Top Business Blog Posts

We tell our sales reps to "level up" their conversations so they can persuade executives to make a purchase.

But what do we train them on? Product demos and competitive battle cards. In other words, we fill their heads with features and then wonder why they can't engage effectively with executives who care about business outcomes.

Let's give our reps the business background they need to persuade serious decision makers.

This collection of blog posts will help AEs understand the strategic challenges executives face so they can tie your product to initiatives that decision makers care about. It will also help sales leaders understand the broader context in which they operate.

Core Posts

The Sea of Sameness by David Kellogg: This post discusses how to stand out in a market with many competitors by focusing on what makes your product different and teaching the market to value those differences.

These ideas are critical for sellers in competitive markets because they shift the conversation from "what you do" to "what is different and why it matters."

Giving Direct Answers by David Kellogg: This post focuses on the very important art of actually answering the question. When people interact with senior executives, they often speak in fluff, causing the executives to ignore them.

This post is important for sales reps because it gives examples of how to provide direct answers, which makes execs want to engage with you and consider what you have to say.

The Evolution of Marketing by David Kellogg: This post explores how the goal of marketing teams has changed over time, moving from generating leads to creating opportunities to driving revenue and now (perhaps) to focusing on customer lifetime value.

It's important for sales reps because it illustrates how to get closer and closer to the thing that your customer cares about most. As a seller, you've felt how hollow it is to get weak leads and have marketing call that "success."

Your buyers feel the same way when they get pitched "value" that isn't what they actually care about.

Enterprise Philosophy by Ben Thompson: This post discusses how companies decide to buy new technology, drawing out two very different philosophies.

The first is a top down purchase where leaders decide to use technology to replace human workers. For example, companies replaced large teams of back office accountants with enterprise resource planning (ERP) systems. Purchases like these require strong executive alignment and large investments.

The second focuses on enabling employees to do their jobs more effectively. For example, many SaaS products focus on streamlining part of an employee's workflow. Engagements like these require designing software that workers want to use and deploying change management methods to get employees to adopt the new technology.

Sales reps need to understand which philosophy best suits their product and sell accordingly.

Consoles and Competition by Ben Thompson: This post gives an example of how the right competitive strategy can change over time using the (very appealing!) context of video games.

It's important for sales reps because great sellers show how their product supports their prospect's strategy. Aligning with the buyer's strategy unlocks large budgets and gets you access to senior decision makers.

You therefore need to be able to identify your prospect's core strategy and the forces that are shaping it. This can be hard: Companies say a lot of things about their strategy and much of what they say is fluff.

Thompson's article provides some concrete examples that will help you see what's really central to your buyer's strategy. He focuses on the value chain for video game consoles, like a Playstation 4 or a Nintendo Switch. Consoles only deliver value in combination with video games: A console with no games is just a paperweight!

So how should console makers get games onto their console? There's a range of options running from the console maker making all of the games for their console themselves (an "integrated" strategy) to a console maker allowing third parties to make games but under tight control, to a console maker trying to make it as easy as possible for third parties to make games on their console (a "modular" strategy).

The interesting thing is that different strategies have been "right" at different times during the evolution of the console market. Here are three examples in chronological order:

• Atari was originally integrated, making all the games for their own console. But then third parties started making games. This created a lot of games... but many turned out to be awful. The low quality games turned buyers off the idea of video game consoles.

• Nintendo made many of its own games. It allowed third parties to make games, but only under very tight control. This brought buyers back to the market, but it meant that many third party game makers were frustrated.

• Sony decided to be as modular as it could, making it extremely easy to make games for their system. This put them in a leading position as game makers flocked to their console, giving them the widest selection of excellent games.

Here's how to apply these ideas to your sales process: If you were selling to Nintendo in the 1980s and tied your solution to their goal of ensuring that third party games were reliably excellent, you would be selling to their core strategy. That would make it much easier to get interest from top-level decision makers.

Strategy Letter I by Joel Spolsky: This post highlights that there are two fundamental strategies for growing a company. If you can identify which strategy your prospect is pursuing, you can look for ways to tie your product to that strategy to enhance the case for a purchase.

The first strategy is to grow slowly and organically, paying attention to profitability. The second is a land grab designed to capture as much share as quickly as possible even if that means burning cash.

Spolsky argues that the choice of which strategy to pursue depends on three factors:

1. Is existing competition strong or is the market open? When OpenAI released ChatGPT, it was entering an open market for consumer-facing LLMs.

2. Are there network effects, such that having more customers makes your product more valuable? Social networks have strong network effects: The more people that join them, the more valuable they become.

3. Are there lock-in effects, such that a customer who buys your product will find it costly to switch to another? Customer relationship management databases have strong lock-in effects: Once your data is in them, it is a pain to switch to another one.

The first (slow) strategy makes sense where there are many competitors, no network effects, and no lock-in. Think Ben and Jerry's ice cream.

The second (fast) strategy makes sense when there are few competitors, powerful network effects, and strong lock-in. Think Amazon in e-commerce.

What doesn't make sense is trying to mix the two!

Understanding your prospect's growth strategy helps you identify what kinds of value matter most them. If your buyer is pursuing the fast strategy and you can help them enhance their network effects, you are providing value that's central to their business and you're likely to sell larger deals faster.

Additional Posts

Smiling Curve by Ben Thompson: This post discusses how profits flow disproportionately to the companies in a value chain that have differentiation.

