The Montana Mogul: RightNow CEO Greg Gianforte (Part 4)

SM: How did you conduct sales at RightNow?

GG: Primarily through telesales, which was combined with Internet-based demonstrations and trial periods of the product. I could not afford a phone switch so we put in separate 1-800 numbers to each person’s desktop. By the way, we eventually we got a phone switch that we bought used off of the Internet. I used to joke around that a new phone switch would not give us a better sounding dial tone.

SM: How did you approach companies? Did you sell to mid-level managers or senior executives?

GG: I had no trouble finding companies that did a lousy job of serving customers over the Internet. Most had a website with a button that said “Click here for customer service”. Back in 1998, I could click on that and find a phone number. Who goes to a web page hoping to dial a phone? Nobody, but companies did not know any other way to work! All I had to do was convince those employees that there was a better way of doing business.

My sales reps would search the web, find customer service numbers, call up the customer service department and tell them “I have been on your website and I have a suggestion for how you can improve service for your customers”. The rep in the call center could not handle that type of request and would transfer the call to their supervisor. Our sales rep then talked directly to the supervisor and told them we had a way to help them improve service. We then approached sales on a trial basis. We let companies try it for a while to see if they liked it, because in order for us to do business they had to recognize the value. Typically, we eliminated 50-70% of the emails coming into the business. When we came a month later to shut down the trial application, the companies would say “No! Where do we sign?” That is how the business was built.

SM: What was your growth like?

GG: In 1999 we did about $440,000 of business the first quarter. The second quarter we did $697,000. By the third quarter things had really picked up. We did $1.5 million in the third quarter and $3.3 million in the fourth. In 2000 we did $25 million. We passed $100 million in 2006, and we were one of the top IPOs of 2004. We beat Google in total appreciation in percentage basis, although we do not have their market capitalization.

What I like to emphasize is that we doubled revenue and the number of employees every 90 days for three years without outside funding. This is because of our sales process. I hired six sales people before I hired the first engineer. I had 30 sales people before I hired someone for marketing. Sales are the lifeblood of a business, period.

SM: Sales are crucial, which is why it is so important to get that part right.

GG: I say this a lot. In war there are only two jobs: making bullets and shooting bullets. In business there are only two jobs: making the product or service, and selling the product or service. Every other function in the business supports those activities in one way or another. That is why we waited so long to create a marketing department. In my mind, a marketing department should provide sales tools, shorten sales cycles, and develop leads. At RightNow we were going to the companies we wanted, reaching the people we wanted, and making the deals we wanted.

It is important for bootstrappers to know exactly what marketing can and cannot do. Why organize a focus group to ask prospective customers if they would buy a product, when you could just as easily go ask them yourself and build those all-important, one-to-one relationships at the same time? Contacting prospective customers doesn’t cost anything, and when you are finished either have a stack of orders or know what will get you a stack of orders. If no one wants to buy your product, then you have learned quickly and relatively inexpensively that you didn’t have a viable business idea.

This segment is part 4 in the series : The Montana Mogul: RightNow CEO Greg Gianforte
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