If you want your company to be successful at closing sales, you need to wear that sales hat first.
By Tom Walker
You’ve built your product, raised some capital, and now your startup is positioned to sign up customers. You can’t wait to hire a salesperson to close some deals.
But, here’s a tip: If you want your company to be successful at closing sales, you need to be that person first.
Yikes, you say. I’m an engineer or a business major, an IT systems designer or a scientist. I validate markets. I attract investors. I’m the idea person. I’m the CEO.
All that may be true. But you can’t know how to choose the right leader to ramp up your startup’s sales, until you learn first-hand what it takes to turn strangers into paying customers.
Here are some ways to figure that out.
Create a “perfect customer” persona and build a prospect list of individuals who match that template. It’s hard for startups to find the perfect customer because in the beginning, the founding team often doesn’t know who they are looking for. The perfect customer may be harder to find than the perfect date or mate—but you don’t have to waste time kissing a bunch of frogs.
Roll up your sleeves and go talk face-to-face to the human beings who validated your solution in the first place. Map their functional responsibilities. Who do they report to in an organization and who reports to them? Are they the end-user or the decision-maker or both? What features to they care about? What benefits do they receive? What is their value proposition for purchasing your solution?
Take what you learn and create the perfect customer persona, a template for your startups’ ideal users and buyers (remember, they may be different people). March leads to this template so you don’t fill your pipeline with frogs.
Don’t let your sales funnel become a deep black hole. An effective sales funnel is so much more than a batch of leads (no matter how well-vetted or how much information you have about each name). It’s a concise definition of your startup’s sales process, from lead generation to receiving revenue.
It’s called a sales funnel, because there are more prospects at the top than customers at the bottom. Every effective sales funnel contains:
- Every milestone that must occur to move a prospect from interested to yes—lead generation, sales calls, demos, reference visits, trials, etc. contracts
- Expected elapsed time of each of those steps
- Prospects by name with the expected revenue from each
In case you don’t recognize it, these aggregate to the larger milestones of your business plan. You can’t forecast first quarter revenue from new deals in January if it takes six months to close a sale.
Keep your leads from leading you. Many sales people seek as many leads as possible, but as the business only wants as many well-qualified leads as it will take to achieve its customer/revenue plan. Every lead burns time and money—this is especially true the further down the sales cycle you travel with a lead. The old adage of “the more leads the better” is a myth, so use that perfect customer sales persona as a qualifier for all leads.
When sales creativity is over-the-top, your startup won’t be. No doubt, it takes creativity to close sales. Direct that creativity toward matching your solution to your customers’ needs, finding unique and expected areas of cost justification, or toward helping your customers come up with ideas for new lines of business made possible by your solution. Don’t fall into the trap of creating a different set of terms and conditions for every deal or adding new features for every early customer just to close a sale.
Successful startups use first client relationships to define repeatable sales steps, standardize agreements, and to create a cost benefit model that the marketplace accepts.
Anyone can replace cold calls with warm hellos. So what if you are that engineer-entrepreneur who hasn’t closed many sales? You’re a problem-solver or you wouldn’t have started a company. Sales is nothing more than solving a problem for your customers. That should make you smile and give you a reason to reach out and talk to them.
During a startup’s first three years, closing sales will be at the top of every successful entrepreneur’s list. Closing customers will take longer and be harder than anything else you do. But it isn’t impossible. Smart young companies do it every day.
Tom Walker is the CEO of Rev1 Ventures, a venture development organization that combines investment capital and strategic services.