When it comes to start-ups, early-stage companies and other new technology ventures, there are many challenges in creating the “opportunity” to identify, meet and capture the first customers. Typically these organizations operate with a lean team … and even leaner budgets. They balance the long-term objective of acquiring the “big deals” with key strategic customers and recognize the reality that their capacity to deliver is still in its infancy or ramp-up stage. They must get in front of perspective customers, but they can’t sell them the product—yet. How these companies navigate this dichotomy of circumstances will determine if the business succeeds or fails.
Recently, I was working with a group of early and growth-stage technology companies, and the discussion revolved around how to increase the visibility of the organizations (and their products/services) without overpromising or disappointing would-be customers. Disappointment could arise from a host of “normal” issues of transitioning from research and development of new technology into commercial sales, including capacity issues and delivery times. Here are some of those questions that arose:
We are in sales mode, but are having a hard time managing the differing close rates. Some prospects we meet want to sign the deal that day, while others take six months or more to evaluate our technology, request a proposal, consider the proposal, negotiate the terms of the purchase and finally sign the deal. How do we manage these varying timelines and our capacity to fill the orders?
As a new company, we have been able to get information on our technology into the marketplace, nor we haven’t started a formal sales effort, because customers are coming to us and right now those orders are as much as we can handle. But long-term, we will need the larger customers who aren’t calling us yet. When should we start approaching these larger customers? We don’t want to frustrate the customer or invest time in “selling” when we aren’t ready to deliver to them; what do we do?
It is time for us to put in place a sales team, but we aren’t sure whom to hire or how to do this? We don’t have a lot of resources to invest and we don’t know if we need to start with a seasoned salesperson that is an industry expert or someone that is used to selling and working in a start-up? We really don’t think we can find someone that is both … and afford them. How do we find great salespeople?
Our business is going to sell to other businesses, but our team is only familiar with business to consumer sales processes. We’re hearing a lot of ideas from tradeshows and conferences, to cold calling, and networking.
How does B2B differ from B2C? What are our options, how do they work, and what would be most effective for us?
We aren’t salespeople; we are technology and science people. How do we approach customers? How do we make a sale?
The sales process begins with identifying the right prospect: One that has a need for your solution, the funds available to pay the price you are charging and has a willingness to do so … and one upon which you can establish the technical expertise of your team and organization, long before you make the first official sales call.
An important point to understand about the sales process, especially with highly technical, scientific or innovative products: Rarely will you meet someone and make a pitch in the initial meeting. That is a bit like asking someone to marry you the moment you meet them. You must get to know your potential customers and they must get to know you before they will seriously consider doing business with you.
So the beginning point of developing your sales effort is to understand your pool of prospects, obtain relevant and meaningful information on what they are experiencing today and begin formulating your message for those prospects.
Another key aspect of selling is to understand that your pitch will not be the minutiae of your science or a purely technical presentation. Customers look for solutions. They may need some level of technical information, but it isn’t at the same level, unless you are selling scientist to scientist for pure science or research applications … and even then someone will want to know the “business” details.
Also, do not make the mistake that “anyone” can sell. Landing the sale is a complex process that requires more than technical knowledge or your product or service (although those elements must be present as well). Your sales efforts—the ability to sell—relies on how effectively you (or your sales team) can translate the “science” into solutions that the customer understands how the solutions can positively impact their business/organization. Buyers typically make purchases to accomplish goals; we need to know how it will change our lives, get our jobs done faster, cheaper, etc. or support a value that we hold.
Never overlook the fact that most buyers and decision-makers will not make the decision purely on the product. They will also take into consideration how risky it is to adopt the technology early, to deal with an early-stage company with an unproved record, and a host of other factors. So be prepared with the answers to their “objections” and perceived risks:
- Is this a proven technology?
- What support do you have after the sale?
- What have other customers experienced?
- If we are your first customer, what guarantees do we have that you:
o Are going to be able to do what your promise?
o Will deliver on time?
o That the technology will work?
o Minimize disruptions and transition costs?
o Be in business to support the customer in the long term?
In the initial pursuit of customers, having answers to the questions and concerns above will influence who you pursue as your first customer(s). Select your initial customers carefully, based on capacity, experience, and a host of other factors. To build a successful track record for your technology, product, services, and business as a whole, your first customer should be of a size (and stage) that enables you to fully handle the project, implementation, and follow-through. Select a customer that is too large and you set yourself up for failure. Choose to pursue too many customers (and obtain them), and you will be straining your team’s capability to successfully deliver.
So, how do you evaluate opportunities with regard to target markets and then optimize the sales process, find the right channels, and connect with customers? That is the multi-million dollar question!
First, objectively evaluate the capacity of the organization to produce and deliver the product to the customer. This evaluation needs to take into consideration the resources available, the planned project timeline (where the project can include production of the product, design, implementation, time to physically deliver, installation, and troubleshooting as well as customization and after-sale follow-up). Having a clear task list, timeline, and resource plan will quantify your ability to serve the customer.
Second, decide if you will be doing everything from sale to delivery yourself, or will you team up with distributors or strategic partners. Many early-stage companies lack the resources and experience to go directly to the customer for a sale. The time, effort and investment that it takes to establish relationships, hire qualified sales team members, and all the other elements of establishing a successful sales and marketing program is often beyond the financial and operational scope that early-stage companies can manage.
Early-stage companies and those early in the growth process need to make wise investment decisions in how they want to establish the initial marketing and sales efforts. When full-time employee based sales team is more than the company can yet afford, there are many alternatives from retaining a contract sales force (via expert companies providing experienced, qualified sales teams) to teaming with channel partners or contracting with distributors with established reputations and networks. Whatever the mix of in-house, outsourced, and strategic relationships, the organization needs to make a robust, comprehensive strategic marketing and sales plan that identifies key opportunities (customers and markets) and establishes the specific objectives and methods for reaching each.
Sales don’t simply “happen.” They require organizations to take action to identify specific targets, understand the needs and requirements of each target for communication, proposals, and purchases; and an ability to develop and hone the core message to address each customer specifically.
Sales are made to people. Take time to understand your customer, establish credible relationships and invest time and resources in developing sound processes and systems for before, during and after the sale. This time will make the difference in your sales and overall business.
Author: Lea A. Strickland, MBA CMA CFM CBM GMC
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