Strategic Sales 101 for Tech Startups

I was asked yesterday to be a standby speaker to the replacement speaker for the Sales 101 speaker who couldn’t make it for the Technology Innovation Week conference. Now, sales isn’t a key skill so I jotted down a couple of thoughts about taking a strategic approach to sales for tech startups.

In the end, I wasn’t needed but the list seemed useful. Keep in mind that the points below are meant for a tech startup which has got seed funding (so there is an identified ‘customer pain point’ and viable product) but has not yet reached the scale-up point. Tech startups can vary greatly so the points below need to be tailored for specific circumstances.

1. Understand the primary role that sales plays

For most tech startups, especially those in the B2C area where ‘network’ effects are high, growing the number of users is a priority. Valuations and milestones tend to be highly dependent on fast growth over profitability. However, there are exceptions and it is critical to know if that is the case. For example, in some cases the revenue per customer (particularly in some B2B cases) or relationships with 1-2 key customers may be more important than the number of customers.

2. Look at what users are actually doing

There is, rightly, a lot of emphasis on being customer-centric and a focus on the market instead of the product. Talking to customers, especially hearing customer stories firsthand, is vital. One aspect sometimes overlooked is the need to look at hard data about what users actually do, as opposed to what they say they do. This is the era of big data, or at least rich operational data, and analysis of correlations, click paths, and hypothesis testing for new customer insights can give unexpected yet highly valuable insights.

3. Know when to press the sales accelerator

Again, there is quite rightly a focus on release early, release often. Beta releases and fast iterations to ‘get it out there’ and get user feedback is great. At this stage, however, the cost of customer acquisition tends to be high and customer provisioning as well as support costs are high. Going too early could put off early adopters and drive huge costs. Going too late could risk losing the window of opportunity to dominate the market segment. It’s more art than science but knowing when to press the sales accelerator hard is a big call.

4. Internal alignment and balancing

At this stage of the tech startup, the team has gone through some big ups and downs but there are still some rough edges. In particular, there is often a division between the tech founder and the business founder. This could lead to internal inconsistencies of the priorities, particularly where founder equity is evenly divided. Conscious efforts are required to achieve internal alignment so that sales are not pushed without technical foundations or sales are held back as the technical founder focuses on perfecting the product.

5. Idealism is a marketing strategy, not a sales strategy

This probably only applies to some tech startups, those that have a strong vision and strategic foundation. Often such startups are ideology driven which can be an excellent marketing strategy but a poor sales strategy. Idealism helps to build the story and attract attention, which is a good thing and can make a solid basis for the social media strategy. However, addressing customer pain points makes for a far better sales strategy than idealism.

While I intended to promise giving five insights, in the spirit of always giving users more than promised and delighting them, here’s an extra one.

6. Multiple sales channels

Be creative about looking for additional sales channels, especially indirect ones that can scale and have a low cost of customer acquisition. Always make your users your sales partners. For example, by incentivising them in some way or simply by amplifying their appreciation of your product. Try and develop or participate in an ecosystem or platform play. As a final example, look for complementary products and services so that you can develop partnerships to quickly yet economically build on others’ trusted relationships.

If you’ve got some insight to add, please put in a comment below. Thanks.

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