2 More Keys to Sales for Startups – Process and Metrics

2 More Keys to Sales for Startups – Process and Metrics

Sales

Sales is the fuel that makes the startup engine run.  In my previous post I focused on hiring the right sales talent and motivating them.  However, having only highly motivated, talented people is like having a speed boat with no rudder . . . it can get you somewhere quickly but it may not be where you wanted to go.  The right sales process and metrics coupled with talented, motivated people can be a winning combination that yields the revenue and traction that startups need.

  1. Right Process – The best sales talent on the planet saddled with a poor sales process will underperform everytime.  The process itself is very important and, when done properly, can yield success even with a less than stellar sales team.  Major elements of a good sales process include:
    • Identifying true prospects who are ready to buy – Talking to folks who aren’t ready to buy is a waste of sales resources.  Many prospects won’t tell you “no” but they also won’t tell you “yes”.
    • Establishing credibilityThere has to be some level of trust in the service/product provider before someone will buy.  Use your understanding of their business, previous sales, channel partners, etc . . . to establish the necessary credibility.  Do your homework on prospects before you engagement them.
    • Appealing to their major pain points(operations, costs, complexity, etc . . ), desires, or greedSolve their challenge and you win, but first you have to get them to reveal their true challenges and goals.
    • Showing them how your product/service alleviates their pain, makes them feel better, or puts money in their pocket better than any other alternativesSaying your product is better is not enough . . . they hear that from sales people ten times per day.
    • Closing sales at the proper strike pointIf the prospect has their check book out when you contact them, feel free to close the sale on the spot.  However, don’t expect to close a sale until the prospect is satisfied with most, if not all, of the elements of the process previously mentioned.  Learn how to read prospects.

Sales processes vary from company to company and you have to figure out what works for your product. Find similar products and services in your market or other markets, study how they sell, and learn how to differentiate your product/service.

  1. Right Metrics – Having the right people and the right process are great but if you aren’t using the right metrics to track results, you will not optimize your sales or be able to figure out why something isn’t working as you had expected.  A Customer Relationship Management (CRM) system is a great tool to help with this. While there are many flavors of these systems from freemium models to Salesforce (considered by many to be the mother of all CRM systems), almost anything is better than the Excel spreadsheet you’ve been using.  Any basic CRM system will allow you to track prospects, their contact info, what stage of the sales cycle they are in, pertinent info on their family, friends, relationships, hobbies (information used to develop a relationship), notes from your conversations, next steps you need to take with them and when you need to contact them again. When set up properly, the metrics that can be generated with these systems can help you track what is working and what is broken in the process and why so you can make changes in the process and/or messaging. Several of my startup and small business consulting clients use Zoho, Insightly, and Pipedrive.  The best approach is to do a little online research, ask your fellow business owners what they use, sign up for a free trial for the most promising applications, test drive them and select the one that will best fit in your company culture with your users.

THE TAKEAWAY:  Talent and motivation are not enough.  Processes and metrics are not enough.  It takes all four elements of the sales process working in unison to yield success.  Approach sales as a sophisticated engine in which the key components must all work together for optimal performance.  If a key component is out of sync, optimal performance is undermined.  It is a constant process of tracking and refining.

2 Keys to Sales for Startups – People First

2 Keys to Sales for Startups – People First

Sales

Sales is the fuel that makes the startup engine run.  Many young entrepreneurs believe that lack of funding is the biggest barrier to their early success.  Wrong!  For most startups, their lack immediate success is either that they are seeking product perfection before entering the market, they have a poor product for their target market, or they have a lack of sales.  Finding the right people and keeping them motivated are critical.  Also critical is getting the sales process right and using the right metrics to measure performance.  In this post I’ll focus on the people.

