Founder’s Guide to Sales
Founders sell all the time. Distribution, recruitment, investors, press, vendors, partners, real estate deals are all require to sell.
It is an illusion that sales can be outsourced. Either the leader learns to sell or the project gets a new leader. The good news, it is learnable.
Action steps
- Make a list of prospective buyers. Learn situation from public information and third-party sources.
- Prepare your SPIN questions. Get a meeting.
- Close your first deal.
- Get sales process to repeatability and build your sales team.
SPIN questions
SPIN is a general sequence of questions that guides the typical sales process. It is a classic technique popularized by Neil Rackham, first published in 1988.
1. Situation
Understand your customers better. Who are they? How do they work? How decisions are made? How much money do they have, how do they spend? What is the organizational structure? Who is buying? Who is approving purchases? Ideally, get most of information from public sources and market experts.
2. Problem
Where is the pain? Lost time and money? Hate and unsatisfaction with existing solutions? What is missing? Where exactly is the biggest problem? What is the current cost of solving it? How big is the problem? How often does it appear?
There are many types of problems and needs. Business buyers want to grow earnings, cut expenses, and save time. Their HR needs include recruitment, motivation, and retention.
3. Implications
What are the negative consequences of keeping the problem unaddressed? What are the negative emotions around the problem? How does the problem affects the managers you are talking to?
4. Pay-off
What are the benefits of proposed solution? How the solution would be used? What things can be avoided, once the problem is taken care of? What new opportunities would open up?
Limit the number of questions. Minimize the situation questions. For other question groups, ask the minimum number of questions to go to the next level. Practice your SPIN technique. Generally, implication questions are the hardest to master.
Single sale process
A typical sales process goes through the following five stages.
- Preparation. Do research, make a list of prospective buyers, learn about purchase processes in your industry.
- Opening. Introducing your company, the problem you are helping to solve and key benefits of your solution. Social proof is helpful at this stage. Include recommendations, notable customers, success metrics, and industry recognition. A short sales presentation or pdf can be included but is not necessary at this stage. Do not focus on your solution yet. Your goal is to generate interest and get the meeting or call.
- SPIN dialogue. Learn about the customer. Talk less, listen more. Your prospective buyer (not you!) should state the problem, its implications and the pay-off of it being solved. Typically, the buyer has to “re-sell” the solution to his manager (or spouse) for approval.
- Solution presentation. Now you can describe your solution. Focus on benefits, not features. Demonstrate and prove key values. Point to reviews from pilot customers. Observe that the benefits of your product match the discovered needs of the buyer.
- Closing. Handle objections, draft a contract, get all approvals, negotiate all details and sign.
Sales pipeline
Find the best lead sources. Do cold calls, work with resellers, participate in industry events, do content marketing and SEO. Measure results and identify the best channels.
Keep all records. Every industry and culture has its own favorite communication tools: phone, email, skype, or face meetings. Find the way to keep records of your sales pipeline. You should keep the data when your key salesperson is leaving. Start with Google docs, and move to a professional solution later (Salesforce, Pipedrive, Close.io).
Automate or upsell. Items priced at hundreds of dollars or less are sold through self-service channels. Use salesforce and sales commissions when the price approaches ten thousands of dollars. Selling something for $3000 is not very sustainable in a long run. It is two expensive to just buy it without talking to anyone. At the same time the sales commission is so small that you can’t hire great salesmen for this product. There are two options: (1) make it cheaper, safer and easier to buy from the shelf, or (2) add more value and services, get salespeople, and sell for $10 000+.
This article is a part of Earlydays, an open guide for first-time entrepreneurs.
Written by Yury Lifshits — yury@yury.name — @yurylifshits
