10 Aug From $0 to $1M. How To Design A Sales Strategy For An Online Start-Up
Based on the lessons learned over the past 5 years from doing business using the Internet and specifically as manager of sales, in this article I would like to share how to implement and then grow a sales channel with success.
One unique goal, with one person responsible for it
The starting point for a new business venture that wants to successfully design a sales channel is determining one person that will be solely responsible for this task and additionally, in my opinion, should be one of the founders. But why should it be one of the partners and not just any person (including a sales specialist)? Essentially, there are 3 reasons:
- Not everything is just sales, more importantly is learning from our potential clients when we are meeting with them to close a deal. From questions to suggestions that may be brought up, these will be key in order for us to bring our product to perfection.
- Even if the person responsible is a partner with absolutely no knowledge of “how to sell,” because they never had a specific job in sales, it will not be a problem as long as they have a passion and knowledge about the project (and the industry).
- When it comes time to seek out capital, the investors will most importantly take note of the revenue attained coupled with the monthly growth. If we can show sustained growth over time, the possibility of raising capital increases exponentially.
Structure of the Sales Channel
The second factor, once the person responsible is designated, is to design a standardized sales procedure that will be used in our business venture. In order for this to function smoothly, with scalability, and even with greater simplicity, as we did with our own business venture, MT, we will divide it into 4 (four) stages.
This consists of identifying all of the potential clients that may have the need to use our products. Not only this, but also they should provide sufficient innovation so that others will be encouraged to try the product. According to various studies, such as the one represented by Rogers’ Bell Curve, our first goal in reaching the public is not more nor less than 2.5% of the current market.
Consequently, we are saying that the key in this radical stage is “perseverance”. Of every 50 potential clients that we contact, only 1 will be willing to try a new and unknown startup like ours.
The best alternative for carrying out this first step, in our particular case, was through professional contacts in LinkedIn, utilizing messages as brief and simple as possible (important: the shorter and less detailed the message, the better the conversation).
This second stage is about getting to know the client and also that the client may become familiar with our service, whether by phone or in person. The most important thing here: “Those that do the most talking should be our clients, NOT us!” We must learn to listen.
In order to achieve this, we should have the best questions for getting to know our potential clients in exquisite detail (and their problems, which we want to solve) both written down and on hand. Here are some concrete examples:
- The problems that we want to solve for you with this new tool, how are you currently solving them?
- If you had unlimited resources at your disposal, what would be your ideal solution?
- Why did you give me this excellent opportunity to have a meeting with you today?
- What do you think could be the main reason why this new idea could fail?
- Is there some impediment that will prevent you from using our product in the future?
3) Follow up
Perhaps all of us dream of receiving an immediate YES (because our idea is fantastic!), but the reality is that the secret lies in the follow up process. On the technical level, the tool we use for this is Boomerang for Gmail, which allows us to record exactly when we should continue a conversation with a client.
Generally, in the majority of the start-ups in which we have participated or invested capital, on an average 10 to 12 contacts are made until a sale is closed (including emails, calls, meetings, contracts, etc.).
But we should keep in mind that the most valuable resource we have as entrepreneurs is “time”. Thus, it does us no good to lose hours, days, and weeks with potential clients that always and indefinitely are on “maybe”. Therefore, the sooner we arrive at a YES or even a NO, the better (always on good terms). We need not be afraid of seeking out a suitable time to ask “Would you like to work with us?”
In the case of being turned down, we must learn the reasons for the NO and continue ahead in the search in order to focus on a new client which has a higher probability of responding with a YES, and as we saw in point 1, in the end it is a numbers game (perseverance).
4) Closing the Sales
Here I would like to go directly to the practical side with 3 specific points of advice:
- Do not get into minor details: Upon closing the contract and signing it in order to begin working, we set aside the minor details and changes that our client could request, conceding them quickly. The most important thing in this stage is to learn from our clients and not argue over every single clause, such as “for this contract to be finalized one must give consent with 3 months anticipation”, if the client wants 1 month, or no months of anticipation, no problem, we just go ahead and close the deal.
- “We want to sign, but additional functionality is lacking”: This is commonly heard from various potential users; the best thing is not to enter this discussion because generally no matter what we carry out, they will always have an excuse not to buy. We cannot make a product that meets the need of each client (impossible for long term growth). If we hear this functionality request again and again (until we are tired out), only then do we make the changes, not before. In this concept I recommend reading and learning from the blog of Steve Blank, professor at Stanford University.
- “Can you offer me a trial period?”: All internet users are accustomed to this, and we cannot blame them, but I recommend not doing it. As a business venture we need: commitment, validation, and income. A trial period will bring none of these. What we can do is offer an annual contract with the possibility of cancelling with no cost within the first 30 or 60 days.
Each founder of a new business venture can and should be the best salesperson in the world for the product they imagined and is developing. In my opinion, a salesperson is made, not born. The keys are dedication and perseverance.
This article was written by Engineer Cristian Rennella, founder of elMejorTrato.com, comparison of services and quotes in real time for Latin America. Angel investor, .NET Programmer, and professor in Economics.