  1. Right People – I can’t emphasize enough how important this is.  Hiring people with the skill, attitude and proper level of aggressiveness that fit your company culture and target market is vital to your success.  Jim Collins sure got it right in his book Good To Great when he wrote that we need to “get the right people on the bus”.  Part of his premise is that even if you don’t have it all figured out, the “right people” will help you get there.  A final point here is that, just because someone has been successful in sales in other environments, doesn’t mean he/she will be successful in sales in your company culture.  If the sales person has an aggressive, transactional, independent style, he/she will not likely be successful selling your product if it requires education and relationship building with prospects, the sales cycle is a bit long, and your process is somewhat regimented.  The opposite is also true.  This is simply a bad fit and it won’t yield the revenue volume you seek.  The hiring process must use a combination of interviews, mock selling scenerios, information gathered from questions about personality, aptitude, temperment, sales style and other culture matching data.  Psychometric testing instruments can also be helpful in the hiring process.
  2. Right Motivation – So we have the right sales folks, but how do we keep our sales team motivated?  Finding great people is a most important first step but it isn’t enough.  Only if we continue to motivate these talented folks will we be able to sustain a high performing sales team.  A number of studies have identified recognition, competition, skills development, and money as motivating factors for sales personnel.  Also, working in a positive, encouraging environment and knowing that their effort is making a difference are also motivational elements.  In order to promperly incentivize your team members, you need to know your team members, their interests, hobbies, goals, etc . . ..  I like having both individual and team performance goals, if possible, because I want the individuals to not only do their best best but help others so that the performance level of the entire team rises.  Sometimes it is best to set short term goals to build confidence and momentum.  Supplement your weekly and monthly goals with daily or midweek goals and reward achieving these mid-term goals with unique recognition or a special gift card.  I also think competition spurs performance in most sales people so tracking everyone’s progress on a tally board could also be motivational.  Your training regimen should also be integrated with these milestones since it is unfair to expect someone to reach certain performance levels without the proper training.  A final word on incentives. Rewards need to be somewhat unique and tailored to the interests of individuals and the team if possible.  Also, there needs to be a sufficient budget for performance rewards for the sales team.

THE TAKEAWAY – Managing a startup sales team has some unique challenges.  If you are an old school VP of sales, you will likely have to change your management style and be open to a wider variety of motivational elements. If you are a young startup entrepreneur or founder, you may be great with creative motivation, but you may also be challenged by the hard realities of managing people and firing them if they continuously underperform.

Technical Skills Build Products, Soft Skills Build Companies.

Technical Skills Build Products, Soft Skills Build Companies.

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I few weeks into the ARK Challenge Accelerator in late 2013, Joshua, our teen entrepreneur, creator and cofounder of Overwatch, went to his first real business meeting with a branding company. The branding company guys were familiar with the product space and were enthusiastic. Joshua was psyched about the meeting because it was the first step to legitimizing the product and he knew that branding would be a key to success.
When I spoke to Joshua after the meeting, he was still pumped up. He described the meeting as a success. The branding guys were very engaged and already throwing out ideas. Joshua could not have been more satisfied with the meeting. He repeatedly said, “Dad, they were so excited to work with us”.

As I waded through the enthusiasm I began to ask questions about the meeting. “So who will be in charge of your project”, I asked. “I’m not sure”, replied Joshua, “We spoke with Mike (not his real name)”. “Ok, what are they going to produce for you”, I inquired. “Well, we talked about a logo, branding materials, business cards, website . . . you know, all the stuff we need for branding”. I could see where this was going, so I continued. “When will they deliver all the branding stuff”, I asked. “They said it would be a few weeks and they’d let us know”, said Joshua. “They were really excited, Dad”, he added. “And what was the cost estimate”, I inquired further. I was pretty sure I knew the answer to this one at this point. “They said they would let us know, but it wouldn’t be much. They were really excited to work on this project”, he said.

When this interchange concluded, I was not happy. How could anyone go to a meeting with a vendor and come away having no idea what who was in charge, what they were going to deliver, when they were going to deliver it, and how much it would cost? Baffling. How could Joshua not know to ask these questions?

Easy . . . he was seventeen and no one had taught him about project management, running a meeting, or the key elements of business communication. Sure, he communicated well for his age and he could pitch with the best of them, but these other skills were not intuitive. Thinking about it later, I probably didn’t acquire that knowledge and experience until I was in my late twenties. Some say I’ve still got a ways to go.

This one was on me. I just didn’t realize that, as bright was Joshua is, there is so much in the business world that he has not been exposed to and can’t learn from YouTube or Linda.com. These things are learned through instruction and practice.

I’m sure that my frustration was apparent as I told him to never leave another meeting without know Who, What, When, and How Much. I felt like I had let him down by not giving him some guidance ahead of time. However, it did serve as a wakeup call for me as a business advisor to him and others, to never take these so called “soft skills” for granted with young entrepreneurs.

THE TAKEAWAY – Young Entrepreneurs: Learn and practice the skills of communication, project management, and decision making just as you do your product development skills. Technical skills build products, soft skills build companies.