Cover Story

 

How To Be a Sales Ninja: In-Depth Sales Strategies From the Trenches

 

By Local Entrepreneur Sales Experts

 

Nothing is more important for your startup than a solid sales strategy. Too many entrepreneurs focus only on product development early in their company's existence thinking a sales plan can wait.

Few entrepreneurs claim to have overestimated the time required to ramp up sales. Most will tell you to plan on twice as much time and money than estimated.

To help you formulate or enhance your sales strategy, Launch asked four local startup executives to offer tips and tricks in five different key areas to establish and maintain an effective sales team.

 

Lead Generation

By Matthew Lampros
HitYourQuota.com
President

 

First things first; remember that lead generation is the act of finding a target customer with symptoms of the pain you solve. If you find those prospects, you generally close those prospects. Lead generation is not the act of convincing the known universe to visit your Web site and view your demo. Instead, be willing to spend the time hunting through the pile until you find a good prospect. Don't be worried about the word "no" unless a target customer is the one using it.

Lead generation techniques that work include:

Good

Use 30 seconds to sell 10 minutes, 10 minutes to sell one hour, and one hour to close the deal. When you call on someone remember you are interrupting them. Don't try to meet with them right away; use this 30-second call to ask for a 10-minute meeting. Prospects will attend meetings if the topic or agenda feels timely, relevant and actionable. Create a meaningful 10-minute "mini-conference" and invite them to "attend." During that call you present, ask questions and ask anyone who qualifies for a one hour follow-up meeting.

 

Better

Work your network. Twenty-five percent of the people who bought from you in the past will buy again. Forty-five percent of the people currently buying from you will buy more and 60 percent of your referred prospects will buy from you today. If you have a solid list of current and past customers, call each one and ask for more business and for a reference or two.

 

Best

Change your logo, tagline and content to be focused on getting the phone to ring. Remember that your target customer has a problem they are working on solving. Your logo and tagline should make them think, "That sounds like someone who can help me fix this problem." Prospects who call you close at a 60 to 80 percent rate.

 

Ninja

Change your company name or DBA to an action phrase. We changed ours from eLampros to HitYourQuota.com and saw a 400 percent increase in leads. This works with all three methods above. When you call someone and say, "I'm with HitYourQuota.com and I'd like to set 10 minutes to talk to you about a research project we just finished with Duke University on advanced closing techniques," they take the meeting.

When you call past and existing customers and say, "We've changed our name to HitYourQuota.com" their interest is piqued and they offer more referrals. Finally, when someone sees your billboard with an action phrase company name, they are significantly more likely to remember your name and to call you.

Sales is often referred to as a numbers game — it is. The two numbers that matter most are the number of prospects you are working and your close percentages. Target customers buy more often (10 percent) than non-targets (1 percent) and people that come to you buy more often (60 percent or more) than anyone else.

 

 

Shortening Sales Cycles

By Tim Hunt
Founder & CEO
Lingotek

 

Phil Windley spoke recently about the distribution of customers in any market. He said at the head of the market there are a few large entities that are willing to pay more for new technology. In the middle of the market the customers don't have as deep of pockets and often need lower prices tailored to their needs and size. In the long tail customers typically look for no cost or very low cost solutions like open source technology.

Early stage businesses fail most often because they don't get to cash breakeven before they burn through the investor's money. Often entrepreneurs have to try different business models until they land on one that works. When the sales cycles are long you can burn through a lot of cash before you know if your business model is viable. A long sales cycle is a risk. I have seen some companies with 6 to 18 month sales cycles get to the end of their cash before they know if their business model works.

Some entrepreneurs, me included, have made the mistake of ignoring the sales cycle in developing the business model. Time and time again I see early stage companies with great new technology price their systems for that small segment at the head of the market only. I have consulted with several companies whose initial entry price of their software is $80,000 to several hundred thousand.

