CEO of Novus Laurus. Business and transformation strategist. Digital technology, film and food investor.
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Previously I discussed lean sales cycles and their importance for scaling startups or established companies. A repeatable, high-margin sales cycle is also necessary to train outsourced sales teams or AI tools. Now, let's examine how to develop such a sales process.
1. Identify the ideal type of customer.
Hidden behind advice to “identify the best customer” are actually two separate ideas: easiest, cheapest customer acquisition and customers who will buy repeatedly. Both low customer acquisition cost (CAC) and high customer lifetime value (CLV) are needed to grow your business. Customer segments will not always fit both these criteria. Identify both types and optimize sales across them.
To understand who is easiest to sell to, examine your sales or predict who will buy your product or service without much fuss. What characteristics distinguish those who bought without hesitation? What kind of budget did they have that made buying a no-brainer? Was it 10-times or 100-times greater than your pricing? Did seasonality, market conditions, peer pressure/fashion or a budget expiry event induce a sense of urgency to buy?
Secondly, to find what type of customer is most likely to order again, examine customer capacity. What must customers' internal needs be for them to reorder? How many times might they reorder? Will reorders require much sales effort? Is the customer sophisticated enough to use your offering successfully without needing much support and maintenance for their orders?
Ideally, you want easy first sales and multiple reorders with minimum or no maintenance.
2. Establish credible leads.
Start skinnying your funnel by creating a large list of leads based on the above criteria. Via researching, buying curated lists or attending business events, gather large numbers of such leads. Where do these ideal customers come together in large numbers? What search terms, demographics or business criteria will reveal them? How can you get their contact details? Sending outreach to anyone who does not fit the criteria will be suboptimal.
3. Qualify, qualify, qualify.
Often, organizations wallow in the chance responses they get from leads who do not have the need, budget or urgency. Many organizations also hesitate or lack the discipline to ask qualifying questions at the earliest. Whether via publicly available information or initial phone calls, online research, behind-the-scenes investigations or conversations, if you cannot find whether a lead has need, budget and urgency and who an authorized purchaser is, then I've found your continued engagement will likely be unsuccessful or expensive.
For startups, citing dedicated budgets or urgency for a new offering may not be easy. Problem/solution urgency and related budgets must be investigated. The size of an organization, in terms of number of people, is usually public or easily obtained by asking. This can provide a reasonable estimate of overall company budget. Commensurate percentages of budget for operations like IT, HR, accounting, etc., can be estimated with some accuracy and verified via discreet enquiries. The CMO Survey illustrates this for marketing budget. The names of the owners of those budgets must be available, or you will engage with the wrong person even after qualification. Ensure you know who the decision maker is and what drives their purchases.
4. Take a customized approach.
Even though common criteria and qualification created your prospect list, it's crucial to customize your approach for each person. Start with a templatized sales pitch and edit for the particular prospect. Your template should state the problem you solve, the uniqueness of your solution in comparison to competition, features or customizations of the solution to suit prospects' specific needs, ease of operation and maintenance of your solution, and finally any customer successes achieved in similar spaces. Most importantly, quantify the ROI in dollars and budget or preferably operating expenses or capital expenditure. I've found the larger the price of your offering, the more likely that multiple shareholders who you may or may not even speak with will need to see and believe your pitch.
For B2B situations, ensure your pitch contains appropriate verbiage that is meaningful to different shareholder departments and ranks. Provide referenceable case studies and change management successes. Make your approach easy to understand, entertaining and distinctly memorable. Provide sampling options when possible.
5. Negotiate and close.
Any sale becomes easier with prep for negotiation and close. Even after customizing your pitch for the customer, you need to research the person who buys. In my experience, your initial conversation must have something to make them like you personally, your outlook on life in general and, finally, your company and what it stands for. Then a product or service pitch is more likely to be favorably considered. Wait to hear welcome in the customers’ behavior before introducing your pitch.
However, even good conversations can encounter procedural objections. Prepare answers to all possible objections about pricing, adoption, alternative solutions, timing, customer successes and internal company dynamics. Act as a facilitator. Flex your terms, pricing and delivery to make your sale easy for your customer. Ask gently and entertainingly for the signature on the dotted line. Do not oversell. Wait for the customer to experience initial success before asking to discuss upsell or cross-sell opportunities.
6. Improve the process.
Calculate your “sales velocity” regularly to examine your process productivity, repeatability, margins and costs. When you have a repeatable, high margin bearing process, train your sales force. If you are interested in engaging a channel partner or outsourcing sales, make sure they can explain the above process to you with examples of other customers in a similar space. AI tools can also help reduce effort and cost by taking on some tasks. Some implementations already exist:
• Best customer segments and criteria via machine learning
• Lead qualification via annual reports and/or social media
• Objection handling and terms negotiation as a game
• Anytime, anywhere salesbots for B2C online interactions
A streamlined sales process is the core of a successful business and sets you up to scale your growth or to demonstrate to your venture backers that you are ready for a round of finance to scale.
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