Book Excerpt

From A Simple Startup Sales Guide book

Creating a successful sales process that will make a company thrive and flourish can never be only about speaking or connecting to people, or explaining your company and its products, or even about preaching your company’s great benefits and features. A successful sales system is well thought out, planned, and orchestrated in a controlled process during its execution. More importantly, it must be something that can be replicated easily. This process is a step-by-step procedure that takes you from the identification of potential customers to closing the sale. It’s a detailed set of instructions for accomplishing a goal. To create the system, you have to think about what you do, why you do it, what the outcome of each step is, and when it’s time to proceed to the next step.

Whether a software programmer, dentist, illustrator, interior designer, or auto mechanic, most entrepreneurs come from a skilled or technical background. They love what they do and expend great amounts of energy in the specification, planning and implementation of every project they undertake. Most likely, they aren’t familiar with sales tactics and they haven’t been heavily involved in sales in their previous jobs. Therefore, they tend to approach the sales process in a haphazard way. They consider sales a secondary task, and give other work their priority. This is how and why many start-ups achieve only lackluster sales

Sales aren’t about talking to anyone and everyone. Selling is a very prolonged activity, which most entrepreneurs are unaware of. The process of sales must be repeatable and predictable so anyone who is able to follow directions can sell without having to be a sales superstar. The tactic for your sales cannot be created quickly or overnight. Defining and creating a successful sales system is imperative to your company’s success. David Skok, a venture capitalist at Matrix Partners has found that “one of the most common points of failure in start-ups is the inability to acquire customers in a cost effective way.”

Experimentation is required in the beginning to determine exactly what’s going to work. In all actuality, however, this procedure is never ending because it requires continual reviewing, improving of the process, and gathering feedback as it occurs in the marketplace. Without sales, there is no cash flow. Without a cash flow, the company cannot survive. Even with start-ups, though funding is currently provided by investors and creditors, the need for money may not be immediate, but it is still needed. Operating costs require revenue – a crucial element for the survival of the business. It’s amazing that most entrepreneurs don’t put more effort into it. When a new company gets sales right from the beginning, investor funding may not even be required.

So, let’s talk about developing a sales process.

REVIEW YOUR CUSTOMERS AND CURRENT SALES

When surveying your customers, always ask the deep questions, such as why exactly they bought your product. Furthermore, ask in such a way that allows you to understand the nuances and minutia of how your product was used to solve their issues. Doing so will make it much easier to comprehend what your customers are trying to do, rather than focusing on the problems they are trying to solve.

Focus on features that bring your customers the most value. As a new or growing company, it’s important to figure out who your most satisfied and happiest customers are. You are seeking are more customers like them. Statistically, two-thirds of the customers who are interviewed should be your best customers. Likewise, as you seek out your satisfied customers, review all of the deals that have been lost in the past six months and determine if there’s a pattern.

Try to resolve the following questions:

• What is your customer trying to accomplish? • Is your customer using the product in the way you intended? • Is there a specific feature to your product that they are using to solve their problem? • What is the financial cost if the problem was not solved? • Whose job is it to solve this problem? • What problems are blocking the customer from accomplishing the goal? • Who are your contacts and what are their titles?

Utilize your research to re-write marketing materials so the remarks of your current and happiest customers will be used. If your top customers are all using feature X, and consider feature X to be the most important, then start your feature list with X. If you show pictures of customers in your marketing materials, these images should depict customers that match your ideal buyer profile. This will re-position your product so you can attract more customers similar to your best customers by highlighting the product’s strengths which they use.

The next review step is to discover how your customers bought your product. In a nutshell, what is your customer’s buying process? You may already have a selling process, but unless these match up, you’re not going to sell as much as you would like. If you look at either process, there are just three phases: before, during, and after the sale.

The steps in a typical customer buying process is shown below.

1. Problem and need recognition, or want identification

2. Information search

3. Evaluation of alternatives

4. Select the preferred vendor

5. Complete Purchase

6. Post purchase evaluation

So, what’s the difference between the buying and selling processes? The seller is the creator of the information in the search. The seller promotes their product as the alternative of choice, encourages conversation about the alternatives, and understands the buyer’s selection criteria.

Let’s take a brief, but closer, look at some of the customer stages. When people identify a problem, it is often a specific issue. That problem often fits into a larger scope, but the specificity of the problem often prevents the customer from seeing the big picture. Provide the customer with the insight to see the overall goal and how the problem/solution fits in. Not all products are about problems though; some are about wants and desires. These products require more of an emotional appeal. Second, every person has access to a wealth of information, anything you want to know is available somewhere on the Internet, you just have to dig deep enough for it. One key is to present the information to the customer in a way that they want to consume it. They want to be in control of the information they receive. On the flip side, salespeople often want to be in control of the information the buyer attains, sometimes even limiting it to make their product appear better. Don’t be at odds with your customer over information. The customer is simply seeking information that will help them make a buying decision. The next key is to build your customer’s confidence in your product. Here’s a tip: Become an expert on the problem instead of an expert on the details of the solution, aka your product. From a consumer behavior perspective, the company that understands the problem better than the competitors and the customers, will be perceived as a visionary leader in the industry. Who would you rather buy a product from – the leader or the follower?

