Thursday, September 29, 2011

Good Sales vs Awful Sales

Please note: A variation of this blog, targeted towards franchise candidates and titled “Buying a Franchise Shouldn’t Feel Like Buying a Car,” originally appeared on the Franchise Business Review’s website.  You can read it here.


I bought a car this week from a dealership for the first time in many years.  After multiple trips, dealings with several people and countless headaches, I came to the conclusion that there are two types of sales – good and awful.  And this translates well to the start-up world.

The point of sales is to solve a problem.  The buyer has a pain, and the seller can cure that pain.  It’s actually a beautiful concept.

“Good sales” reflects this problem-solving mentality.  The buyer and seller agree on a transaction that is mutually beneficial and everyone walks away better off than before.

“Awful sales” occurs when there’s a breach of trust in the inherent “mutually beneficial” aspect of the transaction.  For the seller, the goal is not about solving the customer’s pain but rather getting as much from them as possible.  Which, in fact, usually adds to the pain. 

Most of my car experience was of this “awful” variety.  Ultimately I got the car I wanted at a price I wanted from a decent guy, so I’m happy with the outcome, but the game was overly tedious and left a bad taste in my mouth.

As I went through this process, I thought a lot about my experiences at TGA Premier Junior Golf.  I recalled those initial years when a sale could determine whether or not we made payroll.  And I thought about all of our franchisees who go through this same reality as they start their business. And I reflected on my current role as both the head of franchise sales and franchise training.

For a young company, initial sales are critical.  So it’s natural for entrepreneurs to do everything they can to secure a sale and get as much from the customer as possible – a la the mentality of several of the car salesmen I dealt with.  But this is wrong.  Initial sales are important, but so is sustainability.  And you will only have the latter if you’re creating mutually beneficial agreements with your customers.

At TGA, we established a solid system of checks-and-balances with our franchise sales process.  I’m responsible for selling franchises, but I also have a critical relationship with each franchisee long after a transaction takes place.  So, while I’m providing training and support, I’m there when rubber hits the road and the things I said/did pre-transaction come to fruition or not.  This gives me a strong inherent interest to create mutually beneficial situations.  I encourage all companies to set up control mechanisms like this. 

Contrary, most sales people are in situations where the relationship severs at the point of transaction.  Systems like this create the environment for “awful sales” because the salesman doesn’t have to worry about the ramifications of his actions.

So, if you’re involved with sales – which all entrepreneurs are – please focus on the “good” variety and make a commitment to solving problems as opposed to closing deals.  You may lose some short term sales but you’ll gain long-term relationships and ultimate prosperity. 

And as customers, we decide who we buy from so let’s make a point of opening our checkbooks for the good guys. 

If we all do this, we’ll sell and buy solid vehicles that do a great job of navigating, driving and supporting us on our various journeys.

Tuesday, September 20, 2011

Are COO's Really Needed?

Mark Suster wrote a blog last week about the role of COO's in startups and basically argued that they're not needed. You can read it here. He got such a strong flood of opinions in response (check out the comments) that he wrote a follow-up this weekend, which is here.

As a COO myself since 2006 of what for many years was a startup (and some could argue still is), and as an avid follower of Suster's blog,I found the discussion quite interesting. I don't want to argue the merits or lack thereof of Suster's comments but rather touch on a bigger issue. The one that I think Suster was really getting at.  And that is the role of building a management team at a startup.

It is well chronicled in the annals of entrepreneurship that success of a company is determined by the management team. Great ideas come and go, strategies change and competitive landscapes shift. These are all things that are inevitable. Successful companies aren't the ones with a great start out of the gate but rather the ones with the personnel to manage this ever-changing path and stay a step ahead of the others.

I interpreted Suster's point as being that it's important to have razor-sharp focus with your employees and ensure that investments in employees are producing maximum returns.  His assertion is that COO's are like Chiefs of Staffs to the CEO - and in a startup, is that really necessary when you need folks focused on sales and marketing, product, engineering, business development and finance?

I agree in principle with Suster's point while at the same time defending my title of COO as being accurate.  In a young company, all employees wear several hats and mine include corporate strategy, franchise development and operations management. COO fits that job description better than "VP of Sales or Franchising or Business Development." And I think that’s the thing with the COO title – there isn’t a clear-cut job description and the roles look differently from company to company.

So are COO's really needed? Well, it depends. When it comes to your startup, I encourage you to look hard at the duties you need as opposed to hiring based on preconceived notions of the titles you need. Then hire accordingly.  Some of you may need a COO while others may not.  The key is to invest in employees who have job responsibilities that provide the greatest return to the company. And at the end of the day, titles within a startup are mostly inflated and don’t make a lot of sense anyways. It’s the job function that counts.

Given the importance of management teams and the reality of limited funds and resources at a startup, it's imperative that you get your initial hires right. That, I think, was Suster's point ... And as a COO, I agree with it 100%.

Thursday, September 8, 2011

PGA Fall Expo & Golf 2.0

I found myself in a weird sort of dual time capsule at the recent Fall PGA Expo in Las Vegas and it was an interesting experience.

On the surface, this looked like every other Fall PGA Expo I’ve attended.  It was small – a fractional size of the Orlando show in January – and the vendors were from the same breed of decades-old golf companies.  There were the equipmenteers, the gadgeteers, the fashioneers and the suppliers.  A few interesting things caught my eye, but for the most part it was the same old stuff.  And there were more people selling than buying.  It was a great symbolic snapshot of the golf industry.

Below this surface, however, something special was happening.  There were murmurs and words and plans of change to challenge the status quote in a real way.  It’s called Golf 2.0. I’ve been on record as believing that golf needs fundamental and significant alterations to the current model in order for the game to grow – and while little on the showroom floor represented this, Golf 2.0 does

The PGA of America recently announced Golf 2.0 as the industry’s answer to a recent Boston Consulting Group study that confirmed what those of us in the industry already knew – golf in the U.S. is a shrinking business.  The initiative has three core strategies – 1) Retain/Strengthen the Core; 2) Engage “Lapsed” Golfers (of which there are supposedly 90 million with 70% interested in returning); 3) Drive New Players.

You can read a comprehensive article about BCG’s study and Golf 2.0 in this month’s digital PGA Magazine, located here. 

PGA President Allen Wronowski had a great quote that encapsulates the initiative and why I like it:

“We need to make golf more welcoming and more relevant to women and minorities.  We need to overcome the misperception that golf costs too much, and that it has to be an 18-hole experience.  Golf is such a fun game that is ideal for families, so we now have a great opportunity to attract millions to our game who have expressed an interest in playing.  But we have to change the way we run our businesses to make that a reality.”

Amen.  I support this plan and hope to be a part of it at TGA Premier Junior Golf.

As entrepreneurs, we know that success with a new initiative has less to do with the plan and more to do with the execution, and execution comes down to the management team.  I applaud the PGA of America for recognizing this and recruiting Darrell Crall, a man I respect and admire, to lead Golf 2.0.  I’ve known Darrell for several years and couldn’t think of a better person in the industry to spearhead this initiative. 

Usually a great leader with a strong plan executes well and produces significant results, and I certainly hope that’s the outcome here. 

If you read through the Golf 2.0 report, you’ll also see that there are many opportunities for entrepreneurs to capitalize on the shifting landscape the golf industry will undertake with these initiatives.  I look forward to exploring some of these opportunities on this blog.
Good luck to Darrell Crall, the PGA of America, PGA Professionals and all of the entrepreneurs who will hopefully make Golf 2.0 a huge success.