Price often affects the length of the sales cycle; the higher the initial price, the longer the sales cycle. However, lowering the price does not always ensure a shorter sales cycle. When your software has a large ROI it isn't always wise to lower the price just to win customers sooner.

A better business model is found in the practices of the larger successful corporations. Looking at several companies I found none of them had an initial price of $80,000 or more. All of their systems were priced on a graduated scale that allowed smaller customers to purchase their systems. Likewise larger corporations were able to purchase entry-level systems and expand them within their organizations without a large upfront price tag.

For example, at Oracle some of their sales are over $10 million for a single customer, however, they price their software depending on the number of processors running the software. This allows smaller organizations to get into Oracle for around $35,000 while the larger organizations can purchase larger multiple processor systems at higher prices. Likewise, SAP sells its ERP software on a per user basis. The initial server side of the software runs about $6,800 installed and customers pay about $3,000 per full license and $900 for a limited use license per user. Smaller organizations can purchase an ERP system for under $20,000 and add users as they need.

The key to shorter sales cycles is getting the first part of the sale with the customer. It is always easier to sell more to existing customers than to get new customers. You see this with ink jet printer sales. They sell you a cheap printer to get in the door and then sell you expensive ink cartridges to make the big money.

 

 

The Power of Planning

By Jay Pillai, Ph.D
Vice President of Sales and Strategic Business
FatPipe Networks

 

Globalization, coupled with advances in communication technology has been instrumental in lowering business barriers. This has resulted in a palpable quickening of business and sales cycles. Competition is brutal and the cost and effort of acquiring new customers and retaining old ones is significant in the backdrop of shrinking profit margins. To stay ahead in such an environment, it is critical to utilize every advantage available.

Often overlooked is the power of planning and the crucial step it plays in the sales process. A shotgun approach in lieu of planning may result in some sales successes, but in the long term, the payoff is limited.

The old dictum, "If you fail to plan, you plan to fail," is particularly applicable to salespeople in all walks of life. If you call on a customer without having a plan in place that outlines your approach, knowledge about the customer, what are his or her buying imperatives, and how you bring value to the customer, you are setting yourself up for failure. Knowledge and a plan give you the power to outsell your competition and show the customer that you deserve their business.

Before you call on a customer, invest a few minutes of your busy schedule in developing a "pre-call plan." It need not be very elaborate but a game plan which defines the purpose of the meeting, what you want to get out of the meeting, what your customer should get out of the meeting, the support materials you need — brochures, product specification etc. along with a follow-up plan. By doing this, a sales person is inculcating discipline in their efforts with a methodical approach to sales. It impresses customers because you display a surefooted approach due to having planned adequately. This can be the difference in a customer deciding between you and the competition.

An example: Ben Duffy, a salesman in a small ad agency found out a major tobacco company he had been trying to get into, was unhappy with their current ad agency. He secured an appointment with the CEO. He knew that his biggest drawback was that his ad agency was small and not known well. The night before, he sat down and put himself in the mind of the CEO and realized the CEO would have a lot of questions. He listed 20 questions that he thought he might have to answer. He was right. When the questions began, Ben told the CEO he anticipated being asked these questions and stated he wrote them down along with answers. They exchanged lists and Ben was only off on three questions. Impressed that Ben would go to the trouble of trying to understand him and the tobacco company, the CEO gave him the business. A legend in sales techniques was born and planning was the keystone that clinched the deal.

Good planning never goes out of style — rather it is an essential tool that a salesperson can use over and over again not only to win new business, but also to keep your current customers in your camp for life.

 

 

Closing a Sale

By Chris Knudsen
Sales and Marketing Consultant

 

Effectively closing a sale is a process that, if followed correctly, will help you close most potential clients. Here are some tips:

 

Resolve Concerns

The most important thing you can do to close a sale is resolve concerns. The key to resolving concerns is to listen to the customer. I cannot overstate how important listening is to properly resolving concerns. Use the following four steps to resolve customer concerns:

>> Listen first to the concern.

