For the vast majority of new businesses, sales is top of mind day-in and day-out. While it is hard to rank tasks according to importance (it literally seems as though everything matters at a startup, doesn’t it?), we have to look at early sales success as key not just to growth, but to survival. And so unless you’ve got the luxury of investor money that allows you to hire a sales team, it’s an activity that will be taking a lot of your time as the startup founder.
Here are a couple of interesting facts for you – the second of which really gets me thinking: 1) Full-time sales positions currently account for over a tenth of all jobs in the United States; 2) Of that mammoth sales force, 20% deliver over 80% of the revenue.
Why is that second figure of particular importance to us startup founders? Because, and to paraphrase business guru Peter Drucker, it reminds us that it is not simply a matter of “doing the right thing”, but “doing the thing right”. Get good at sales and the payout is a financial one. Stay mediocre, and the outcome could be far worse than simply remaining mediocre – on the startup front it could result in complete failure.
Of the entire sales force in the United States, 20% of salespeople deliver over 80% of the revenue.
Personally, I feel that the majority of people who fail to sell do so not because they can’t or because they don’t try hard enough, but because many of them make one or more of the all-too-common sales mistakes I’m about to outline for you – and simply get stuck in these bad habits. Now of course we all make mistakes from time to time, but again we have to stress that errors in the foundation of your sales process are hard for the startup to survive with for too long.
1. Neglecting to prospect
Let’s start with the basics: one of the main reasons why businesses fail to sell is because they neglect the need to get out there and find enough prospects in the first place. Prospecting for sales is the first and arguably most vital stage in the sales process, and yet still many entrepreneurs put it off – either because they don’t like “going in cold” or because they feel they have enough customers and therefore don’t need to find anymore.
But it’s the single-biggest mistake you can make. Before we get to the ABC (Always Be Closing) stage that Alec Baldwin made so famous in the absolute classic sales film Glengarry Glen Ross, remember that something comes before it: ABP – “Always Be Prospecting”.
Most businesses lose 14% of their customers every year. This means that steady prospecting must be a core part of your business plan.
If you fail to do this, get ready for frustrations and a massive level of stress. Procrastination is one of the biggest causes of stress, and procrastinating on the sales prospecting front will weigh hard on you. Of course it’s important to look after the customers you already have, but the fact is not all customers are going to be around forever. According to Business Brief, most businesses lose 14% of their customers every year. This means that steady prospecting must be a core part of your business plan.
2. Sticking too tightly to the pitch
Of course a high-impact, engaging presentation has its part to play when it comes to sealing the deal, but it needs to be remembered that it is not the be all and end all. I have seen far too many entrepreneurs and salespeople alike slave over presentations for days on end, only to get in front of a potential buyer and deliver the pitch in minute detail, paying little or no attention to the reaction of the client – and therefore failing to act on vital buying signals.
Yes, if you give a presentation (and you don’t alway have to, mind you!) it needs to be slick, but don’t let it dictate the flow if things end up going in another direction. Ask yourself why you are there. It is about helping you and the prospect identify if there is a need for what you offer, then presenting your case in the right way – with the right words and the right timing – to make yourself and your products or services look favorable. Sticking to the script too tightly can end up having quite the opposite effect.
Get your presentation tight and then deliver it naturally, but be ready to change tact if needed, rather than relying too heavily on your slide show and missing out on any potential jumping off points for conversation.
3. Not being a good listener
Asking the right questions is of course vital to any sales conversation, but then make sure you are listening to the answers. Whether it is a sales discussion, a discussion with your partner, or a casual conversation with someone you met at a business or personal function, everyone loves a good listener. Just think how good you feel when you are in the company of a good listener. They make you feel comfortable, and you just want more of them. For the salesperson, I can’t think of a more endearing and indeed necessary trait.
A good listener looks you in the eyes, gives no indication whatsoever that they are about to interrupt, says “yes” and nods at just the right times without overdoing it (so as not to distract or disrupt the speaker), and is, ultimately, truly listening. He or she takes in the words, and when that is being done honestly, the speaker senses it.
In any sales conversation it is the prospect that should be doing the vast majority of the talking – as much as 70% in my opinion. So rather than diving head first into a sales pitch only to come up for air at the end to ask about next steps, let the prospect lead. Start with questions and get the person talking, and you will see that after five or ten minutes you are in a rather comfortable place. Then you can decide together whether your prepared presentation is needed, or if you just continue the conversation (I prefer the latter 100% of the time).
Really, this all boils down to recognising that sales is first and foremost about solving a customer’s problem. If you understand exactly what a prospect is saying you’ll be better placed to offer them a solution and therefore secure a sale (if there is a fit). So listening is nothing short of an essential survival skill for the salesperson. It gets you to the answer you need faster than any of your own smooth talking will.
4. Being coy about price
There are many salespeople out there who will tell you that one of the tricks of selling is to build value first and then talk about price. Personally, while I can see the logic, I’m not so sure on this approach. Coming at a sale in this fashion tends to result in a potential buyer that can never really get too carried away with their interest in your offering because at the back of their mind they’re wondering whether it is even affordable or not.
The mistake here is that too many salespeople are afraid to initiate conversations regarding price, when really it is nothing to shy away from. Having discussions around price early on signals your intent from the outset, and gives the potential buyer complete transparency. Of course you may not know the exact price upfront. You may have to get the requirements. But it is pretty much always possible to give a range, and it is fine if that range is a fairly broad one. You don’t want to lock yourself into something unrealistic and have to backtrack later.
5. Not knowing how to close
This one is in large part about timing and communication. Try to close too soon and you could be waving goodbye to a fantastic opportunity. Wait too long and someone else will most likely snatch that opportunity right out of your hands.
The case for not jumping straight to the sale is clear. Sales is after all very much about building relationships – and as the saying goes, only fools rush in. Take the time to understand your prospects challenges, educate yourself on their businesses, and demonstrate your value to them. If they are in fact a genuine prospect, then by doing these things you are giving yourself the best possible chance of securing that sale.
However, that’s not to say sales success is done by staying casual about the contact or giving that prospect his or her distance. Far from it. When to make contact, how to make contact (what to say), and how often to make contact is very much a gut feeling-led exercise, and you have to develop killer instincts in this respect.
The key is to look at the close as part of an ongoing consultative relationship rather than something that is going to be a quick one-off transaction (that is, getting a yes or no at some point based on very little discussion almost never happens in B2B). This means that events dictate the timeline and not vice versa. The sale can come at anytime throughout this process, and so that finesse you develop based on your finely-tuned instincts is what dictates the actions you will take to give yourself the best chance of securing that sale.
With a history of business successes, Neil Petch is well known in the UAE and beyond as a visionary entrepreneur with a passion for helping others establish and grow their own businesses. Neil founded Virtuzone in 2009 and quickly established it as the region’s leading company formation expert, before launching Virtugroup, a holding company that has a wider mandate of supporting startups from establishment; to successful market entry; and all the way through to exit.