Occam's Razor by Avinash Kaushik

Some of us have had opportunities to pitch our companies or services to clients. Almost all of us have had opportunities to sit through sales pitches from vendors and consultants. I have had the privilege of attending atleast 75 vendor or consultant presentations. It is amazing how often they turn out to be sad cases of hara kari.

Since very few vendors actually ask for feedback after their presentation, fewer still actually get anything even if they ask, here is my humble feedback on what to do right, or more precisely what not to do, in order to win that next big contract. If you think this is of any value to you I will accept tchotchkes in exchange. : )

[While it might not seem like it by the time you are done reading it, and you are a vendor / agency / consultant, this does come from a place of love – I want to give helpful feedback. While it might seem such experiences are an anomaly, they are not. While this might seem hard, I am sure you’ll agree large $$$ are worth an extra amount of effort.]

# 9 Manage your time efficiently: It probably took you a lot of persuasion to get into the building and make the pitch. Now you probably just have an hour or less to make the pitch. You probably have any where from five to ten client employees in the conference room. Please manage your time efficiently.

I am stunned that vendors have 30 slides and this is how the flow works 80% of the time: first five slides about the company’s greatness covered in the first half hour, then five more in the next twenty mins and then last twenty slides in ten mins.

This leaves no time for any decent understanding of your capabilities and no time for questions.

It shows a tremendous amount of respect for your client’s time and investment for you to cover all you wanted to and leave 20 mins in the end for questions.

# 8 Maximum of 12 slides per hour of time: This is a really hard one to do, even for me if I do a presentation. But I can’t think of a better way to force the evaluation of what your core value proposition is and initiate the kind of conversation you need to win the contract. This recommended number includes your intro slides and client list.

This number also encourages you to figure out what it is that your client really wants or cares about. It mandates a pre-presentation phone call / conversation with your “sponsor” in the client company to understand as much context, hot buttons and concerns as you can so that you can actually produce 12 slides that they care about (if you can pull it off cut a few of those slides and do a real living breathing demo).

I understand that this is a delicate balance because you want to tell them what you want to tell them.

# 7 Your client does not care what you think of yourself: A higher than preferred number of pitches start with the vendor “superstar” person (usually with the highest rank/title) spending the first 10 mins extolling their personal qualifications, organizations they are members of, newspapers they have been interviewed for, conferences they have spoken at and the fact that they have five horses.

No one usually cares. And you are eating into your limited time.

If you are important enough trust me your client has heard of you.

Spend 30 seconds on your background, three mins on your company history and offer to provide more information after the presentation if your client wants. Move on to the benefits you can bring to your client and how you can make the client insanely successful.

# 6 Be honest about your numbers (and in reply to tough questions): Vendor – agency – consulting pitches routinely involve stating how many clients they have, what the growth rate is, what the projected increase in head count is, how much share of market you have etc. This sounds obvious but be honest and transparent about your assumptions and context.

You definitely want to come across in the best light. But it is really lame to say you have 98% market share but not saying that it is market share in clients with only women employees or that your growth rate is 70% year over year but only for just one of your business lines or you have 9,000 customers but not saying only 12 are currently active, etc.

Remember that any half decent client will do many reference checks and they’ll find out and you’ll look bad.

We recently had someone walk in and in reply to our tough question “why did you lose your last three clients” the agency gave an amazingly honest answer and said what they are doing to fix the issue. You bet your bottom we are going to work with this agency.

# 5 Make sure you understand the questions: This is a small tip on numbers or questions in general from your audience. Wait until the question is asked, then make sure you understand it, if you don’t, ask for clarifications, then answer.

Two great benefits: 1) It shows clarity of thought on your end, that you ask for context and want to do a good job of understanding what is being asked. 2) It will make sure you answer the question correctly and you’ll look good.

Because typically the vendor thinks they can anticipate the questions, and they have done the pitch a thousand times they start talking before the question is even finished.

# 4 Don’t be a jerk: Most vendor presenters are sales folks, usually high up in their sales organization. In their little space they know everyone in the industry, have exceeded their sales quotas at every company and are Mr or Ms Slick Wille personified. This gives them a touch of (or usually a full coat of ) arrogance.

Resist the temptation to be a jerk, and if you don’t know if you are a jerk, give immunity to the person with the smallest job title you bring with you and ask him / her, they will tell you.

Vendors / agencies / consultants come in routinely and bad mouth their competitors, their rival methodologies, their rival tools, and their rival folks they don’t get along with etc etc. It is as if they can possibly make themselves look good just because someone / something else is bad or worse.

We had one guy come in recently and bad mouth all other vendors, a consultant we had been working with for months (and whom we liked) and he slammed two industry experts that are well regarded (who we have worked with in the past). All in a span of six minutes.

This vendor person was not stupid, he was really smart. But he left such a bad taste that we will never work with this company if we can help it (not now and not ever in the future in any place that employs me or any one else who was in that room).

Even if you think you are god’s gift to the industry (and it is true), even if you think you are right and everyone else is wrong, apply basic social skills and resist the urge and don’t be a jerk. Assume we, potential clients, know all vendors and people in the industry personally and will take offense.