Let’s look at a quick example. Programmers often want to talk about how cool the features of the software are, but customers want to know how those features can be used to fulfill their needs. The unfortunate truth is, most software marketing materials just drone on about the features themselves.

There are a few noteworthy points about the customer buying process. It isn’t as analytical as it seems on the surface. The evaluation of alternatives and the selection of the preferred vendor have much to do with a buyer’s behavior. This is where psychology and neuro-marketing start to play a bigger role. Second, nothing in the buying process itself mentions the need to design a buying experience that the buyer wants. However, research conducted by McKinsey found that the buying experience is more important than product and price.

REVIEW WHAT YOU ARE SELLING AND WHO YOU ARE TARGETING

Re-examine your strengths and establish your product’s value. Leverage those strengths to sell to prospects in markets that have a need for your product. If a customer is not right for your company, walk away from the deal. Wrong-fit customers will never be satisfied and they will cost you more money than you’ll get from them.

Recognize clients who are in markets where you can offer maximum value with minimum charge, who are similar to your most satisfied clients, and who are willing to become references. Quality customer references and a proven value are good reasons to justify higher prices.

Figure out what companies and markets have problems that you can solve:

• What industry or market segments have you had the most success with? • Which customers have realized the most value by buying and using your product? Are they in similar

industries or do they have similar profiles? How do they quantify achieved value? • Which companies or customers would provide you with the best references or case studies? • Where have you built the best competitive advantage for yourself? • What kind of customers do you find it easiest to work with?

Build a list of prospects to contact over the next few months. Then, commit to only the identified companies and markets, and resist the urge to sell to everyone. If you are in the direct to consumer space, build a profile of the customer. The shotgun approach – trying to sell to anyone and everyone – is an overwhelming method in which you are trying to sell to a broad range of prospects. A truly effective sales process works only with high probability prospects.

In a business-to-business start-up, the rule of thumb for searching for viable prospects is that each sales person searching should be able to contact between six and eight customers in a day. This is a ballpark number, but in your start-up, you need to decide how many customer contacts you need to have and stick to it. When a company is new, this can mean that the founders, the marketing department, and the salespeople should all be involved. In a start-up where people wear many hats, six to ten contacts in a week may be all that is doable by each person. Anyone new to sales might find the sales process intimidating, as they quickly realize that attempting to interact with outsiders isn’t as easy as it first seemed. In the internet age, online metrics become an indicator of sales and interest. Even online, there are one or two factors that dominate – traffic and trust.

DEVELOP AN IDEAL PROSPECT AND CONTACT PROFILES

Your greatest chance of successfully making a sale is with a company you can either help reach a critical accomplishment or solve an equally critical problem. Build a list of possible companies and some basic characteristics: industry, company size, company ownership, and location or geography. These characteristics can easily be converted to consumers.

Build a profile of individuals working within your target companies who are most likely to experience that critical issue you can solve and who are most likely to hear you out and take action. Consider which people are needed to make that buying decision. What are their job functions, classification, and job titles? Are they the approver, the key decision-maker, an influencer, or recommender?

DEVELOP A VERY DETAILED PROSPECT LIST

When developing your prospect lists, be very detailed in not just getting titles and job functions, but the names of the actual people as well. It’s critical that your start-up be focused and that you find those early adopters. It seems that everyone loves the idea of trying something new, but when actually confronted with the new, the majority resist with everything they’ve got. It is sometimes difficult to sell someone on a new idea and convince them become the first user. Visionary and risk-taking customers are crucial to new start-ups.

How do you know a visionary or an early adopter when you find one? Not only do they have a problem you can solve, but many have spent some time actively looking for a solution or even tried to resolve the issue on their own, in pure desperation. However, be very cautious and avoid wasting your time on some of these more common pitfalls:

• Does the prospect acknowledge the problem? Does management recognize the issue, or is this only one, lone low-level employee who sees there is a problem?

• Is the person trying to solve the problem in an operational role? • Can the employee be a hero for solving the problem, or will they be seen as wasting time? • Is there a specific project with a budget?

DEVELOP AND PRACTICE AN ELEVATOR PITCH

An elevator pitch is a short, succinct statement of who you are and what your company does. The goal of an elevator pitch is to illicit a question such as “How do you do that?” And to do this, the elevator pitch must be oriented to address the prospective customer’s problem.