>> Restate the concern to make sure you are clear on the objection.

>> Acknowledge the objection with real empathy.

>> Overcome the objection. Don't get offended. If you are at this point the customer wants to buy.

You may have to go through this process several times before a client is ready to buy. Furthermore, you may not be able to resolve all concerns. Sometimes budgets change. Sometimes the timing is wrong. Sometimes they just don't see a match no matter how hard you try to pitch to them. If you've done your homework beforehand you should be in front of a qualified prospect. Most qualified prospects will have some concern. Overcome it by implementing the four steps and then ask for the sale.

 

May I Have Your Business?

I've sold and I've been sold to. Most salespeople will try to close a sale by asking where they should send the contract or the bill. That's the wrong approach.

I almost always make it a point to ask for the sale. If I feel that concerns are resolved and the customer seems ready to buy, then I ask: "(name) may we have your business?" If they say "yes," then we complete the deal. If the person says "no," then I go back into the above four-step "resolve concerns" mode and find out why. Once that concern is resolved, I then ask for the sale again. It's a simple cycle that leads to closing a higher number of sales.

Here are several other pointers for effective closing:

>> Always make sure you are talking to the M.A.N. (Money, Authority, Need).

>> Build trust by being genuinely interested in the customer and their needs.

>> Ask good questions, listen and take notes.

There is no trick to closing sales — dump the Zig Ziglar books! Resolve concerns and ask for the sale then you'll close qualified prospects continually.

 

 

Incentivizing Direct Sales Staff

By Tim Hunt
Founder & CEO
Lingotek

 

Direct sales is a game of numbers. It is hard work. It is often a matter of following a simple repeatable process again and again with different prospective customers. There is some skill in direct selling especially in the closing, but the truly successful sales representatives know it is mostly hard work.

Great direct sales representatives have learned that you don't win all accounts no matter how good your sales skills are. You make the most money if you can make the best use of your time and work with as many potential customers as possible. The inexperienced sales representative is constantly modifying and changing his or her sales approach and materials. They waste a great deal of time tweaking their sales approach instead of going after as many potential customers as possible.

Great sales representatives have learned that tweaking the sales approach occurs naturally the more experience you have with customers. They don't waste time modifying their approach in isolation.

From the perspective of a sales manager, how do you get your staff to stay focused on working with customers? The answer is in the incentive plan.

Most sales incentive plans focus on the commissions. Though this does provide incentive to sell, it doesn't provide incentive to do the hard tasks that result in sales. Grant Fraser, the CEO of Navigator Business One Solutions, has developed a strong incentive program to ensure that his sales reps close sales. Grant is an entrepreneur who has built and exited multiple companies. He has built all of his companies by selling someone else's technology.

To ensure that his sales staff stays on task he has developed an incentive plan that focuses on the numbers. His sales representatives receive 1 point for each phone call, e-mail or other contact they have with a customer. He calls this an activity. They receive 10 points if they move a prospect from one stage in the sales process to the next. They receive 50 points if they bring in a qualified lead and 100 points for a close.

At closing, they still get their standard commissions, but these points add up to additional bonuses each month and quarter. Grant establishes a standard quota that each sales rep is to achieve each month and when they exceed that quota they receive roughly $1 per point. They receive no bonus for meeting or being below quota. His sales reps get between $100 and $500 each month in bonuses. More importantly Grant is able to see daily, weekly and monthly that all sales reps are accomplishing the tasks that lead to closed sales.

There are many different ways to incentivize sales staff. The great sales reps know that it is a game of numbers and are use to working hard. Still, if you would like to ensure that the hard work is done, it doesn't hurt to include something in the incentive plan that motivates the sales rep to get the job done.

 

Launch - Spring 2008

 

 

For the full "digital magazine" version of Spring 2008, visit: www.nxtbook.com/nxtbooks/growutah/launch_2008spring/