From time to time I’ll profile remarkable companies in this blog... remarkable in terms of market leadership, profitability, business practice innovations and the like. Blackboard, Inc. (NASDAQ: BBBB) is one such company.
Here’s some of what’s noteworthy:
• 32% increase in quarterly revenue in Q4 2007 over the same period in 2006
• Revenue growth came from licensing, professional services and hosting services—so nicely spread across the business
• Total revenue for 2007 was $239 million, which is 31% over 2006
• Income was $12.9 million, compared to a loss in 2006
• Higher-ed customers continue to grow nicely
• International and K-12 growth are both solid
Outside of the recent performance of the business, over the past several years they’ve built a remarkable leadership position in the US education market—particularly higher-ed. I don’t have all the numbers, but it’s been suggested to me that they may have upwards of 80% market share. Growth has come organically through sales performance and a product that has been improved. And growth has come inorganically through acquisitions; most recently Blackboard completed the acquisition of The NTI Group, Inc. Finally, it’s noteworthy that the founders are still running the business.
Thursday, February 28, 2008
Tuesday, February 19, 2008
Innovating Sales in Mature Companies
As a follow up to my previous post regarding sales’ connection to customer success, I’ve felt a follow-up was needed to address similar practices—sales and customer success—in mature companies.
Mature companies, as opposed to start-ups, have had an opportunity develop sophisticated means for ensuring that sales and customer success stay aligned—from standard contracts to myriad support teams. When it comes to building new customer relationships, mature companies and start-ups share the same two tenets of a) needing to urgently close business, and b) making customers wildly happy and successful.
In mature companies there are different reasons to connect closing business and customer success, but mostly these two principles can and should be connected to ensure near and long-term business growth.
The challenge in the mature company is to innovate in the area of sales/customer success.
The best mature companies start with ultra-smart pursuit teams—cross-functional teams that drawn on the expertise of people that have a deep knowledge and skill. A pursuit team crafts a powerful, concrete value proposition that is tightly tied to the company’s ability to deliver on that value prop. Product experts, service gurus, financial wizards, technical hot-shots — each draw on their expertise and connection with their area of the broader organization.
The results are remarkable—not only are great proposals delivered to prospects, but also each proposal is tightly in sync with what the company can stand behind. HP is a great example. While slightly dated, a great, very public example was their big win as part of the General Motors IT outsourcing bid process. My good friend Mike McGrorey is on a pursuit team at HP where he brings his deep experience at the company and his analytical skills developed in finance leadership roles over many years.
If you’re a big company that needs to innovate in the sales process or a small company that aspires to land bigger and bigger accounts, building an expert pursuit team should be on your 2008 to-do list.
Mature companies, as opposed to start-ups, have had an opportunity develop sophisticated means for ensuring that sales and customer success stay aligned—from standard contracts to myriad support teams. When it comes to building new customer relationships, mature companies and start-ups share the same two tenets of a) needing to urgently close business, and b) making customers wildly happy and successful.
In mature companies there are different reasons to connect closing business and customer success, but mostly these two principles can and should be connected to ensure near and long-term business growth.
The challenge in the mature company is to innovate in the area of sales/customer success.
The best mature companies start with ultra-smart pursuit teams—cross-functional teams that drawn on the expertise of people that have a deep knowledge and skill. A pursuit team crafts a powerful, concrete value proposition that is tightly tied to the company’s ability to deliver on that value prop. Product experts, service gurus, financial wizards, technical hot-shots — each draw on their expertise and connection with their area of the broader organization.
The results are remarkable—not only are great proposals delivered to prospects, but also each proposal is tightly in sync with what the company can stand behind. HP is a great example. While slightly dated, a great, very public example was their big win as part of the General Motors IT outsourcing bid process. My good friend Mike McGrorey is on a pursuit team at HP where he brings his deep experience at the company and his analytical skills developed in finance leadership roles over many years.
If you’re a big company that needs to innovate in the sales process or a small company that aspires to land bigger and bigger accounts, building an expert pursuit team should be on your 2008 to-do list.
Thursday, February 14, 2008
Starting ... with sales' connection to customer success
I've thought of starting to blog for some time now. So this is my start and we'll see where it goes.
Here are two assumptions in a start-up software/services company, which independently work great, but which take effort to make them work well in tandem.
One: It is always urgent for sales close business. Anything that gets in the way of a close should be eliminated. Hopefully a smart/motivated company will build a sales-oriented culture, where all functional areas are motivated to support the creation of new customers.
Two: New customers need to be made wildly successful and happy. Magically, this creates new opportunities for sales--both from existing customers and through existing customers. And a great by-product of this is a lower cost of sales and faster sales cycles.
Here's the rub between the two. When a contract is being negotiated, sales will often agree to terms that are important to the customer, but that may be different from norm and potentially difficult for the vendor/supplier to provide.
In short: The near-term need is to get the signature on the contract, which may come at a cost later. How do you fix this?
As part of creating a good sales culture, sales should work with functional managers to craft an agreement that makes the customer happy, but doesn't create unnatural pain when it comes time for delivery of the product/service. Now from a sales perspective you might say, 'forget it, just get it signed.' I beg to differ, and here's why.
1) Getting it signed is only the first step in what should be a many year relationship with the customer.
2) Sales performs better when they bring supporting expertise into the process; this establishes credibility and commitment, and often helps sales see other creative solutions.
3) Contract commitments that don't feel quite right at signing almost always feel much worse later.
4) Bookings aren't as valuable as revenue, and revenue doesn't get earned if customers leave because of bad experiences.
5) It is far cheaper to grow existing customers, and this sort of growth is super valuable to showing a nice revenue curve.
6) It is easier to charge a premium to happy customers, or at least not get beaten down to razor-thin margins.
There are certainly other good reasons to create a healthy sales culture... and doing it right can be very rewarding.
Here are two assumptions in a start-up software/services company, which independently work great, but which take effort to make them work well in tandem.
One: It is always urgent for sales close business. Anything that gets in the way of a close should be eliminated. Hopefully a smart/motivated company will build a sales-oriented culture, where all functional areas are motivated to support the creation of new customers.
Two: New customers need to be made wildly successful and happy. Magically, this creates new opportunities for sales--both from existing customers and through existing customers. And a great by-product of this is a lower cost of sales and faster sales cycles.
Here's the rub between the two. When a contract is being negotiated, sales will often agree to terms that are important to the customer, but that may be different from norm and potentially difficult for the vendor/supplier to provide.
In short: The near-term need is to get the signature on the contract, which may come at a cost later. How do you fix this?
As part of creating a good sales culture, sales should work with functional managers to craft an agreement that makes the customer happy, but doesn't create unnatural pain when it comes time for delivery of the product/service. Now from a sales perspective you might say, 'forget it, just get it signed.' I beg to differ, and here's why.
1) Getting it signed is only the first step in what should be a many year relationship with the customer.
2) Sales performs better when they bring supporting expertise into the process; this establishes credibility and commitment, and often helps sales see other creative solutions.
3) Contract commitments that don't feel quite right at signing almost always feel much worse later.
4) Bookings aren't as valuable as revenue, and revenue doesn't get earned if customers leave because of bad experiences.
5) It is far cheaper to grow existing customers, and this sort of growth is super valuable to showing a nice revenue curve.
6) It is easier to charge a premium to happy customers, or at least not get beaten down to razor-thin margins.
There are certainly other good reasons to create a healthy sales culture... and doing it right can be very rewarding.
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