Originally published: 14/03/2018 15:52
Publication number: ELQ-84370-1
View all versions & Certificate
Publication number: ELQ-84370-1
View all versions & Certificate
How to Start Selling B2B as a Startup
This will tell you how to generate your first round of B2B sales as a startup founder.
by Mike LingleSuccessful entrepreneur and former software developer advising tech startups on fundraising, strategy, sales, and marketing.Follow 62
Introduction
As a startup founder, it’s your job to bring in those first accounts. First of all, most of us don’t have the resources to hire a sales team when we’re starting out. Second, we learn a lot by talking to our potential customers face-to-face—how they think, the language they use, what their pain points are, and what makes them say yes or no to our offer. Third, it’s only once we understand a process thoroughly that we can teach other people how to do it. Finally, it’s only by understanding what works that we know who to hire for our sales team.
Jason Lemkin, serial startup founder and venture capitalist, thinks it’s crucial for founders to close the first batch of B2B deals themselves.
“The CEO/founder should close at least the first 10 (or 20 or whatever) customers. That way, she knows. She knows the process, what works, what doesn’t. It’s OK if you are ‘terrible’ at it. What matters is that somehow, someway, you still get those 10 payingcustomers closed.”
Fortunately, you can iterate a sales process over time just like your product. What’s important is that you put a basic sales system in place to bring some money in the door and use your early users to improve the product.
They key is to iterate your sales process over time—just like do with your product. Start by putting a basic sales system in place to bring some money in the door, and then use feedback from your early users to improve your product.
Here’s a simple sales process for B2B sales to get you started:
Determine Your Value Proposition
Identify Your Targets
Set up a CRM
Generate Leads
Qualify Your Leads
Take the Meeting
Close the Deal
Iterate Your Product
Don’t Give Up
- Step n°1 |
Step 1: Determine Your Value Proposition
Your first step is to figure out why people should buy your product in the first place. It may seem obvious to you, but many of the people you talk to won’t understand right away. They’re used to doing things a certain way, and you’ll have to convince them to get out of their comfort zone.
A lot of startup founders include their value proposition (“There are three kinds of software value propositions. Software that increases revenue, software that reduces cost, and software that promises improved productivity.”) in their elevator pitch (“We solve [problem] by providing [advantage], to help [target] accomplish [target’s goal]. Here are [metrics that prove our claims].”). This language will influence the rest of your sales process.
If you have multiple customer segments (more on this in a minute), it helps to have unique value propositions that address each segment’s specific pain points. However, don’t make this too complicated. Your value proposition should be clear and simple so prospects understand it immediately.
Big companies are under constant threat of disruption these days. It can be powerful to explain how the landscape is changing, and your potential customer will be left behind if they don’t get with the times. Check out my article on how teaching works better than sales, and then Read The Challenger Sale.
For best results, quantify your benefit as accurately as possible. Saying “Our tool increases your team’s productivity” isn’t enough. Your prospects want to hear something more concrete like “Our tool increases your team’s productivity by 30% in the first 30 days by automating 8 of your daily tasks.”
Keep these 10 characteristics in mind when you write your value proposition:
1. Is embedded in a great business model
2. Focuses on what matters most to the customers
3. Focuses on unresolved pains
4. Target few jobs, pains, and gains, but extremely well
5. Goes beyond functional jobs and addresses emotional and social jobs
6. Align with how customers measure success
7. Focuses on jobs, pains, and gains that people will pay a lot of money for
8. Differentiate from competition
9. Outperform competition substantially on at least one dimension
10. It is difficult to copy
(Source: strategyzer.com)
You probably don’t need to mention competitors unless you’re asked, but make sure you’re ready to explain why your product is better for your customers. Get granular if you have to, like “We boost your productivity in 30 days, which is 90 days faster than Competitor X.”
- Step n°2 |
Step 2: Identify Your Targets
Next, determine who needs your product.
Start at the organizational level. What type of company would get the most value from your product’s benefits? Real estate firms? Law offices? Retail stores? Universities? Other startups?
Next, narrow your scope as much as possible to the types of businesses that would get the most value out of your product over a long period. Remember: You don’t just want customers. You want customers who pay year-after-year, forever.
For instance, instead of targeting a broad group of “real estate firms,” you might target “commercial real estate firms that specialize in deals with 10+ year leases with extensive remodeling.”
Finally, identify the type of person in that organization to sell to. This can be tricky. Ideally, you want to sell to the person who directly experiences the pain your problem solves, but that person isn’t always the one who makes purchasing decisions (“There are five groups of people you have to pay attention to in any B2B sales situation. Each of these people, or groups, is influenced by how your product or service will affect them personally in their job. They are also looking at how your product or service affects their company. You have to convince so many people in a B2B sale, which is the reason the selling cycle takes so long.”).
For example, Bob is a human resources (HR) manager for a Fortune 500 company. He’s frustrated every day because he’s stuck using multiple tools and a series of Excel spreadsheets to handle his HR tasks.
Bob’s life would be easier if he had a comprehensive HR tool, but he doesn’t have the authority to purchase one. He needs approval from Stan, the HR Director. But Stan isn’t involved in the human resources department’s’s day-to-day work. He doesn’t feel Bob’s frustration.
How you sell your product depends on the person: if you’re talking to Bob, you have to sympathize with his frustrations and get him to advocate for you to Stan. That’s a tough hand-off, so you’ll probably also need totalk to Stan and frame your benefits in a way that directly help him. You’ll often end up having multiple meetings at the same company during a B2B sale. In fact, more meetings is a sign that your sales process is working.
Build a buyer persona for each target. A buyer persona is a composite of each customer segment; an avatar of the person you want to sell to. They help you focus on the needs of onlythe people who would buy your product.
Fill it with important information about their demographics, problems/pains, wants, interests, etc. For more on putting together your buyer personas, check out this post: How to Get in the Mind of B2B SaaS Customers - Step n°3 |
Step 3: Set up a CRM
Every sales process needs a customer relationship management (CRM) tool to organize the sales workflow. First, it helps you track the (hopefully) many conversations you’re about to have. Second, the good ones can track email opens and even website pages visited, so you get a full picture of how interested a person or group actually is. Finally, CRMs help your team stay on the same page and share information smoothly.
There are many CRMs to choose from. Most have a free tier, which can be great for starting out. Your CRM should integrate with whatever system you use to capture leads online and whatever tool you use for email marketing.
Your CRM is like a pipeline. Leads come in and move through each phase of your workflow. Here’s an example of HubSpot’s CRM. Leads fall into the far left column and they’re moved through each phase toward the right until the deal is closed or lost.
You can assign a percentage chance of success to each stage. When you combine that with an estimated dollar value for each deal, you can get a back-of-the-napkin estimate of how much revenue your pipeline will turn into.
A CRM organizes your contacts so nothing is lost and you’re reminded to follow up on every lead. It’s a useful way to keep track of your sales workflow without trying to remember everything—which you can’t. As you refine your sales process—and especially when you hire a sales team—your workflow will become more complex. Your CRM will give you a way to track progress and share leads with each other.
by Mike LingleSuccessful entrepreneur and former software developer advising tech startups on fundraising, strategy, sales, and marketing.Follow 62
