If cash is the fuel of a company, then metaphorically sales is the exploration, production and refinement of the fuel. Just as the phrase "everything communicates" bears truth, so does "everyone is in sales."
But, as straightforward as it may seem, there are many questions in selling. Can you sell too early? How much customization should you allow in your product (or service) for early buyers? Are advertising-based models still valid, especially for new ventures? When do you walk away from a sale? What kind of conflicts can occur if you sell direct and through channels at the same time?
Everyone has a favorite success (or horror) story about SALES. Share your techniques, tricks, tips and other experiences.
An inferior product with the perfect sales model usually wins over a perfect product but a sub-optimal sales model. But how do you figure out which sales model to deploy: direct versus indirect? This question obviously relates to companies that aren't able to sustain a self-service, e-commerce business model. Much of the answer to the question relates to the level of complexity or evangelism involved in the sales process. The more your product requires specialty resources to explain what it does, how it integrates into other business systems/processes, why the unique approach will work or how it's better/different than anything else in the market, the more likely you'll need a direct sales model with your own custom-trained and compensated sales resources. Indirect models like a distribution channel are best for products that are easy to sell and have existing synergies with other products sold by that channel. A channel partner will rarely devote the energy and conviction that you and your own sales team can. They are ideal when synergies exist but often leave disappointment when they are deployed only because of the perceived lower cost of sale.
Sales and marketing weren’t things I was schooled in; I just learned it. I wish I had found a better curriculum when I was growing up, because as you get older you realize that you need to know that stuff.
I’ve often wondered: why isn’t sales taught in high school? Being able to sell, not just what you do, but who you are and everything you are up to, is a fundamental skill that can benefit everyone.
I’m from the Midwest and there is a kind of “Aw Shucks” understated way of modesty that is cultural there. But, that’s crazy when you are an entrepreneur, because you have to be out talking about what you are doing – no one is going to do it for you.
For Tech Cocktail (now Tech.co), it took me a while to get over that hump because there was a concern that we would be perceived as bragging about our success. But, we came to realize that – No – we’re just telling our story, so that people know what we’re doing.
In my opinion, being effective at sales boils down to understanding psychology.
When you sell something -- whether it is to a customer, an investor, or a marketplace partner -- you need to care about what problems you are going to solve for your audience. And, more importantly, how they feel about these problems.
You need to figure out what their motivations are, beyond the obvious financial ROI or cost/benefit that they hope to be obtained for their business. You need to dig deeper to uncover the psychological motivations that are important to the sale.
Why is this issue that they are talking with you about, causing them to consider buying your goods or services, such a problem for them?
What personal pain or problem does your product solve for them that is a distraction or serious impediment to their success?
How will finding a solution that might include your product or service benefit them in the eyes of their company peers and leadership?
What personal or emotional strings can you pluck, so to speak, that will connect your product with their business and remove any barrier of hesitation?
In order to be prepared to answer these questions, you need to do your homework. It’s important to find out everything you can through research about the company, the decision makers, and the other strategic or cultural factors that will allow you to connect with them better.
Engaging the Decision Maker in a Business Conversation - While there are more ways to communicate with your markets than ever before, it is becoming increasingly noisy and harder to get someone’s attention. In fact, statistics show that at least 7 “touches” or messaging events are required to cause a person to take any action at all. We begin with what we like to call the “Conversation” – that meaningful, collaborative business conversation that ultimately has the best chance of developing into a new business relationship. A little about the Decision Maker Role - He or she is setting the direction and leading the organization, a business unit or project. They are concerned with strategic solutions that impact business results, i.e., things that intersect with their key business and personal objectives. So when engaging in the Conversation with a Decision Maker, avoid technical feature and benefits (the most common mistake) and develop conversation points that align your products and services to his/her strategic business objectives. Some common examples are increased revenue, increased market share, avoiding risk, hiring key people and an overall improved competitive advantage, to name a few. Also, consider aligning your company’s vision, mission and values to those of the decision maker. A few minutes invested in thinking through these things in advance of your call will give you much greater insight and the ability to advance the Conversation and business relationship. Next, present your "we believe statement", the prospective value premise that you can proof out with his or her team. For example, "we believe" that by using our product or service you can improve operating efficiency by 20%. Be ready to proof it, they will ask you too. Lastly, gain what we call a PACT covenant with the target decision maker that simply says something like this, "if we can prove out the prospective value impact on your business, will we do business together"?. ASK - Always be Closing and watch how your decision level conversations become more strategic, high-impact and more fun!
My first startup was in 1994. I had an advanced technology for connecting heterogeneous databases. I was an Austin-based entrepreneur, so I originally tried going door-to-door here in Texas with the product. While almost everyone I approached thought it was interesting, none of my original prospects had a need that was high enough to make it worth the chance for them to try.
Then, a securities-trading firm that had purchased a bank in Mexico, contacted me. They had two separate databases and were desperate for a solution to rapidly integrate the two systems. Suddenly, here was a customer whose need was high enough to make it worth the risk for them to take on the technology. That first $200,000 sale saved their firm $16 million in the first year it was used, partially due to the 1995 Mexican financial crisis and ensuing chaos, after President Salinas left the presidency. Fortuitous (calamitous?) timing notwithstanding, the system proved to be well worth it!
I’m not saying it was easy by any means: I knew a very limited amount about startups at the time and an equally limited amount about doing business in Mexico. But what that experience taught me was that early adopters, especially those seeking innovative technology products and services, aren’t necessarily going to be in the building next door to you.
