Sales 101

What is a company without sales? Answer: it’s not a company.

While it may seem obvious, sales is the lifeblood of any company. Without someone to buy your product or service you are not in business. Now there are a lot of ways in which consumers can spend money on your goods or services. In some cases they can go direct to your stores, or your website. In other cases you might OEM your technology through large partners. No matter what, you have to have sales.

My theory on companies is that if you have a strong sales pipeline with happy customers, you can figure out how to run the business profitably. There are a thousand and one ways to extract more revenue from your existing customers to ensure that you have higher profit goods or services. With strong sales, you can find a way to keep costs at such a level that you make a gross and net margins that you need.

Strategy One – Start Talking with Customers before You Have a Product or Service

One of the first things I recommend doing for any entrepreneur is to go out and find customers for your product or service. Even if the product or service is not ready, you can still talk with prospective customers to gain their insight on what might work. Too many entrepreneurs have a “build it and they will come” philosophy which means simply build your product or service and the customers will be there. However, especially in technology, a lot of software has been shelved due to a lack of customer demand. One way to make sure that you have a product or service that will provide value to your customers is to open discussions early with them and understand one very important thing: what are they willing to pay for?

The idea is not whether they like your product or service, but rather when will they part ways with their money? Without a strong answer to this question, I would suggest that you don’t launch your start up.

Strategy Two – Go Get Letters of Intent

Start talking with your potential customers before you launch your product or service and try to get letters of intent to purchase your goods. These letters of intent, or LOI’s will serve as validation for your idea. Not only will they enable you to attract employees and investors, but also board members and advisory board members. Everybody wants to be in front of the next good idea and by gathering letters of intent you will be proving (to some extent) that your idea is viable. Then, when you approach any of your potential constituents or customers, you can show them these letters of intent which should help them make a decision in your favor.

On the other hand, the LOI process might be a lifesaver. With your idea, if you begin to solicit LOI is and they are not forthcoming, there is a clear message there. If people who are close to you, our acquaintances, or potential business associates do not care to issue an LOI in your favor, the message might be that your idea is not that interesting. however painful it may be, it is better that you know your idea is mediocre before you launch your startup and invest your time, money, and emotions. Let alone, before you take money from others and bring people into your startup fold.

Strategy Three – Everyone Sells

Don’t launch a start up unless you are willing to sell. I hear it all the time… “but I don’t like to sell… or I’m not good at sales.” As the founder and possible CEO of your company, you have to be willing to tell people about your product or service and its benefits. If you’re not willing to lead the sales charge in the initial stages of your company, you will fail. Look at it this way, if you’re going to risk a great deal of your own resources on a startup, you deserve the rights to tell everyone you meet about your company and its products and services. You have to be fully committed to the cause so that whomever you speak with understands your enthusiasm for your company and its products and services. Many believe that sales is an extremely difficult thing to do since it involves rejection. However, as an entrepreneur and founder of startup, you needn’t worry about that. Your product will be for some and not for others but your goal is to tell all who could benefit from the value of your product and services about your company.

At the same time, every one you bring into your company needs to be a will to tell your story. What I mean by this is they must be able to talk about your products and services with some level of enthusiasm. It doesn’t mean that they all have to prospect for a living, or be significant lead generators, but they need to understand the products, services and brand of your company to the extent that if they get stopped on the street they understand your value. the most successful companies that I’ve seen deployed a strategy of making sure that all employees, partners, vendors, suppliers, and other interested parties know all about the companies products and services so that your message is consistent and is delivered far and wide. This all helps build the brand.

On the other hand, I’ve seen companies who don’t care to pass along some of the most important information about your products and services and subsequent benefits, to the extent that they miss out on significant selling opportunities. Everyone from your board down to line level staff need to understand the company mission, vision, values and products or services so that your brand continues to build in the marketplace.

Strategy Four – Hire a Good Sales Leader When You Can Afford It

It may take awhile before you can afford a VP of Sales or Chief Sales Officer. However, there will come a point in time where you can no longer handle all of the sales yourself and you need someone who can not only take over the duties but might add significant sales expertise. While sales is relatively simple, explaining the features and benefits of your product to as many potential customers as possible, you will still want a structured sales program to make sure that leads are flowing correctly and you understand the sales pipeline. But a true sales professional will be able to run the sales pipeline with your sales force to ensure that it is maximized.

Strategy Five – Be Sure to Measure Sales Each Week

The top sales organizations that I’ve seen have sales meetings each week where they cover the prospective pipeline and recent sales closures. during these meetings, it’s important to cover sales activity and sales process as well as the sales pipeline. If sales activity is high, and the right messages are delivered to the right prospects, the pipeline should work out just fine. There are a lot of reasons why sales may be low, but by meeting each week you will certainly keep on top of the situation. On the other hand, if he only meet and speak to your sales team once per month, it may be too late to save the month if there were some problems you didn’t know about.