It takes 30 seconds to say about 80 words. That’s all the time you have to draw their interest. And, no, “speed speaking” is not acceptable! If your listener is thinking about how fast you’re talking and not listening to your message, then you need to re-work and rehearse it until it’s right.

You should be able to deliver this pitch in several different ways for the different mediums. A voice mail pitch is not the same as a face-to-face pitch. And you can’t leave the same voice mail message time and again, expecting to see a different response when the recipient hears it for the tenth time. The same applies to emails and social media pitches. Each contact must be unique, with different information delivered each time.

As a general guide, the pitch should encompass the answers to: what, why, so what, why now, and why you. If you find it difficult to be concise, hire someone who can reword your elevator pitch – there are many people available on freelance sites.

Above all, forget the idea that the pitch is about sales (despite the fact it’s called a sales pitch) of the product to the customer. It’s not. It’s about searching for the right customers.

FIRST IMPRESSIONS

The greatest mistake you can make during the initial call to your ideal prospect is trying to sell to them. The goal of the first conversation should always be to set a time and place for a more detailed discussion about the problem you are able to solve for them. Any attempt at sales will be met with resistance. You will be tagged as one of those nasty, undesirable callers. You must always give your prospect a clear indication of what you want from them.

Initially, introduce yourself. Next, mention the problem or kind of help you can provide. And, lastly, establish that there is a problem or goal that needs to be addressed. Make it a quick, short dialogue, whether it’s over the phone or in an e-mail. If you get a positive response to the exchange, ask for a meeting or a follow-up, so the discussion of the problem can be more detailed. Here’s a sample of a dialogue:

“This is John Doe from Any Start-Up Company. We help our customers with the problem of …. If you could tell me how you are dealing with the challenge of …. , we could quickly determine whether we should continue this conversation further.”

If you’re like me, you want to know what to expect from this sales process. So, here’s a real example of a start-up that identified 36 new prospects. Over a 3-week period, sales were able to cold call these people. Of the 36 contacted, 7 had follow-on meetings or 19% reached the next phase. In one month, 2 of the 7 closed, or 28%. That’s 2 sales out of the 36 prospects or 6%. It really isn’t unusual to see this identified-to-customer number be less than 10%.

Consumer sales on the Internet are similar. Offering a free trial with an upgrade to paid subscription status, an Internet start-up has 90% of its revenue from premium users. Even though there are 3 million users, only 2% of these are using the premium services. If you plan on using a free trial with an opt-in or upgrade at a later date, it’s important to know that premium customers don’t pay quickly. Usually about 75% of the free users stop using within 90 days, and it can be a year or more before users convert to paying customers.

Another important note about first impressions is most are made online today.

Most sales forces do napkin math, working backwards from the goal. They start by determining how much revenue is required, calculate how many customers they need to achieve that revenue, decide how many prospects need to be identified and contact that number to acquire the needed results. For the first time entrepreneur or those new to sales, this number can be quite an eye- opener.

MEETING FLOW

Until you understand what’s going on with your prospective customer, there should be no sales presentations or product demonstrations. You should be asking questions and listening to your prospect, not presenting your product or pitching your sale. You need to look at the sale from your customer’s point of view and not your company’s.

Before you can present or demonstrate your product, you and your prospect must arrive at some essential agreements. Usually phrased as business-to-business interactions, they also hold true for business to consumers. Internet marketing businesses pre-qualify their leads in the same way. The only difference is it’s done in cyberspace and in copy.

1. The prospect has a problem that is important, requires an immediate solution, and is blocking a goal from being achieved. Most prospects don’t recognize the problem and are “getting by” doing what they are doing. This prospect needs to be transformed into one that understands and accept they have a problem.

2. The prospect has not solved this problem. The cost of the problem is large enough and is a big enough headache to justify paying to solve it.

3. The prospect knows there are available solutions.

4. The prospect acknowledges that your product or service is an acceptable solution.

It is at this point that you may now talk about, present, and demo your product as a solution to their problem that will accomplish their goals and deliver financial benefits.

The prospect will not believe any return-on-investment (ROI) number that you present because it may not reflect their specific business challenges. For them, ROI is an imaginary number based upon an average case that is either made up or derived from the experience of your current customers. The risk is you may also lose any credibility you may have had.

A start-up presented a mid-sized company with a case study ROI for their software licenses. The study used a Fortune 500 company. While the mid-sized company found the analysis interesting, the company could in no way determine if it was relevant to them.

ORGANIZE YOUR SALES PROCESS INTO A SYSTEM

Without a set of steps that allow you to understand what you have done and how it enables you to obtain a sale for your product, you have no way to determine your progress or know how well or poorly you’re doing as you pursue your opportunity.