Building global bridges is one example of an important distinction we have designed into the education programming for Tech Ranch, the accelerator I founded. In my experience, emerging technology early adopters tend to be “somewhere else” in the world – not where you are. Thus, we believe an essential building block for success is creating the awareness and capability for entrepreneurs to build global bridges connecting them to the markets, companies, and people that are most viable for them.
“Your first clients: Start with “who” then “how” to win over the “Cool Kids”
A question I often get asked by entrepreneurs is, "how do I win my first clients?" My answer to this isn't just "how" but critically includes "who.”
To start, you should love the industry that you are trying to sell to, or at least deeply respect it. If you do that, you will naturally study it. Everything is romance in the beginning. Until you actually begin marinating in the same industry conferences, newsletters, magazines, etc. that the people in your prospect group attend and read, you won't know if you are passionate about that industry. If you find out you aren't, then in my opinion life is too short and you should move on to something that you find more worthwhile that will fuel your passion.
When you do this, you will start to recognize that there are certain people in the industry that are key influencers - these are the “Cool Kids” of that industry. They are easy to identify because they serve on the Boards and Committees of their industry’s trade associations. They do this for two reasons:
1. They want to be seen as the key innovators in their industry. This is good for their ego and, ultimately, their career. They get promoted or recruited to their next company much faster than the average person in their industry.
2. They love their industry. And they have reached a point in their career where they, as the student, have become the teacher. This is validated by the fact that their peers have elected them to Boards and Committees, often by popular vote.
There are also key influencers who do not serve on Boards and Committees. But they are usually frequently quoted in the press or they frequently speak at the industry events, so you can still easily identify them. In any case, you want to be associated with the Cool Kids. Everyone wants to be like them. And every industry has them. These are the clients that you should most want to win. Everyone in their particular industry follows their moves. And they get their companies the best deals and services as a result – they win but you win too.
One of the most important entrepreneurial books I've read is “Crossing the Chasm” by Geoffrey Moore. If you haven't read it yet, I couldn't recommend it more highly. In the book, Geoffrey describes the key segments of an industry that you are trying to win: the innovators, early adopters, early majority, late majority, and laggards. I have lived this book - both at Coremetrics and Bazaarvoice. And the Cool Kids I describe above are almost always in the innovator and early adopter mindset.
Once you win them - and, most importantly, do a great job of servicing them and making them successful with your solution - they will work hard to help you convince the early majority, late majority, and even laggards to become your clients. It is in their best interests to do so because of the two reasons I cite above about why they want to be the cool kids in the first place.
So, as you think about winning your first clients, think about who first. Opportunity cost is very real for any stage company, but it is critical for an early-stage one. The key to success with both Coremetrics and Bazaarvoice was winning over the key industry influencers first. Then we would write case studies about our success with them, do webinars with them, ask them to speak at our client summit, help them speak at industry events, help them win industry awards, and ask them to serve as references. They were critical to winning the rest of the market, which largely followed their moves. They helped us “cross the chasm”.
After you have taken care of the “who” then you focus on the “how” to win over the cool kids.
First, you need to realize that not everyone is a born salesperson. It sure makes it easier if you are that type of CEO because it makes it easier to identify people that can sell like you can. But this is rare - Steve Jobs was certainly one of the best examples. I highly recommend you read the book “Selling the Wheel” to get familiar with the type of salespeople you need to hire at different stages of your company. This book is steeped in the knowledge of how to scale your sales team, written by people that constantly consult in this area. And it is a fun read – a fable about the inventor of the wheel and how he figures out how to scale his company to big success after many false starts.
Salespeople are a very unique breed of people, and I love them for it. They will bring you revenue, delight your clients (the right salespeople care about the ultimate value delivered - not just the sale), and ultimately increase the valuation of your company and your ability to create jobs and realize your entrepreneurial dreams. Respecting them deeply is a must.
Second, on that point of respect, you need to create a sales-driven culture. I cannot emphasize this enough. How do you create a sales-driven culture?
(A): you hire truly passionate and convincing sales people.
(B): you emphasize the importance of selling across the company. Sales is an incredibly difficult job – one where you are constantly facing rejection. But you are ultimately winning the revenue that allows all of the other functions to get funded - so Sales deserves the ultimate respect. You create traditions where you celebrate new client wins. (When the sales team at Bazaarvoice beat a major stretch goal, they all dressed up as Elvis, as the photo shows, and stormed into the Alamo Drafthouse, surprising us all, to celebrate their trip to Vegas - it was a bonding moment almost like no other!)
(C): create a mythology around sales. For us, this was the color green and our SellStrong bands. On the final days of the quarter, everyone at Bazaarvoice dressed in green to emphasize company unity - that we were all in this together and we would win as a team.
Third, you need a really great demo. When you start your company, you have no credibility other than your background (your prior achievements and connections as a result). But, since not all backgrounds are equal – some strong, some less so – a revolutionary demo that lets you see clients' reactions to it, in real-time, can make all of the difference. Later on, your credibility comes from the fact that you won the Cool Kids in the space and they are raving about the impact you are having on their business. But at the beginning, it is mostly about the demo. So invest in it and make it sizzle.
Fourth, build a great Board of Advisors of people from that industry. You can give your advisors anywhere from 0.05% to 0.25% of equity in your company, depending on who they are, and then turn them into an action network to win your initial clients or enter a new market vertical. It is easier to do this than it may sound. Your advisors will not only help you with introductions to potential clients, they can also be valuable at helping you shape your solution. With your initial clients and advisors, you need to listen carefully to their recommendations. Focusing on the needs they have will almost certainly serve as a good proxy for needs that the majority in the market share. They should be leveraged heavily in validating that your demo is truly “mind-blowing”.
So there you have it: both “who” to win your first clients and “how” to win them. I wish you much success!