Keep your mouth shut and listen to your customer. I mean not all the time, but focus more on asking questions about their problems and how they solve it right now. Your job is not to ask them to solve your problem, you job is to figure out what is it that they are not saying. It is an art. The biggest challenge in the sales process is the closing. In my experience, there are people who know how to close and there are those who have no clue. The good news is that knowing how to close can be learnt. A lot of people especially engineers and people from the analytical side of things think that sales happens on its own, the truth could not be far from that. Sales is a process, just like product development. I have written quite a bit about selling and marketing and when you do what. Closing is sales, you should always be closing, this is when the rubber meets the road. The biggest mistakes that I have seen done is not knowing how to close and also not knowing when a close is unlikely. I have seen team members keep going after a prospect when the signals were clear that they were never going to sign the contract. The tell tale signs are, when you hear:
Your product does not have this specific feature that we cannot live without, once you build that feature we will sign… Not gonna happen! just move on. If you really believe that they are being serious, then you can tell them sure, why don’t we sign the contract and include in it that we will build that feature or you can say hey, we will see if more customers want this feature and then we will include it in our product road map and they will be the first to try it. However, they need to sign an agreement to move forward.
The second biggest not gonna close signal is when a customer wants a free trial. Don’t do it, just don’t! If they don’t see immediate value they are not going to use the product anyway. A strategy to solve this is tell them sure we could do that. The customer should sign an annual contract with a 30 or 60 day money back guarantee. You also know if they are serious when the customer commits to do that.
The third inefficient thing to do is to be nitpicky about the contract. Be specific about your goal on what you want to achieve. Sign the agreement and move on. The reason I have seen teams struggle with this is always due to ego, pride and win-lose attitude. I always try to influence the team to focus on a win-win and find that higher ground. Remember, to do a win-win deal only one party needs to think win-win. I have written about Win-win, it is a great strategy.
It was great to see Tyler Bosmeny, founder and CEO of Clever, starts off the 19th lecture of How to Start a Startup class with an overview of the Sales Funnel, and how to get to your first $1 Million. He goes through the process really well, in addition to the above points he talks about the most obvious mistakes made by first time founders, and that is not following up. I cannot emphasize there is nothing more to sales than follow up, follow up and get to a Yes or No decision.
Dalton Caldwell, founder of imeem and App.net and Partner at Y Combiantor, and Qasar Younis, founder of Talkbin and Partner at Y Combinator, then perform an investor meeting roleplay to give you a taste of how it actually might look behind the scenes. This is an example of how to close on an equity sales.
All the above strategies work for any sales process. Here are some references that is given in the lecture and notes:
- SaaStr – From-the-trenches sales advice by Jason Lemkin, founder of EchoSign
- How I Raised Myself From Failure to Success In Selling by Frank Bettger (1949)
- Five ways to build a $100 million business by Cristoph Janz – Must Read
- Pitching Hacks! How to pitch startups to investors by Venture Hacks