Two key tasks we help early stage teams with are preparing for and executing successful negotiations of complex long-term business relationships. These early sales efforts must foster value co-creation with customers because both parties understanding of requirements will continue to evolve as the product is deployed and gains wider use.
- Honor what is valuable about the past and what is working now.
- Assess the current situation and system.
- Ascertain who is trusted and who people turn to for advice, and weave them into your network.
- Guide the change. Consider where global principles apply, and what can evolve locally.
- Design experiments in collaboration with people who are involved in the change.
These same rules are essential to making a complex sale. What follows are my notes on her talk.
My interview with Gabriel Weinberg was originally published Sep-8-2010. He was doing research for what became his fantastic book Traction. We talked for the better part of an hour and a half and I can remember he kept returning in different ways to what was needed to close your first dozen enterprise customers.
I have known Jennifer Berkley Jackson of The Insight Advantage for the better part of a decade. I met her at a Breakfast for Management Consultants and have stayed in touch ever since. She wrote a great blog post last year on “Win/Loss Analysis, Your Secret Weapon for Success” and we recently sat down to discuss win loss interviews in more detail. What follows is an edited transcript of the conversation.
Q: My software consultancy has reached the point of needing to hire someone to help manage the sales pipeline. I’ve hired all kinds of technical related folks, but never for sales.
Trust is built over repeated interactions between people. If your business requires long term relationships then you have to make sure that investments in automation are not deployed in a way that undercut your ability to have real conversations. Unfortunately, some uses of email automation tools are pushing sales conversations into the “Uncanny Valley” because they strive to simulate–but miss–a genuine personalized touch.
Q: I work at a SaaS company in the services team, we often team often finds that customers mistakenly believe that:
- Certain features are included in the product package they bought.
- Certain services projects are included in the services package they bought.
What are some ways to prevent this from happening?
Managing sales people is straightforward: you get what you reward.
Q: I struggle with the value proposition for our product. Either I am too abstract “we offer a positive return on time invested” or too vague “help increase your ability to manage critical challenges.” Do you have any suggestions for how to frame or formulate a value proposition?
Here a few questions that a value proposition normally addresses
Q: In your blog post “Four Presentation Traps to Avoid” (which drew on Mike Monteiro’s “13 Ways Designers Screw Up a Client Presentation” which I found overall to be very valuable) you highlighted his item 4 “Not setting the stage properly” which ends with “Start the meeting by thanking them for their time.”
I feel this puts you below the prospect or customer as a supplicant. Your time is just as valuable. It’s a minor thing but I suggest “I’m glad we could all find the time to meet today.” or something that puts you at least level with who you are presenting to in terms of the value of your time.
I took part in a great roundtable conversation at tonight’s PATCA meeting on “Low Cost Marketing and Advertising for Consultants” Here were a couple of suggestions that I made in response to situations or challenges that other consultants put on the table.
I am a big fan of Jill Konrath and her Selling to Big Companies book. She has good advice on closing the sale: it’s up tot the customer. If you are selling a product that requires consideration or a complex evaluation by one or more employees of your prospect’s organization the following advice is particularly appropriate.
We Help You With Customer Discovery
Q: Why don’t you ever blog about User Experience Research (UX)?
The short answer is that we do customer discovery not user experience research.
Our Clients Want Leads and Deals
My clients come to me for help generating leads and closing deals, so that narrows my focus.
We don’t sell studies to larger firms that want a lot of fingerprints on the gun if things go wrong. If things go wrong for too long for my clients they are out of business. It tends to keep me–and them–focused very directly on revenue. We tend to focus much more on the “job to be done” by the product instead of constructing user personas.
Q: I have looked at your website and based on some of your blog posts you seem to provide a full range of tactical services–content, outbound messaging, SEO, videos, newsletters, demos, etc.. Why do you talk about “leads and deals” instead of focusing on the full range of services that you offer?
Founders Want Leads and Deals
We sell to founders and they pay for leads and deals.
Any tactics or strategies we propose we have to connect the dots explicitly to how this will generate new leads or help them create opportunities or close deals. There are many good marketing services firms who sell to the Director or VP of marketing. People in those roles tend to be measured on the number of “marketing qualified leads'” (MQL) that they generate and sometimes look to contract out tactical marketing services to specialty firms.
Map the customer buying process, needs, and situation before you invest time sending a detailed proposal. A quick request can mean you are column fodder.
Q: We are still trying to close our first paying customer. We have a website up and have talked to a number of people. More or less out of the blue we got a call from someone in a large firm who had looked at our website. They asked a few questions about our product and then said “Great! Send me a detailed proposal including pricing!”
