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 i that somehow, someway, you still get those 10 paying customers 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.
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
Qualify Your Leads
Take the Meeting
Close the Deal
Iterate Your Product
Don't Give up
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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.
Many startup founders include their value proposition in their elevator pitch. This language will influence the rest of your sales process.
There are three main types of value propositions, and you may be able to combine more than one.
Here's a template for your elevator pitch:
“We solve [problem] by providing [advantage], to help [type of customer] accomplish [customer’s goal]. Here are [metrics that prove our claims].”
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.
For example, Rocket Pro Forma is useful to two customer segments with different value propositions:
Startups who need to quickly and confidently create their financial projections
Accelerator programs that need to provide financial education and support to their startups.
I use different language, offers, and landing pages to speak with each group.
Big companies are under increasing threat of disruption. 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 book.
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 from Strategyzer in mind when you create your value proposition:
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.”
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 over a long period? Real estate firms? Law offices? Retail stores? Universities? Other startups?
Next, narrow your scope as much as possible to these types of businesses. 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:
The Financial Influencer(s)
The User Influencers
The Champion or Sponsor
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 to talk 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 are a sign that your sales process is working.
Also, many of the sales conversations happen behind your back! Bob and Stan may have a conversation that determines the success of your sale—without inviting you or even letting you know. This is the hardest part of B2B selling. You need to constantly be influencing an entire group of people, even when you're not in the room.
Keep your messaging short and targeted for each type of person. Feed them sound bites and compelling data that they can use to sell you to their colleagues. Give them useful info that makes them look smart to the people they work with.
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 only the people who would buy your product.
Fill each persona with important information about their demographics, psychographics, 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.
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 whichever system you use to capture online leads, as well as the tool you use for email marketing.
Your CRM contains a deal pipeline for qualified leads, which move through each phase of your workflow. Here’s an example of HubSpot’s CRM. Qualified leads start in the far left column, and then they’re moved through each phase toward the right until the deal is closed or lost.
I would only add qualified leads (see below) to your deal pipeline, otherwise you'll end up with too much clutter. You want to focus only on those leads that only have a good chance of purchasing from you.
You can assign a percentage chance of success to each stage of your pipeline. 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.
4. Generate Leads
Here are the main ways to find potential customers:
Inbound marketing: Create content for potential customers to find. You can also run events or speak at other people’s events. The goal is to either convert them into customers on the spot OR convert them into leads (in person by asking for their business card or on the Web by collecting their email address) and then building a relationship with them that first turns them into a qualified lead (see below), and then eventually turns them into a sale.
Outbound marketing: Cold-calling, cold emailing, connecting over LinkedIn, etc.
Word of mouth: Do such a great job that people refer you every chance they get. You can also ask your customers for referrals.
Ask your friends who they know: One approach is to ask them for advice, and get their feedback on your product. You’ll learn a lot, and hopefully they’ll either buy or refer you to other potential customers. The closer these contacts are to your ideal user, the better information and referrals you’ll receive.
Short and Sweet Deals
If your average sale is less than $5,000/year, you’ll want to work towards a zero-touch, self-service model. Customers should find your website, learn whatever they need, decide to buy, pay, log in, and use the application without a salesperson’s involvement.
In a perfect world you want an individual employee to be able to purchase without having to ask anyone else in their company. You might offer a free version that allows your product to spread through an organization until they reach critical mass and need to buy the paid version. Successful examples of this strategy are Slack and Dropbox.
That said, in the beginning you must close deals in-person to understand how to qualify leads and make sales—even if you’re getting people to try something for free. These personal interactions are too valuable to skip. Only then will you understand what they’re thinking and why they buy—and only then will you be able to automate your sales process. As venture capitalist and founder of Y Combinator Paul Graham says:
“[At first] do things that don't scale"