What founders should know about Sales?
Building enduring customer relationships
It’s important to think about selling as a long process rather than an immediate buying and selling; a transactional relationship that only happens once.
The process of selling is a long game. More than we think, our customers can become relevant even if you move on to another company. Therefore, the most important thing about sales is the goal to create an enduring customer relationship. In order to create that, trust becomes paramount. In order to establish trust, it’s important to understand what the customers truly needs in order to offer something that truly resonates. A one time off mindset, will deter any kind of repeat purchase and a relationship that is one off.
Understanding of the buyer’s journey
The most important thing in sales is to truly understand your buyers. A good sales person will spend most of his or her time listening and asking questions. Through active listening you will start to uncover insights that will help inform a repeatable sales process that can inform not only your process but also feedback on your product and improvement especially when the founders are starting to launch a new product.
In order to understand the customer buying journey, the sales person needs to understand how the person thinks, what motivates them, what they prioritize, what the areas of opportunities are and what challenges the buyer is currently facing.
Understand the stage of the buying process and measuring progress will also be critical.
As founders, the team can create a “sales navigation system” to track the stage of the buying process. This will help optimize the sales funnel and keep track of the leads that come in for each sales person.
An example of the buying process can start with
In the sales navigation system, it will be important to set clear goals and activities as well as tracking percentages of the probability for each qualified lead in the process.
In additional to optimizing and creating an efficient sales process with the help of having the sales navigation system in place, the sales navigation system helps keep track of performance of individual sales reps. The customization of training each part of sales process is important, since each sales rep will perform differently in the different parts of the sales process. Having a system to track will help the company identify specific content and training at the specific processes-shortening the time it takes to close the entire deal. The process itself also helps to understand what process is necessary and which to eliminate
Understanding the sales learning curve
The sales learning curve serves as a realistic representation to help founders understand what kind of sales person to invest in and the time it takes to close a deal depending on where the company sits on the curve. The situations that the founders often confront with the learning curves include new product launch, route-to-market change (for example from direct to indirect or vice versa), or new market penetration. Therefore, in order to successfully forecast sales, there is a learning curve that happens in order to learn from the market and customer feedback. The learning curve also applies to new hires as it normally takes up to 6 months in order for someone to be fully proficient in their role. In fact, many startup founders become also the first sales person in order to learn and establish a sales playbook the resonates with the product/services to the market conditions.
*More on the sales learning curve: https://medium.com/@viria/the-sales-learning-curve-decac0e654b3
Understand how sales professional think and what motivates them
Founders are often motivated by solving problems and making decisions that are critical to the survival of the business. At times, founders may overlook key aspects that are important in working with sales professional. It’s important to truly understand the motivation in order to strike a high performing culture. It is possible that the sales professionals can be motivated by monetary reward to which clear metrics and how the sale is rewarded will guide the behavior. The sales compensation is central to creating the right sales organization at the right stage of the company. A person who has led a large sales organization with a clear reputable sales process will be different from a sales person that is working in an early-stage startup where the process is in discovery mode trying to learn and understand from customers versus executing for growth — trying to grow as quickly as possible. Hiring the wrong sales person is indeed quite a common mistake that founders tend to make.
Understanding sales forecasting
In order to understand sales forecasting, it’s important to understand the whole sales cycle, the duration to when a lead comes into the sales funnel. We can use the sales navigation to track how much time it takes to qualify a lead until the deal closes. It’s important to establish the same system across the organization to set the same standard and to better anticipate what would be accurate forecasting. Sales forecasting like any process, is iterative and takes learning. It sometimes takes years, even for an experienced CEO to get an accurate sales forecasting but with the right data-driven process, it will be easier to optimize and measure where to best prioritize and focus.
This blog is captured from an interview with Professor Lou Shipley, and the content from Tech Sales course at the Harvard Business School taught by Professor Mark Roberge and Professor Lou Shipley.
