Even if your startup is running successfully, it can take a lot to make the jump to big sales. Avoid these sales myths to help give your company a steadier start.
You’ve secured seed funding, validated your solution with real potential customers and worked the kinks out of your prototype. You have trusted mentors and advisors. You’ve turned a couple of early adopters into paying customers. Now, “all” that’s between you and the hockey-stick revenue curve is scaling up those early business-to-business sales.
No entrepreneur wants to undo all the hard work that’s gone into reaching this point, so it’s important to understand and avoid common misconceptions that can interrupt the company’s ability to ramp up B2B revenue. Here’s what to watch.
Myth No. 1: Now that you have funding, it’s just a matter of hiring the right VP of sales and things will take off.
For company founders, it can be a relief to finally make this key hire. However, finding the right person isn’t usually as straightforward as expected; sales executives tend to interview well, so it’s easy to make a mistake. You might want to create an advisory committee specifically to assist you in making this hiring decision. If you already have a close customer, consider utilizing him or her in the process. Given the average size of seed rounds in the United States, entrepreneurs often have one chance to get this hire right. Seek a sales leader who brings the deep industry experience required to build and execute a winning sales strategy, demonstrates that he or she can be the executive face of the company to customers and has the willingness to perform typical marketing functions (such as creating collateral and conducting market research). Most importantly, hire a person who has the energy and willingness to “carry a bag” and lead by example in closing sales.
Myth No. 2: Once customers see how great the product is, the right sales team won’t have any trouble selling it.
Don’t be taken in by this siren song of the startup world. Demos are important, but to really succeed, try leveraging referenceable customers. Learn from early adopters about the messages that do and don’t resonate. Create collateral that matches product features to customer benefits. Presenting a quantified and proven value-add proposition gives the sales team the tools to help close business.
Myth No. 3: Nobody can sell products as well as the company that created them.
One of the best ways for a startup to learn how to sell its solution is to sell it themselves. However, building out a direct sales force is costly and time-consuming, especially when successful B2B resellers abound in virtually every industry. Leveraging strategic distribution partnerships may produce sales faster and more cost-effectively than knocking on doors or building a national direct sales team. Try connecting with resellers or distribution channels that are looking for new solutions to strategically expand what they have to sell, who already have relationships with customers and who understand potential clients’ decision-making and budgeting processes.
Myth No. 4: Corporations don’t do business with startups.
Oh yes, they do. Corporations are on the hunt for innovation. They have large and well-understood challenges and unmet needs. If they could have solved these themselves or with traditional suppliers, they would have. Second, many decisions in major corporations are made at the division or departmental level rather than at the top. There are plenty of decision-makers and general managers who feel more leverage in being a big fish in a smaller pond. There are others who get satisfaction from being on the ground floor of a promising technology or innovation. All of this plays to a startup’s strengths.
Myth No. 5: Landing one big client will solve everything.
Signing a contract with a six-figure-per-year customer is great news, but the real validation of the sales strategy comes when the startup replicates that sale three, four, five or more times, without drowning in product, pricing or customer support issues.
Myth No. 6: Closing sales is worth it, no matter what it takes.
Often not true. Successful entrepreneurs—and excellent sales VPs—don’t lose sight of margins or the cost of sales. And that’s the bottom line. Misconceptions aside, a successful startup knows that when it comes to sales, everyone at the company does it, and does it well. And while effectively scaling your sales efforts isn’t easy, clearing up common missteps can pave the way to help do it right.
Source: American Express Open Forum Blog