# 3 Relentlessly focus on your unique value proposition: Logical recommendation after the above. Remember we don’t care about you, we don’t care how much of an expert you are. Throughout your pitch you should constantly and relentlessly focus on how your company, methodology, people, process provide a unique value proposition to us the client. Remember it is all about us.

Use real life examples, tie it to our company and unique business if you can, tell us why you are better than the other guy (without beating up the other guy), tell us how you can make us money, tell us how you can get us more customers and happier customers. Show a demo, give us reports, share industry comparisons, give us references.

At the end of the hour most people in the room will remember one or two things about you (because whether you like it or not you and your competitors have a large overlap in what each of you can do for us). Look at the deck you are pitching, is there one, or at most two, things that help you stand out. What is your unique and special value proposition?

# 2 Assume you are pitching to smart people: An astounding amount of vendors / consultants aim their pitches to the lowest common denominator, worse still they assume they are pitching to babies. This is wrong. Depending on who is listening to you it will appear to be either a waste of time, condescending, silly or that you have not done your homework.

Assuming you are presenting to smart people will ensure that your pitch is high quality, it will show differentiation and it will show tremendous respect for people you are pitching to. It will mean that you will anticipate tough questions and be ready for them (I have to admit a guilty pleasure is to pause a vendor in the middle of a deck, ask a very tough question and watch them get thrown totally off track, if they get back on track, and some do, it usually indicates quality thinking).

A small tip that is very effective here. Get your VP/CEO/Big Person With Title to kick off the meeting, set context and then hand off the presentation to your execution (smart) person. It looks rather silly that for every question that is a bit deep, even simple ones, the VP/CEO looks at the smart person (usually with a much smaller title). Just let them present the detailed slides, you’ll look good  and the presentation will go faster.

# 1 Remember clients don’t buy software / services, they buy relationships: Human beings don’t buy software or, worse, “solutions”. We are social beings, even in professional engagements we “buy” relationships. Sometimes it really does not matter how magnificent your software is (or for that matter how great you are and your accomplishments have been). Come prepared to deal with this.

While we are indeed buying software or service we will be dealing with your company and its people and tech support and email and all things human. Show that you will excel at the social part and be a great relationship for us to have.

This means being nice, this means bringing your employees we would want to work with, this means showing that our engagement will not be a bad first date, this means being charming and sharing real stories about how you have gone the extra step for other clients. If your client “likes” you, chances are that you will end up with a deal.

This of course means that if you get the contract you also have to deliver, but if due to any chances your software or service fails to deliver 100% or later there are bumps, the strong relationship will mean that the engagement will survive.

And as always here is a bonus recommendation…….

# 0 Under promise and over deliver: I worked for a few years at DHL in Saudi Arabia and this was an unofficial motto for us. Always under promise and over deliver, you can never go wrong.

The tendency in a sales pitch is to over promise (the answer to every “can you do this” is “yes”) because you do want to win the contract. But for a long term sustainable engagement you have to have something in the back pocket to wow your client. Promise to deliver the package before nine AM every day but do it at eight thirty AM every day and you have a customer for life.

I would love to hear from all of you as to what you think of this list, especially if you are a vendor. Is this helpful in any way? Do you already do this? Does this even feel real?

I welcome the same level of honesty as I have exhibited above (and if you want to post your comments anonymously that is ok as well for this post, I promise to approve all comments except spam for Viagra). Please share your comments.

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There are many good metrics that help us understand customer behavior on our websites. Conversion rate, page views per visitors, average time in website, average number of pages to purchase etc etc, and you can segment them. But sometimes they leave us hungry and unfulfilled.

I have not seen these two metrics a lot in off the shelf packages but I like them a lot because they can be deeply insightful about customer behavior, specifically in context of an outcome.  The metrics are “Days to Purchase” & “Visits to Purchase”. I am sure you've seen them used before, if you have not read on.

(I am using the term purchase here but there is nothing unique about ecommerce, you can use these metrics if your site exists to gather leads or get people to download pdf’s or for tech support. All that is required is a robust understanding at your end of what the “outcome” is on your website.)

Most of the current crop of web analytics metrics (KPI’s if you will) are very much session based. Not all but most of them. The “limitation” of session based metrics is that it presumes a “closure” in one session (one visit if you will). That is usually not the case. Customers visit your website, come back more times, depending on why you exist, and then maybe close the deal (buy, give a lead, get an answer, send your CEO a nasty email about how dysfunctional your website is).

These two metrics are “pan-session” metrics and since they accommodate for how customers really use most website they can be deeply insightful.

Ok enough teasing, here are the specifics (though I have to admit I am much better at this topic in front of a white board than a blog post, I ask for your patience because this is a bit complex)…..

Assumptions:

• Your website uses some kind of “sessionization” methodology. For the most part, regardless of if you use weblogs or javascript tags to collect data sessionization happens using cookies. Either via your web analytics tool or your web server platform. Both are fine.
• Your website sets both transient session cookies and persistent 100% anonymous “user_id” cookies.
• Like anything that relies on cookies it is optimal if you are on first party cookies to improve quality (it won’t eliminate error, just reduce it). [PS: If you are not on first party cookies I strongly recommend that you badger your analytics provider to switch you to first party asap, all the big boys/girls support first party cookies.]

