Sales is a great way of scaling up businesses that sell expensive or enterprise products because customers of such products tend to prefer a certain degree of interpersonal interaction before making a purchase. In order to optimize growth via this channel, you need to design and implement a repeatable sales process. There are three parts to this process:
- Generating leads
- Qualifying leads
- Closing leads
At medium and large firms, the first two are handled by the marketing team while the third is handled by the sales team. At early stage companies that are finding their first few customers, all of these steps are handled by members of the sales team itself. This article will take you through the sales process from the perspective of an early stage company trying to acquire its first few customers and how this experience may be leveraged to design a repeatable sales process.
Most early stage companies that sell to other businesses will offer products for an indsutry that the founders have had some experience in. Thus, personal networks come in handy in generating the first few leads and getting the first meetings.
Before you take any meetings, you should qualify the leads you have — which means putting them into three buckets:
- Expected to close in less than three months — spend 75% of your time on such leads;
- Expected to close in three to six months — spend 25% of your time on such leads;
- Expected to close in more than twelve months, if at all — don't spend any time on such leads, leave it to the marketing team to keep these prospects in the loop.
Once you have qualified these leads, it's time to start taking meetings. It's best to prioritize these meetings in increasing order of expected time to close. In order to prepare for these meetings, put together a single piece of paper on hand that has five to ten talking points. It may also be helpful to have a visual, such as the Amazon flywheel depicted below, that ties these points together and can be used to focus the conversation. Remember, these first meetings are primarily about understanding and exploring the prospects' problems; the first meetings help you not just get your product idea out in the market but also help you garner feedback which in turn will help you iterate further and develop your product.
If you don't have a network in the industry or have exhausted your personal network, you have no choice but to cold-call prospects. It is important to remember two things — first, don't rely too much on this since cold-calling doesn't scale well and second, it's best to be judicious about who you're calling and hit the sweet-spot between the prospect's difficulty-to-reach and ability to make a decision. It is about as difficult, mentally, to cold-call the junior-most employee as it is to call the mid-level manager. However, the opportunity to learn about the company and industry is far rich in the case of the latter since seniority is well-correlated with experience, and the probability of success in closing the deal is far greater due to the greater decision-making authority that comes with seniority.
The point of these meetings is to understand the customers' needs, and in the process gather information that may be used to convince them to buy the product or identify the important problems that your product doesn't yet solve. A popular framework used to better understand the customer's needs is the SPIN framework. SPIN is an acronym that expands into:
- Situation questions ask about the prospect's existing problems;
- Problem questions ask about the prospect's pain points and focus them on it while clarifying the problem, to get to their implied needs;
- Implication questions discuss the effects of the problem before talking about solutions. They develop the seriousness of the problem to increase the prospect's motivation to change;
- Need-Payoff questions get the prospect to tell you about their explicit needs and the benefits your solutions offers. Getting them to state the benefits has greater impact while sounding a lot less pushy.
After getting a reasonable understanding of the prospect's problems and getting a sense that the solution you offer fits the bill, it is time to start thinking about closing the deal. This can be done by starting to ask questions that will answer questions related to the following areas:
- Process — how does the prospect buy solutions such as yours?
- Need — how urgent is the need to implement such a solution?
- Authority — who needs to approve such a transaction?
- Money — how much money can your solution save? Can the prospect afford the solution?
- Timeline — how long is closing the deal likely to take?
Following each meeting, at the earliest possible, send out an email to the individual you met with an overview of the conversation, your understanding of the problems their firm faces, and a concrete timeline for the next steps. Be as explicit as possible about the work you will do and directly ask yes/no questions regarding commitments on their end. This will both make sure that the two parties are on the same page and keep the process chugging along towards closing.
Another tip offered to ensure you're on the path to closing the deal at hand is to keep asking the question — embrace the discomfort that comes with rejection because failing to do so takes up precious mindspace. Even if you're absolutely certain that the customer will say no, it is best to get that answer since there are two outcomes — your conversation comes to a close or you follow-up with questions such as what do we have to do to get you to buy? The former will allow you to move on and focus on deals that actually have a good chance of closing and the latter will leave you better placed to convert the certain no into a yes, for both this prospect and every subsequent prospect.
Lastly, be aware of the following two kinds of bad customers: the first are those who are talking to you because they want to learn about emerging tech, rather than to actually buy your product. The other type is mid-level managers who feel they can bring a change in a big company without having done it before.
The sales process is all about generating leads, qualifying these leads, and closing the leads. For an early stage startup these either come by mining the founders'/employees' networks or cold-calling. These meetings are all about presenting the problem, in the form of five to ten bullet points alongside a visual to focus the conversation, and to better understand the prospect's needs. It is important to follow up immediately after each of these meetings with concrete timelines, and even more important to ask questions that result in explicit yes or no answers. Doing the former will ensure you’re only continuing to work on the most important deals.