential customers can find you easily online with a name like that? It will have more results returned as when you look up Michael Jackson on Google.

2) Do you need Venture Capital? It made me think about my own business model. We've been on the lookout for funding and were actually pretty close to signing with angel investors in the past. Here's the thing, PeerFX is labor-intensive and actually does not require a huge capital investment up front. Even if we were to grow, the speed of growth would be dictated by sales coming in. Ie. More sales = need for more salespeople, customer service, servers, etc.

This means that we will be able to survive with a constant influx of operational capital support from the government, friends and family rounds, etc. Some up front cost that we will incur are marketing costs to get the word out, but we find that as start ups, the best way to grow is through word of mouth. These customers usually bring recurring transactions, which is what is needed to keep a business afloat.

Reflection point: Do you own a product/service that generates recurring sales? Ie. Do you sell refrigerators, where people buy one every three years? Or do you sell online software, where people pay a fee to use it every month? (of course another factor here is the durability of the product, where refrigerators is a durable product...)

How would that drive your customer service? For monthly recurring sales, it's likely that you will have to spend time getting in touch with your customers every month to make sure they know you're still around (you always, always want to be top of mind).

Anyway, there are more things I learned from the event but that's all for now - will continue this tomorrow. Stay tuned.

Monday, November 23, 2009

What are You Selling? Increasing Search Convenience is a Google Thing

Got this passed along to me by my advisor.

1-800-goog411. (a.k.a. 1-800-466-4411)

Google is offering a free service right now that allows you to search and connect with the company you're looking for by calling the number and answering 2 questions.

They ask you for City and Province and you answer ie: "Vancouver, British Columbia"
They then ask you for the Business Name or Type of Service ie: "Avis Car and Truck Rental"

It will tell you that it's connecting and Avis picks up the phone - extremely convenient service and I'm going to start using this.

Google's development efforts have focused on making search engines more efficient, and with this new service, they've just made searching even more "mobile". We don't even need to manually type in the phone number or go online to find these places.

Technology should make life easier and this application appears to do that pretty well. So what are you selling? To be successful you have to make sure you don't lose focus of your core benefit. For Google, it's all about making Search efficient and convenient. What's your value proposition?

Friday, November 20, 2009

Exclusivity as a Marketing Tool

Making something exclusive seems to make something more desirable.

In my opinion I think a lot of marketing tactics are based on psychology - how can it not be when most of the buying decisions that we make are emotionally driven? Or the fact that marketers like to speak of segmenting by psychographics in addition to demographics?

It seems to work for some businesses though, and here are some examples:

  1. Exclusive by-invite only events that are limited to X number of attendees (and the attendees have to apply to get selected to attend) - usually these fill up fast. There have been a few business conferences that are like this, like the Impact National Conference.
  2. Online eCommerce websites that have sales for brand name designers at a discount price - membership is by referral only. I remember seeing a company that does that when I went to the Online Retailer Conference. They went from zero to close to a million accounts in less than 2 years.
  3. Car manufacturers that design a model with only 10 of those cars available in the world - usually this can drive prices through the roof since the product is so limited.
So does this mean if you only produce 10 units of our product you're going to be able to sell it for a million dollars a piece. Nope. That's not the only ingredient to make your product sell; your product needs to deliver after the customer buys it.

What I mean is, your product can't suck.

Imagine lining up for 2 days to buy this exclusive, limited edition product only to find that it doesn't deliver on its proposed benefits. Or ever attend an event that had tons of buzz but didn't turn out to be as great as you had hoped?

So yes, exclusivity may work only if your product is just as awesome.

Thursday, November 19, 2009

Everything's OK

I woke up this morning to a couple emails asking if the site is OK.

Regarding my post from yesterday with my hosting service provider...yes, PeerFX has been running smoothly thanks to our developers that took smart precautions.

So in conclusion, everything's good :)

Wednesday, November 18, 2009

Declining Clients that have a High Cost to Serve

Many of you are probably reading this post thinking that it's my company declining clients that cost us too much money to serve.

I actually meant it the other way around - we were declined hosting services because our hosting company didn't charge us for the 90 hours they spent fixing a problem that they caused. They saw that we cost them too much (well if they didn't mess up in the first place we wouldn't have cost them anything more than they expected).

About 2 weeks ago our server was down because of a hardware meltdown. I did mention this in a previous post. We keep backups both at the external host and also internally with our developers. Let's just say it was extremely fortunate that our developers helped us do that (thank you Boris!!! You are our savior!!!) and to our clients - I reassure you that all your information is safe and secure on our backup servers.


We were in the midst of putting together a meeting with the hosting company to get more detail on what happened and discuss a compensation package when we got an email from them indicating that they no longer "desired to provide services to us" and that "I have had my team work about 90 hours for you since the issue arose for a small monthly fee but we did this without complaint or threats of billing you overages typical with any other provider."

I definitely got the sense that I had done something wrong instead of them screwing up the server. I paid for server hosting services and expect it to work. So, if YOU screw up, and need to fix stuff, I am the one to blame? There is no logic behind this since it was written in contract that the down time is a MAXIMUM of 47 MINUTES per year. In our scenario it was more like that multiplied by 100 (yes, really). So, I'm pretty sure this constitutes as a breach of contract, and I get an email saying that you don't want to provide services to me and that I should be thankful you didn't charge ME extra?! My apologies for this post bordering on a rant, but what would you do if this happened to you?

