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The
problem
Acugen Software
of Nashua,
NH has been developing semiconductor test software for PC's and workstations. Their
software is known as Automatic Test Generation, or ATG. It automatically creates
test vector patterns for testing semiconductor chips called PALs (programmable array
logic) and PLDs (programmable logic devices). An average selling price above $10K
put it firmly in the big-ticket league of capital budget goods normally entrusted to a
direct field sales force. At the same time, that price was not enough to support a
field organization.
Competition
The market
was controlled by a Fortune 2000 corporation, Data - I/O, selling software alongside
their logic programmers and instrumentation. Data - I/O had a direct field sales
force of over fifty people. They were the established name and a safe buy, even with
product deficiencies.
New
technology
With
new technology, Acugen Software created a
superior product and began to sell a few units. The founder hired a salesperson.
Results were poor and sales came at the expense of a significant fraction of the
entrepreneur's time and energy. They parted and the President became the sole
employee again. While they had a steady stream of raw leads, the close rate
(conversion to purchase orders) was completely inadequate.
Technical superiority alone
had utterly failed to gain Acugen Software either sales or
market share.
My assignments
Peter
de Bruyn Kops asked me to jump-start Acugen, and
simultaneously brought in operations staff to implement my ideas.
Overcome
constraints
While he charged
me with forging an engine of rapid growth, we faced constraints:
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Constraints |
| Capital |
No outside
capital to fund expansion because the entrepreneur wanted to retain control. He did
not want Venture Capital. |
| Margin |
Not enough
money in the product to support a sales force. |
| Time |
No time to
find, train, and develop a sales force to a productive level. Many sales
managers believe that a new salesperson, who already knows how to sell, becomes fully
productive only in the third year. After all, the new job, new company, new
territory, new product, and new market require time to get up to speed. That means
that the new salesperson is relatively unproductive in the first year, just when the
entrepreneur (and the investors) would like the company to take off quickly. |
| People |
No track
record of successfully hiring sales talent. |
| Entrepreneur |
Less of the
President's time available for sales, or for sales supervision. He focused on
Acugen Software's technology
to maintain their competitive advantage. |
| Competition |
Entrenched
rival with a 50-plus person direct field sales force. |
Rise above
inadequate traditional
selling
 |
A more
pervasive problem, beyond Acugen Software, is that
traditional selling has been inadequate. Two steps have marked a conventional
opening response to a raw lead: Step 1
Mail a standard literature pack (with everything in it).
The
normal weighty lit-pack frequently overwhelmed prospects so that they do not read it.
I have given this literature dump the name "thud," for the sound it makes
when it hits the "to be read" pile. It is normally never read.
That
"one size fits all" package has sent the same literature to all prospects, no
matter what market segment they might be in.
Step
2 Send (raw, unqualified) leads to the salesperson for follow-up.
Many sales managers
believe that less than 30% of leads are followed up because raw
leads are, by definition, unqualified. Hey, why would the salesman
waste his time with unqualified leads? They typically cry,
"Send me qualified leads!" |
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