I have been coaching and mentoring startups for the last 3-4 years and there is one recurrent topic that comes up all the time: startups are struggling with sales! … and it is not because they have a bad value proposition! They fail because they are not prepared! Here are three main reasons behind this failure and also some tips on how to improve the situation.
First of all, founders rarely have basic sales skills…
Most entrepreneurs are not trained at sales, and even business schools tend to be weak at filling that skills gap. There is not enough knowledge on how to create a proper sales funnel and how to turn that into actual sales. Even consumer oriented digital marketing tools require a fair understanding of sales in order to really convert visitors to customers. Now this becomes a an even bigger problem especially when you are targeting B2B sales. Why? Because the decision process is often complicated involving multiple stakeholders.
TO BE SUCCESSFUL AT SALES YOU NEED FIRST OF ALL TO GET A GOOD UNDERSTANDING OF WHAT THE CUSTOMER IS THINKING, YOU NEED TO GET INTO HIS HEAD. THIS STARTS BY HAVING A GOOD UNDERSTANDING OF THE CUSTOMER’S “BUYING” JOURNEY.
The buying journey can be described as the steps and emotions a customer goes through before and after taking a decision to buy a product or service. It usually starts with a trigger for change, which leads to a need being developed and options being evaluated. Before making a decision the customer goes through a fear of making the wrong decision, that is when a number of concerns emerge. Resolving these concerns can lead to a sale, but it would be a mistake to think that you job is done then. Once the product is sold, their are expectations from the customer that must be fulfilled, or this customer could rapidly become a detractor, instead of being a supporter and loyal customer.
The trick to be successful, is to have your sales cycle constantly aligned with each customer’s journey. The sales cycle is about the different stages in your sales funnel. We talk about suspects (have not heard of your offering), prospects (aware of your offering), leads (exploring), opportunities (evaluate) and customers (decide). Each of these stages requires though different messages and different type of engagement. Even when working with digital marketing it is important to understand how messages need to be shaped and how you have to actively work with conversion from one level to the next. Too often I hear startups that create a few ads on Facebook or google, create a landing page and then think the job is done. Startups need to work with digital marketing in a very systematic way. Understanding conversion rates, constantly tweak targeting parameters in your adds, tuning messages and maybe even pricing to secure higher conversions. Rarely is this type of knowledge shared in startup communities.
For B2B sales you have one additional aspect to consider and that is the sales is more complex, since more than one individual is usually involved in the decision process and these individuals might not be aligned in their own customer journey. This is where frameworks like SPIN come in handy. SPIN (Situation, Problem, Impact, Need Pay-off) is all about developing your questioning skills. The framework helps the sales person in making implicit needs of the client explicit and making your client think about the impact a solution to his problem would have on his business. SPIN can help speed up the sales process because it “forces the client to act”. But really that framework can be applied to consumers as well, since it will help you the seller to get into the clients head.
Secondly, startups rarely plan sales meetings well enough or at all…
Planning a face-2-face sales meeting is not that complicated but failing to do so can seriously harm your fragile startup. Whether it is to engage into an enterprise sales, talk to an investor or a potential partner you should probably plan all of these meetings as if they were sales meetings. Too often startup founders rush into meetings trying to sell their product without even considering the needs of the client.
Take a second to reflect on the following questions:
- What do you know about the potential customer/partner/investor that you will meet? In what stage of their journey are they in?
- What do you want to get out of the meeting?
- What could possibly go wrong?
Are these questions you ask yourself? Maybe the following can help:
- Do some research about the company you want to engage. You want to understand their situation (the S in SPIN), that that will give you an idea on what could be interesting to them. Doing your homework will allow to better start of your meeting and help you to learn more about the client or partner.
- Think about what you want to get out of the meeting? Is it a contact to another person in the company? Do you want to get the client to try your product? Do you want to have another meeting?… Whatever it is, think about it thoroughly and think about which outcomes would be positive outcomes for you, i.e. an outcome that gets you closer to your objective of selling.
- Last but not least, you want to be prepared for the unexpected. You were maybe allocated an hour meeting with the C-Level of a company, but as you arrive you learn that you only get 15min… what do you do? Do you rush through the presentation? Do you adapt your message to fit into the time slot? Do you ask to present to one of the subordinates instead? Prepare for alternative scenarios.
Nowadays, in the digital age, sales and marketing are much more tightly related than in the past. It is hence important to work with a common sales and digital marketing funnel.
STARTUPS ARE OFTEN FAILING BECAUSE THEY SET THE INITIAL “HOOKS” WITH DIGITAL MARKETING TOOLS, BUT FAIL TO ENGAGE OR FOLLOW-UP.
Creating a proper plan with what activities expected to happen at each stage of the journey is critical. Monitoring conversions rates, adopting the offering and messages are all activities that need to be plan and executed in a systematic way.
Third and most importantly, business accelerators fail to accelerate sales…
Personally, I believe accelerators are today spending far too much time on basics which in my opinion should be taught elsewhere. In a sense they are also failing the startups. A lot of time is spent on business model canvas and other aspects of the early stage startup, this has little to do with acceleration of a business.
In order to really provide value to a startup when that startup is entering a stage where it needs to prove itself, all the efforts should be on sales. So the startups need to better select accelerators based on the customers, partners, mentors and investors they can provide access to. This is not only a numbers game, but as a startup you want access to the right people, the accelerator needs to know what their situation is to guide the startup in the initial engagements. They need to know what investors have invested in similar startup as yours, what level of investments you can get. Rarely is this tracked in a systematic way.
A few tips to accelerate you sales
- Work on a combined Marketing and sales plan
- Learn Digital marketing by doing. Collect data continuously during the execution to adjust your digital marketing plan. Set targets for conversion rates and improvements.
- Select accelerators that give you access to the right investors, mentors and clients (especially for B2B sales)
- Plan your sales meetings.
- Use the accelerator network (program manager, mentors, coaches) to regularly simulate sales meetings.
Do you need help with your startup? You can reach me at theideapollinator@gmail.com. Tell me more about your challenges with sales and marketing and I address these in a follow-up article.
Website: www.journeying365.org