In the PC market, for instance, it was profitable to be at the beginning of the value chain making critical components like the processor and to be at the end of the value chain as a value-added reseller or services provider who owned the customer relationship.

But it was not profitable to be in the middle of the value chain as a company that assembled the components. That part of the value chain had no differentiation (plenty of companies could bolt a PC together) and therefore no pricing power.

This is key for sellers because companies are often trying to move to a part of the value chain that has pricing power. Helping them do that generates value and motivates a purchase.

Aggregation Theory by Ben Thompson: This post discusses how the internet has changed the balance of power among companies to favor those that aggregate consumer demand.

Thompson notes that the value chain for a given product typically included suppliers, distributors, and consumers. A product had to put these three things together in a chain to go to market.

Power accrues to the part of the value chain that is doing something that's hard. Before the internet, distribution was hard. That meant that distributors had pricing power and often integrated backward to purchase suppliers.

The internet makes distribution of digital goods easy. The thing that's hard is attracting consumers, who tend to cluster on a small number of platforms.

That means that a platform that can provide a good user experience can aggregate users and become the place that suppliers have to be. For example, if you're a sock supplier, you need to be on Amazon because Amazon can attract consumers and you'd have a very hard time doing that on your own.

This gives the aggregator pricing power.

This is important for sales reps because it's an example of how changing technology can shift the balance of power between companies at different parts of a value chain. You can generate tremendous value by helping your customer be on the right side of these sorts of changes.

Strategy Letter V by Joel Spolsky: This post covers how companies exist in an ecosystem and seek competitive advantage by influencing their ecosystem. It's rare for products to be used entirely on their own. They usually go hand in hand with complements.

When the price of a product's complements goes down, the price of the product goes up. Hotel rooms in Miami aren't used on their own; they go along with plane tickets to Miami which are their complements. If the price of plane tickets goes down, there's more demand for hotel rooms and the price for hotel rooms goes up.

Spolsky therefore argues that smart companies try to commoditize their products’ complements. When the complements become commodities, the complements' price goes down and the price of the company's own product goes up.

This post is important for sales reps because it calls out that you can deliver customer value not just by impacting your customer or its product but by influencing the ecosystem in which your customer operates.

Distribution by Ben Horowitz: This article will help you decide what distribution channel makes sense given your product and your buyers.

It notes that many founders seem allergic to building a serious sales team, partly for reasons of cost (fair) and partly out of a dislike of salespeople (it depends on who you hire!).

Horowitz points out that your choice of distribution channel isn't about your personal preferences. Instead, comes down to how your product can be delivered, how much help your customers need, and how complex their decision making processes are.

Crucially, Horowitz argues that you cannot change the customer's decision making process. You might prefer if it were simple, but you have to make the best of it as it actually is.

This is a great guide for sales leaders working with founders to decide how best to go to market because it shows how the right model depends on the situation. It can help you get past the bias that many founders have against building a serious sales team (and your own bias in favor of building a serious sales team!)

The Four Fits: Why Most Companies Fail at Moving Up or Down Market by Brian Balfour: This article discusses how tech companies are often specialized to the needs of one market segment, making it hard to another. In other words, it's hard to move from selling to SMB customers to going after large enterprises.

Balfour notes that the most successful companies have four elements that all fit together: product, market, pricing model, and distribution channel.

This often leads to a situation where there are multiple companies making a similar product, but each one is specialized to the needs of a specific market segment. In email marketing, Mailchimp targets SMB customers with a simple product, a low ACV price, and sells through viral distribution. Marketo targets enterprise customers with a very customizable product, a high ACV price, and an outbound sales distribution model.

In both cases, all four elements fit together.

Balfour's point is that it would be hard for Mailchimp to move up market to sell enterprise customers: It couldn't just add one or two features, it would need to harmonize all four elements to fit the new segment.

This is a useful post for sales leaders who are considering attacking a new segment. That project isn't just a "sales" initiative: It has to involve the whole company to establish the many kinds of fit that will be necessary.

On a related line, check out Tom Tunguz's primer on the features that enterprise customers demand. It covers the (often very unsexy) things that enterprise customers need before they can buy (like audit logs).

As someone who sold to enterprise customers at a company that was initially reluctant to build enterprise features, I can testify to how important it is to put the effort in and build them!

Financial Analysis for Product Managers by Jayendra More: This series is an introduction to the business analysis that goes into deciding if it's promising to launch or modify a product and deciding how best to optimize its financial performance.

It's important for sales reps because it provides a sense of how companies think about making major investments. One of the most promising ways to sell your product is to tie it to prospect's decision to launch or improve a critical product of their own.

This series will give you the strategic and financial vocabulary to participate in those discussions.

These are the five posts in the series (click the link below and then click on the "friendly link" on each page to see the full article):

1. Estimating Market Size: Addressable market, serviceable market, obtainable market

2. The Business Case for a Product: Revenue streams, fixed and variable costs, timelines

3. Leads and Pipeline: Understand conversion rates and costs, identify revenue leaks

4. Cannibalization vs. Incremental Revenue: Think through how a new product either displaces existing ones or expands into new markets

5. SaaS Metrics: Understand the SaaS cash flow trough, unit economics, and churn

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If you liked this article, have a look the other materials in our series Required Reading for Salespeople (of which this article is a part). You can also check out the P.S.I. Selling Content Page for more insights on sales communication, strategy, and leadership.

Want to build a sales process that proves value and a team that can execute? Get in touch.

For more about the author, check out Mike's bio.