Over the last two months I had the pleasure of presenting on B2B Sales Strategy for Startups at two of our local southern Ontario Regional Innovation Centres, Innovate Niagara and the RIC Centre in Mississauga. Both events were well attended and each session saw a number of interesting B2B sales topics brought up by attendees that I felt would be interesting to recap and discuss further.
Here are some of the discussion topics from Innovate Niagara and RIC Centre:
The Sales Funnel
For anyone not in sales it sounds simple enough, but to articulate it more effectively I have included a diagram below.
At the top of the funnel is the prospecting section, these are the contacts in the accounts you are targeting that could be a potential fit based on your assessment of their business pain. This could be based on vertical, size, geographic location etc.
As you call and email them and eventually hear back from them and gain concrete insight into their needs, you are in the qualifying stage.
After your Qualify them, which can take a series of calls, emails, meetings and presentations and you have confirmed the prospect is a very good fit, you can submit a proposal to them, this is the proposing section.
After they receive the proposal, they move down into the closing section – this is where you are pushing for a yes or now. This as well can take a series of meetings, calls, follow ups and clarifications.
If you get a “yes” you move to roll-out which is the set up, installation or roll of your solution. If you receive a “no”, then you close lost the opportunity and move it out of the funnel.
Although the sales funnel is simple in design, the process of moving prospects through the funnel can take months. In many cases, I have found that the sales process from prospecting to closing can take six to 18 months and requires many meetings, emails, calls and information exchanges.
Inbound Lead Generation
Over the last number of years, B2B selling has changed in many ways. It is getting harder to engage people via the phone and email; this is why it has become a requirement to add new sales tactics. The most effective sales tactic we have found is developing and then executing an inbound lead generation strategy. This is a content based strategy that is designed to disseminate content over your website and via social media platforms that is of interest to your prospects using specific keywords. These keywords help drive traffic to your website through search engines.
A lot of startups are looking to keep costs lean but actively drive sales results. A 100% commission model for salespeople seems very attractive; drive new revenues and assume no costs. The challenge though is that like anyone else a salesperson has bills to pay, a mortgage payment to make and sometimes children to feed.
Selling with nothing more than a commission structure, recognizing that the B2B sales process takes 6 to 18 months, can put many salespeople in a financially challenging position. If they are struggling to pay their basic bills, are they going to stay with you for the longer term? The answer, no. They will leave and find something else that allows them to at least meet basic living costs. The other question that has to be asked is why are you asking the salesperson, who has no control over how the product was made, how the solution will work and perhaps how it is to be delivered to finance your business. Some will say, that they can provide the salesperson with equity. Equity in a startup is really meaningless in a lot of cases as it has no cash value and if there are plans to grow and go through a number of raises. The equity will be so diluted it will be worth very little.
I have found that a combination of a reasonable base salary given their experience level and what you can afford to pay and a commission structure that really incents sales is the most effective combination. Adding some equity is another nice component and will keep the salesperson working for you, committed and ideally willing to stay around long enough to see the sales process through.
I do not think you can build a sales funnel and actively prospect for new business and track lead progress without a CRM, today. If you are using an excel sheet, stop. As you progress with sales efforts, and have hundreds or thousands of accounts and contacts, how are you going to manage this effectively over time and even remember who you called, what you said and when you have to follow-up next. In addition, to effectively add marketing automation solutions as a component of your sales and marketing strategy, having a core CRM will be critical.
As a final point, the owner(s) of a startup should be actively selling themselves particularly in the early days. It is important to have a tangible feel for the sales process and understand what it takes to close a lead. Be sure to schedule time in your day to do the emailing and calling. In many cases you may not find it fun, but it is necessary, particularly if you want to gain feedback on the need and effectiveness of your solution. There is no better way to learn than by speaking to prospective customers.
If you are in need of assistance from a B2B sales and marketing perspective feel free to contact me. I would be happy to see if we can help. Alternatively, if you are simply looking for a source of excellent sales and marketing information, please feel free to sign up for our newsletter or follow us on Twitter.