Unfair Advantage Concept
Almost all large and successful companies were built on a technology trend that had changed the paradigm. This is what we call a Category Power. A new category is created and there is a lot of space for new leaders. This is why Catching The Tornado is so important.
On a smaller scale you need to think about something that is unique and will give you an opportunity to stand out amongst your competitors. From my experience it is much better to spend months trying to tackle this challenge, rather than to spend this time trying to sell commodity products, especially on tech/innovation driven markets.
I really like the idea of the Unfair Advantage. This is something that is very hard to buy/copy/create and you have it already. It’s like being the tallest guy on the volleyball court. When I talk to students I tell them their unfair advantage over corporations is that they are super-motivated, they don’t have much to lose, they are risk-takers, and they can work 16h per day for free. They don’t need to convince their boss and create P&L excel sheets or tons of presentations just to try and push an idea forward. Speed and flexibility could be an amazing unfair advantage for every new company. Of course if you are competing against other startups it’s nothing special anymore and you should try harder to find something really unique.
The Hard Thing About The Hard Things Book
If you are a Founder and you haven't read this book already, stop reading this article, go to Amazon and please buy that f… book.
The most important message from the book when I think about the sales process is “Peacetime CEO knows that proper protocol leads to winning. Wartime CEO violates protocol in order to win.”
In a startup you are a Wartime CEO and you are there because you know which protocols you should violate and you are not afraid of doing this. This is why you shouldn’t hire people from much bigger organizations that will tell you you should build a process. The sales process is important but not at the beginning. At the beginning what is important is to find the product-market fit and understand who, why, when and how is buying your product and this is the role of the Founder.
This is why you should be the first salesperson and you shouldn’t hire salespeople too early. Do not outsource sales operations until you fully understand your market.
How to win first clients
Selling to the first 3 clients is relatively easy. Why? We all have some friends, family.. someone who will buy from us just because they like us. This could also be a lucky coincidence.
Selling to the 4th, 5th and 10th client gets harder and harder. You will hear “no” more and more often as you leave your bubble and you meet people who don’t care how you feel.
Selling to first 10 clients
This phase is when you need to have this Unfair Advantage (the reason that will make them buy from you) and you need to be effective during this moment.
Think about optimizing your work as much as possible. I think starting from the inbox 0 concept and using one single to-do list is a good start.
Winning 10+ clients
At this point you know why your clients are buying from you and you start seeing some patterns. You have some traction. This is the moment when you can ask for money to grow faster. This is the moment when you can hire your first sales guy.
Who is the best sales person?
Probably you saw movies like Wolf of Wall Street and you imagine that this is how the ideal sales guy should look/act like. The truth is that it’s not so obvious.
I’ve read about five different styles of sales. Some of them are much more effective than others. There is one which is 2x more effective than the second most effective. What is your guess?
The most successful sales style is The Challenger. How does it work? This guy is offering new, insightful information to the client and then he is reframing how the client sees what he needs.
After that client sees that this actual offer is so special and effective that it’s obvious he needs to buy this one. This approach is very scalable, if your sales reps follow this process, they will be successful. This is why it is so important to have a strong USP - you will build your challenger story on that.
Second most effective way of selling is The Lone Wolf, the problem is that it is super-hard to teach sales reps how to sell instinctively.
The name of the book is The Challenger Sale and you will find there a lot of very detailed information on how to implement the Challenger Sale model in your organization.
If you have the right offer, and the right process you need the right people.
How to hire a salesperson?
There is a very interesting observation on what makes a salesperson successful from the Sales Acceleration Formula book by Mark Roberge.
Sales Acceleration Formula Research
As you see what is needed are
- Domain Experience
You can look for intelligent people and then teach them about the industry. This part is easy. But how would you assess Preparation and Adaptability?
You can start from a small role-playing. I would ask a candidate to prepare an offer for me, ask him to do some research and to sell your own product to you. This is how you check how serious he or she thinks about preparation for the meeting. Then during the presentation just give her some advice/feedback and… ask to start the presentation again. You will see how coachable, open and flexible this person is.
If she is able to use your feedback to make the second sales pitch better - exactly this same will happen with your sales process.
So as you see we are looking for intelligent, fast learning and motivated people to join our sales team. We don’t need these Always Be Closing skills - as you can see from the chart, closing more deals isn’t that helpful, it’s just f**** irritating :)
You won’t make your offer better just by asking “let’s touch base” over and over again.
Winning hundreds of clients
OK so we have the USP, the sales process and the sales team. Congrats! Now let’s generate some cash!
Good sales people want to just talk with clients and close deals. They aren’t interested in marketing, lead generation, cold mailing, outreach etc… It’s also very hard to switch context and generate leads and then close these same leads. While you are closing you are 100% focused which means that after you close these deals you have 0 leads again and you need to start over and over again :( This sucks.
This is why I would separate lead generation techniques from the sales team.
You have your sales team already in place, so let’s focus on lead gen.
Some good ideas on how to generate leads for B2B companies
This is why you should always ask for NPS, if NPS >7 it's OK to ask for reco, if NPS <7 focus on solving your issues to make the client happy. Losing clients will kill your growth rate even if you have a great sales team.
Conferences are great because you could meet real people and really understand how they react to your offer. You can also talk with your competitors, partners etc. This is crucial during this initial phase when you are fine-tuning your sales process.
You can, more or less, do the same during on-line events.
With conferences you should keep in mind
- think about the participant perspective - why he/she would like to talk to you
- you can first try to schedule some meetings and go there only if the meetings are scheduled already, going to a conference without any plan is wasting time
- please read how we have prepared for big events like Web Summit
- you can organize something around the conference - meetup, barcamp, small dinner - people will be there anyway
What works for me quite well is to create digital events/campaigns that will kick-start building your potential clients database. This could be an ebook, report. You will find some examples here. Usually you will be able to gather from 300 to 10k very general leads from this source. Then you can look for the most promising contacts and start a conversation.
How to work with corporation
If you are in B2B space at some point you will be contacted by a very large client. I know some companies that are not working with these biggest companies because they concluded it's less effective for them. That's OK. Nonetheless for the majority of companies working with the biggest clients is a great way of scaling-up.
Working with these enterprises you should act more like a consultant than just a salesperson. You will need to integrate your product with the existing infrastructure.
I would recommend reading some books about McKinsey - like The McKinsey Way.
Some good insight for everyone who will deal with big companies
- Start with some initial hypothesis – Solve the problem at the first meeting approach - show them that you have a solution
- Start with the annual report – the Message to Shareholders part is crucial, what the management of the company is saying, use their own words
- Read some Trade publications from that industry for 1-2h.
- Do you have anyone in your firm who knows this industry well?
With the big companies you need to remember this is all about making your client look good in his/her company,
You should also remember that you need to win consensus, only then will they actually buy. The usual technique is to look for all the players who can say no and talk to them to address their issues.
By connecting all the parts we discussed you would be able to generate a predictable revenue. The beauty of B2B business is that it’s much more predictable than B2C.
By building a solid sales pipeline you are able to estimate the next year's numbers with a 5% diff.
To close this article I would recommend these books, describing the next steps of the B2B sales process building.