Should all the businesses purchasing hosting services out there be equally afraid that they may suddenly be charged extravagant fees if their server hosting providers fail tomorrow?

If you're reading this and you are a hosting service provider...what would you have done to regain the trust of your customer instead of ending on a sour note?

Tuesday, November 17, 2009

Brand Transitioning

The past couple weeks we've been gearing up for the brand transitioning that's going to happen over the next 2 months. I can say I'm liking the new look, which is much cleaner, has larger font and has incorporated much of the feedback that we've gotten from our awesome early adopters.

Learned a few things about designing along the way that I thought I would share with my fellow entrepreneurs:

1) Before you even think about the layout of your website, choose your colors right. Our brand started out with two pretty catchy colors: lime green and creamsicle orange. When we launched the website, we launched it with a Beta group, consisting of a younger customer base that was willing to put a thousand or a few hundred at a time through the system to help us show that the concept worked.

2) Expect your colors to evolve. When PeerFX launched to the public, the heavy users were people ranging from 30 all the way to 85 years old. This meant that the lime green and creamsicle orange was too hard to read (and so was the small charcoal font). I loved the brand but things had to change in order to cater to our customers; people that actually PAY for our service.

3) Expect your layout to evolve. If you initially start with a 3 column page or a horizontal top menu bar, you can expect that to change as well. It's really amazing how YOU think everything is so clearly laid out while your customers are emailing/calling you day and night asking you where everything is on the website. If you thought your site is easy enough to be used by your grandparents, think again (or actually get them to test it, which we did).

4) Change Takes TIME. Even though our awareness isn't huge right now, there are still customers who are used to seeing the lime green and orange. So if you are changing your website layout, font, colors and content....try to phase it in so existing customers don't get confused and think they've landed on the wrong website. We're doing it step by step, sticking with the primary colors in the first transition and making the layout cleaner and the font easier to read.

The new design will be wrapped up end of this month and will be integrated in early December. Stay tuned for the latest news here!

Monday, November 16, 2009

Market Volatility

I'm sure that everyone knows about the crazy volatility that's been going on in the currency market recently for the CAD and USD.

Of course, being in the business, we have to keep a close eye on the rates, and just this morning there's been a 1% change in the rate in less than 20 minutes. Back in the day the 1% change usually happened over the course of one day.

This creates more opportunities for people to earn big money. Just imagine.

Selling $100,000 USD at 1.055 (high point over the past few days) = $105,500 CAD


Sell the $105,500 CAD for USD at 1.0426 = $101,189 USD

You just earned $1,189 USD over a 2 days! Trust me, we have had clients call us up asking if they can do that with our system. The quick answer is yes you can - however, you will need to consider the turnaround time, since we do spot foreign exchange and settlement, and it takes 3 business days for the entire transaction to be completed.

Now in the example above, it looks like easy money, but it also means you have to sit there in front of the computer the whole day; not a hard task that's impossible, just time consuming. You also need to be able to predict which direction the rate's going to go; if it was really THAT easy, everybody would be millionaires doing this.

Sunday, November 15, 2009

Retail Marketing in our Daily Lives so fascinating.

Even my brother knew about the Jimmy Choo X H&M shoes. He even googled them and told me that people were reselling the shoes for a much price; kind of like flipping houses but now..."flipping shoes".

I'm sure all female readers of this blog post know about Sephora (and probably all the guys do too since they wait outside for their female friends). They had a weekend sale with 20% all purchases for their V.I.B s (very important beauty). The checkout line was continually at 20 people, even my mom bought something. With this 20% off, a lot of buyers actually ended up buying much more than what they would normally. Hooray for sales!

Wednesday, November 4, 2009

Technology - the "never have only one of anything" principle

So I wanted to take a look at our website before I went off to bed last night and discovered that the PeerFX website was down.

Weird, I thought. The contract guaranteed 99.9999% of the time the site would be up (this is a reminder for all of us to look DEEP into the fine print, I'm sure somewhere in there is a provision that says they will base this on a "best efforts" scenario). So I thought, oh well, it must be that there's this short lapse in our server hosting; woke up this morning and went online to check again 6:45am. Still not up.

I'm definitely concerned now - since our business comes in usually during the morning hours. My biz dev guy should be even more concerned because he's on the hook for a sales quota and burning up his entire day with a down website.

I send a couple emails and call the owner, letting them know that this is essentially a whole business day gone down the drain for us. Of course I get the usual apology and the "whole team is on it" explanation but it's been another 2 hours now and still nothing. Well, I guess not nothing, since we know that the interruption is caused by hardware breakdown. BAD. Just form a customer perspective, a hardware breakdown seems really bad because it takes much more time to move our stuff in the box over to another one and get the system back up again. Nothing really has been done to reassure me of an actual progress timeline as to when the site will be up again, besides the guarantee that it will be back up as soon as humanly possible.

Hopefully that's in the next couple minutes.

This is a point in time where I wish I had a backup server ready to go for the front-end site at a snap of my fingers. Another lesson learned on the "never have only one of anything" principle.