Definitions:

• Avg Visits to Purchase: Average number of sessions from first website interaction to Purchase.
• Avg Days to Purchase: Average number of days from first website interaction to Purchase.

Why should you measure these kpi’s?

Most often what is lost in all our analysis is the fact that there are many different interactions for someone before they purchase. People come, they see, they come back, they see something else, they go read amazon reviews, they do price comparison and then for some weird reason even though you sell at a really high price they come buy from you.

Session based metrics (say all the off the shelf path analysis reports you see in your web analytics tools on the market today) don’t really illustrate this.

So as you run your affiliate marketing campaigns or your PPC campaigns or direct marketing efforts, what is the value of the first visit by a customer and should you pay more to get customers into the door because they have longevity?

One simple reason to measure these kpi’s is to get a true understanding of “how long” it takes people to buy from your website and is that behavior different across different segments of your website customers. If there is, you can exploit this knowledge to optimize your campaigns, promotions, other efforts to get the best bang for the buck.

How do you measure these kpi’s?

The analytics tools at our disposal simply don’t allow for this kind of sophistication in analysis so we use our data warehouse that contains all our aggregated clickstream and outcomes data. Perhaps your web analytics tool could allow you to do this (if so please do share via comments). We run SQL queries and here is the “query” in english:

1. Gather all the sessions for the last x amount of time (six months in our case, hence millions of rows, use oracle)
2. For each session the data you will bring in will depend on your website, I recommend: all cookie values, campaign values, pages.
3. Organize the sessions by their persistent “user_id” cookie value (often sites use shopper_id as a persistent cookie, just ask your web guys what the name of the cookie is, I am sure you have one)
4. For each “set”, as in #3, look for the session with presence of your “thank_you” (purchase) page.
5. For the first metric Visits to Purchase:
1. Take all the persistent cookie user_id’s for all those who purchased in a given month (say July 2006)
2. Look back in the data (six months in the above case) to find their first visit
3. Count of Sessions in the “set” between first visit and purchase visit
6. For the second metric Days to Purchase
1. Take all the persistent cookie user_id’s for all those who purchased in a given month (say July 2006)
2. Look back in the data to find their first visit
3. Count of Days in the “set” between first visit and purchase visit
7. Done, get a glass of champagne, you deserve it

What do you do next?

Now you have overall metrics that look something like this (all numbers obviously not real and your numbers will look different):

And…..

This in of itself is really valuable. If this data were real and for your website it would be thrilling to know that a full 81% of people convert in three sessions or less and most of them (62%) on the same day (!!). If you are the half empty kind of gal/guy, it is rather depressing that you are essentially getting just a couple of shots, in just one single day, to convert someone to a purchaser. The chances someone will buy go down dramatically after day zero (the first visit day).

You can obviously make the groupings of visits and days that make the most sense for your business.

What is even more valuable is to segment this data (is that not a good idea all the time!! : )). 

You do the simple one first. Segment by month and get a trend of the data. Are you getting better or worse over time? Is there a seasonality impact of these numbers (so in the dull month of July if people take their own sweet time, rather than valentine's day then you can do different things on your site)?

My standardize advice after that: segment by your core acquisition strategies (examples: affiliate marketing, “direct” traffic, PPC, SEO, referrers from blogs etc). You are going to get a Real understanding of customer behavior because most likely you’ll see something like this:

Wasn't that a lot of fun? Only to a geek like me you say? I’ll take that. : )

What actions can I take from these Insights?

As you begin to understand pan-session customer behavior you are actually getting into things beyond the surface, things that most web analytics tools don’t provide. This also means that if you get this far, you can develop an understanding that can be a true competitive advantage for you because this is hard to do, even for your competitors.

Actions you can take from these kpi’s could be:

• Optimize spending on key phrases for ppc campaigns, especially as you bid for “category” terms (with category terms you are betting on getting on the radar “early”, compared to brand key phrases, and if the number of sessions is small from above analysis that would be rather depressing, so put less value on category key phrases – this is a completely hypothetical example).
• Optimize your website content and structure for different segments. Clearly if I came to you and said you get one session to convince me to buy or I am out, would your website be the same? Probably not, you would throw away all the “extra” content and focus on the most powerful. Alternatively if the data indicated the purchase behavior was long stretched out over days/visits, you could / should provide more content since visitors seem to want more.
• Optimize “interruptives”. This is very cool, if your web platform allows it. If you know the point of “bailing” (say third session) for your customers, you could attempt to offer up a goodie in the fourth session or based on what they have seen so far show them something more relevant (this is your last chance) or ask for an email address for a future deal or whatever.
• Other smarter things you can think of but are failing me right now.

Ok so what do you think? Sounds interesting? Are you totally confused? Are you already using these metrics as standard operating procedure? Don’t agree with something above? Please share your feedback via comments.

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