Published on February 19, 2014
Driving Sales & Traction By, George Deeb February 18, 2014 @RedRocketVC www.RedRocketVC.com 312-600-7560
About George Deeb Managing Partner (2010 to Date) Chairman & CEO (2008-2010) Founder & CEO (1999-2008) Investment Banker (1991-1999) BBA-Finance (1987-1991)
B2C vs. B2B Businesses? Consumer Facing Businesses – Typically driven by consumer marketing – Typically converted online, in-store or by call center sales – Typically short sales cycle (day to weeks) SMB Facing Businesses – Typically driven by a mix of B2B marketing and sales team – Typically converted online or by inside/outside sales team – Typically medium sales cycle (one to six months) Enterprise Facing Businesses – Typically driven by outside sales team with F500 relationships supported with some marketing support to trade – Typically converted by outside sales team – Typically long sales cycle (six to 12 months)
Sample Marketing Tactics? Consumer Marketing – – – – – – Search engine optimization Pay-per-click marketing Email marketing Social media marketing Mobile marketing Public relations B2B Marketing – – – – – Trade shows Trade associations Trade magazines/bloggers/websites Webinars/Events Content marketing/blogs/white papers
Before You Start Selling? Make Sure You Are Ready!! Professional looking website/video/deck: ―your brochure‖ Product is fully built and tested for quality control Productize your offering for easier sale/scale Sales team is hired with a rolodex of relationships Sales team is fully trained on product/FAQs/sales kits/pitch Be clear on the major painpoint you are solving for clients Make sure you can support sales (e.g., mktg/ent/travel) CRM is set up to track and nurture all leads to sales Relationship managers are in place for post sale Operations team is ready to fulfill promised product Remove all sales ―friction‖ from the process
How to Structure Sales Team? Decide Inbound or Outbound Sales – Dictated by your price point and complexity of sale Decide Sales Territories – Typically split by geography, channel or target industry Decide Compensation & Commission Plan – Based on price point and complexity of sale – Should be heavily weighted to pay-for-performance Decide Salespersons – Your early hires will make or break the business – Don’t be ―cheap‖—hire the best sales guys you can get
A Good Salesperson? Strong Track Record of Past Sales Success – A history of meeting and exceeding sales quotas Big Rolodex of Target Buyers in Your Industry – At target department level, not company level A Hands-On Doer in the Beginning – Not a manager of others; someone who closes sales – Someone who can create their own leads cold calling Someone Who Understands Startups – Doesn’t need big expense accounts or assistants
Remove All Sales Friction? Resistance to Company/Brand – Instill trust, professional look, awards, press, BBB, etc. Resistance to Product/Service – How do your features/service compare to competitors Resistance to Pricing – How do your prices/value compare to competitors – Consider ―freemium‖ techniques to get them in risk free Resistance to Policies – Shipping, returns, refunds, guarantees, customer support – You want 100% customer friendly policies Resistance to User Experience – Site speed, live chat, inventory in stock, fast shipping – Page design, search, photos, videos, samples, short forms
How to Identify 1st Customer? Laser Focus Your Marketing – Prioritize relevant keywords in Google – Have a presence at all key trade events (speak/exhibit/sponsor) Laser Focus Your Sales Team – Identify clear list of targeted clients and titles Consider Strategic Partners – What company can most benefit from your product – What channel partners can help you take your product to market Consider Creative Pilot Programs – Identify pain points for clients, and have them co-design solution Consider Creative Incentives – Revenue share, equity stake, exclusivity period, etc.