An “action-driven” sales process consists of a series of actions that must occur in a sales campaign to maximize your chances of success. An action is something the salesperson or prospect does in order to move the sales campaign toward a successful conclusion.

BUILD THE LIST OF STEPS

You must keep a list of every contact you have with a prospective customer, including the type of contact (e-mail, phone, or visit), who you talked with, what you discussed, what questions either you or your prospect asked, what sales collateral or marketing materials you used, where the meeting occurred, the outcome, and any other details you think may be important. Do this with every opportunity, especially the ones in which you’ve made a sale. Find common steps or actions. Do the same with those you didn’t win. Then compare the lists.

The sales cycle should be broken down into ten steps:

1. Lead (We’ve gotten their attention.) 2. How many sales calls are needed per sale? How long does an average sale take from beginning

to end? 3. Value Proposition (The three qualifying questions) 4. Champion (We’ve recruited an internal coach) 5. Executive sponsorship (Management sees the value) 6. Proof of Concept (We’ve got a trial plan in place) 7. Formal Pricing (We’ve given them a formal quote) 8. Negotiations (We‘ve discussing price and terms) 9. Agreement (We’ve come to agreement on price and terms) 10. Signed Agreement and an official Purchase Order. (The Customer is happy customer and has

paid their invoice)

TURN THE LIST INTO A SET OF ACTIONS

Use the list to create a set of actions. Organize your steps in time. If necessary, re-write each step in the list as an action. Each action should be singular and should represent a movement that’s one step closer to the conclusion. Instead of “Discuss our products with CEO”, rewrite that step as “Obtained CEO’s agreement that our product’s features match his company’s problem.”

TURNING YOUR ACTIONS INTO A PROCESS

As you begin using your List of Actions, you’ll find the list becoming unwieldy and that it is difficult to keep track of where you are in each of your sales efforts. Examine and analyze your lists. Look for natural groupings of actions and then name the groups, such as Suspect, Prospect, Qualified, Proposal, and Closing. By doing so, you’ve now built the process. A set of actions that you believe are NECESSARY and SUFFICIENT to maximize your chances of success.

If you are not able to check off an action after several attempts, you should seriously consider abandoning the opportunity and moving on to one that will progress.

CONTINUALLY IMPROVE THE PROCESS

Apply discipline. Use your process on every opportunity and don’t make exceptions. Some of your Sales people will try convincing you this or that opportunity doesn’t need the process. In fact, a seasoned Sales person, whose only interest is to sell and make their commission, may not want to take the time to discuss the opportunities. This can be problematic. Insist that discussions and status meetings center on the actions in the process. Refuse to help or discuss those not following the process.

Be open to making changes in the sales process. When you’re first creating and formulating a sales process, you’ll need to come up with a few business experiments to see what works best. The truth is, first contact customers don’t behave the same way as mainstream ones or late adopters. So, once you think you’ve got it, you’ll need to change it again.

When you reach a steadier state, you’ll still need to re-visit and review the sales process every few months to make certain the market isn’t changing. And, once a new sales process is rolled out to the staff, expect it to take a few months before the employees will turn this new process into habit.

The method of creating a sales process began by reviewing deals that didn’t reach closure. Try to re-engage those prospects in the new sales process.

OTHER TYPES OF PROCESSES

While this discussion is heavily focused on developing a business-to-business process, it equally applies to business-to-consumer as well. Here’s an example. Consider a business that runs commercials and the call to action involves contacting the business. One step in the sales process is the initial call placed by the customer that was prompted by the commercial. Metrics used for this step are how many callers booked an in-person appointment and how many actually kept the appointment. Refining this step involves other statistics, such as the time delay between the initial call and the in-person appointment – as a rule, the greater the time delay, the more likely the prospect isn’t going to show for the appointment. This makes it clear that it’s important to engage the buyer during the interim. One way to do that is to send informative emails.

An online business-to-consumer process is yet another flavor. Here, the design of the website becomes critical. The structure of the website leads the customer to take the desired outcome, which is to finalize the sale. Getting prospects to “click” is a subject that has been studied by many. Not only is there a wealth of information on website design, but also on the consumer psychology aspect of websites. One practical book on the matter is “Click.ology” by Graham Jones. For online sales, websites must be packed with information, yet allow visitors to find what they want quickly, provide interactive features, and instill trust in the viewer. And while fancy,

creative features are cool, recent research by the Poynter Institute in Florida read more online than most web designers believe because visitors seeking information expect to be doing a lot of reading. Building an online sales engine is necessary for every business these days, because it’s the one medium that is used universally by all prospects in their buying process.