What to Charge 1st Customer? Know Where Your Competition Is Priced – Offer discount for same thing, or a valued offering if more – Hopefully you have a unique selling advantage, not ―me too‖ Know Where Your Costs Are – Price it with a reasonable gross margin to cover costs Consider Freemium Techniques – Offer some basic product for free to bring them in risk-free – Upsell them on bronze, silver, gold versions over time
How to Close 1st Customer? Solve Material Pain Points for Clients – Don’t focus on your product, focus on your client’s needs – Emphasize the financial benefits from client’s perspective Don’t Let Them Know They Are The First Client – Come across as seasoned pros, with big client pipeline Instill Confidence and Trust – Flash your big awards, press mentions, VC names, etc. – They don’t want to risk you going out of business Be Flexible With Your Terms – Do not dig in on pre-set ideas, be flexible to market demand – Be clear on their desired budgets and timelines
Developing a Sales Funnel? New Leads – First contact with a new prospects Qualified Leads – Post exploratory calls where client has expressed interest Proposals Sent – Where official proposals/contacts in client’s hand for review Clients in Pilot Program Tests – Both parties are setting up tests to make sure working Closed Clients in Long Term Contracts – Have signed your agreement for 1 to 3 years Repeat Sales Process – Train sales team to ask for the next sale when ready
How to Track Leads & Sales? Implement a Basic CRM for Sales Team to Use – – – – – Something like the low-cost version of Salesforce.com Or, set up a simple shared file in Excel or Google Drive Make sure to keep it updated weekly or monthly Enter all key client contact information (so not lost) Track status of lead and clear last/next steps Create Basic Sales Funnel Reports – Track leads/conversions/sales by team member & overall Optimize Your Sales Team Members – – – – Cross fertilize best practices Target sales efforts in defined verticals for easy reselling Celebrate and reward successes Weedout failures (only 1 in 3 hires will be a great)
Key Metrics to Optimize? Gross Margin is Better Metric Than Revenue – Keep sales team educated on what drives your profits – Harder to manipulate to hit sales commissions Manage Each Component That Leads to Sales – – – – – Contacts made by salespersons Leads converted to proposal stage Proposals converted to pilots/contracts Transaction size Margin amount Look for Upsell and Cross-Sell Opportunities – Talk them up from ―Bronze‖ to ―Gold‖ Edition – Talk them up from 10 users to 50 users – Upsell them the ―hotel‖ if they buy the ―air‖
Developing a Sales Culture? Create an “Everyone Sells” Culture – All employees can take a role in sales – Talk about company to friends and via their social media – Launch a ―refer a friend‖ program for rev share Create Clear Goals to Rally Around Each Month – Put up a public progress chart to goal – Ring the bell to celebrate closed deals Create a Healthy Competition Within Sales Team – Provide added bonus for top salesperson each month Create Unlimited Upside for Sales Team – The more they sell, the more they make
Driving Repeat Sales? THE FIRST SALE IS NOT AS IMPORTANT AS THE REPEAT SALE!! You Are Doing a Good Job Only If Client Buys Again – Repeat sales percentage is the most important metric in your business Deliver a World-Class Experience for All Clients – Fulfill on the client’s initial expectations—hit goal, timing and budget Own Up to Any Mistakes and Provide Refunds If Necessary – A happy client gains you one new client, an upset client loses you 10 Have Your Follow-up Repeat Sales Process in Place – You won’t drive repeat sales unless you are asking for them Stay on Top of the Moves of Your Competition – Make sure you always know where they are on price – Keep your features and functionalities ahead of the others – Keep your eye out for other interesting startups in your space
How VC’s Define Traction? What Are Your Cost of Acquisition Metrics in Marketing – – – – – What tactics are driving you the most leads? How much is it costing you? What percent of your revenues is your spend? How quickly does it pay back? What is your customer lifetime value as a multiple of spend? What Are The Results of Your Sales Efforts – – – – – – – – – Who are you selling to—how hard is it to reach them? How many decision makers involved to close a sale? Do they have established budgets for your product? Are leads converting into sales? Are pilots converting into long term contracts? What is your sales cycle—timeline to closing? How large is your client pipeline—are they brand name to impress investors? How large are your revenues? Are your driving any repeat sales?
Further Reading http://www.RedRocketVC.com • Lesson #21: How to Set Sales & Marketing Plan • Lesson #25: How to Structure Sales Team • Lesson #26: Designing Sales Incentives • Lesson #127: Screening Sales Candidates • Lesson #130: Driving Sales Means Driving Key Metrics • Lesson #143: Upselling, Cross-Selling & Freemium Techniques • Lesson #144: Remove All Friction From Sales Process • Lesson #161: Create an ―Everyone Sells‖ Culture @georgedeeb
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