At last a stranger recognizes the brilliance of your solution in just a few minutes of conversation! How often I tell myself that. How rarely it’s true, especially when you are just starting out with a new product or in a new market. You have to ask yourself:
- Do they really know enough about what we do to be able to start a purchase order?
- Do I know enough about their situation to be able to calculate our likely impact on their business and their return on investment?
- How can I justify the price to value in the proposal?
- Have I addressed the critical implementation and proliferation roadblocks we will face from pilot to production use?
You May Be Column Fodder
More often than not you are actually “column fodder” or a makeweight needed so that they can prove to their boss or the purchasing/finance team that they did a thorough job and solicited three bids. Especially if you don’t know much about their situation and they have not asked for a detailed demo you need to proceed a little more slowly.
Map The Customer Buying Process
Before you submit a proposal I would ask your contact these questions to get a better sense of the situation, in particular you need to learn as much as possible about who will make the decision and how they will make it (the customer buying process).
- Can you describe the process for making a decision after we submit this powerpoint proposal, who else is in involved, what questions are they likely to have?
- Who has to make the final decision to actually sign a contract?
- Can you provide an example of a standard contract so we can understand your typical deal structure and terms and conditions.
- Can you give some examples of other deals that your company has done in the last three years that might serve as a model for how our business relationship would work?
Understand Their Needs and Situation
You want to be easy to do business with but that requires that you have a thorough understanding of their needs. I would not send a powerpoint presentation, but ask for time to present it (if only via Webex/GoToMeeting) so that you can answer any questions that they have in the moment. I would also dry run this presentation with your contact if they are open to it. If they just default to “send me a detailed proposal” it’s probably not a real opportunity.
Q: I am currently working on a degree in Computer Science with a focus on Artificial Intelligence, in particular Machine Learning and Natural Language Processing. My goal is to do a startup after college but while I find the technology aspects straightforward, some aspects of business are challenging.
How do you form partnerships with other people and other companies? I studied game theory last year and it would seem from the Prisoners Dilemma that as long as you plan on never working with that person again it is in your best interest to screw them over. But if you plan on working with them for a long time then you should start by being good to them and then treat them as they treat you (“Tit for Tat“). How do you look at forming business partnerships?
In real life, as opposed to thought experiments like the Prisoners Dilemma, it’s hard to tell when, where, and in what circumstances you will meet someone again. I don’t think it’s ever in your best interest to screw anyone over.
We exist in a web of relationships with membership in overlapping but distinct communities. As entrepreneurs we can be seen as agents of chaos by the status quo but our aim is innovation that leaves society on balance better off.
Of course we have to make a profit for our businesses to continue, but there are other gains that come from entrepreneurship beyond the financial that lead us to invest in our employees education, to invest in our communities and to “leave a little money on the table” when dealing with partners and suppliers in the interest of good will and future relationships.
Business is situated in community and a social context: a good reputation as fair dealer committed to the values of the community, as evidenced by actual kindness and charity will create more value in the long run than treating every transaction as the last one you will ever do with the other party.
If you have demonstrated domain knowledge and expertise, a plan for having a significant impact on a customer problem, and are in the process of exploring the early market for your offering or trying to build on a handful of early customers, we can help find leads and close deals.
The majority of our clients are teams of two to five engineers or scientists who are bootstrapping, but we have also helped larger firms–even some in the Fortune 500 as well as large non-profits–where they wanted help exploring a new market.
We are very comfortable helping teams refine their product concept with discovery conversations, probes, and experiments. We help you make sense of the information you have, build models, and craft a plan of action for next steps. In particular we help you lead generation and negotiation to close of early reference accounts for new products. If your goal is to sell to businesses in a subscription or long term relationship model where the three year value of their new customer is at least $25K then you are a typical client–obviously your initial deal sizes may be less but your goal is still to provide enough value to justify that price point or higher.
Startup Stages Model
The model we follow is our “Startup Stages” which spans from the pre-incorporation idea stage to scaling. We have helped a number of teams come together and assisted them from idea stage to open for business stage to finding and focusing on a niche.
To get acquainted join us at a Bootstrappers Breakfast in Silicon Valley or sign up for Office Hours. We offer public and private workshops and Mastermind groups in addition to consulting support. If you are bootstrapping and can identify a monthly budget we can find a way to work with you.
If you want to be a succeed as a bootstrapper, start with what you’ve got: you have an insight into an opportunity, a marketing edge, a particular problem where you’re going to bring distinctive value.
A Bootstrapper Doesn’t Wait For Investor Approval
Don’t wait to get started until an investor tells you there is a market and they will invest. An investor cannot validate whether there’s a market or not. Worse, the process of seeking investment rarely teaches you more about customer needs.
The converse is even more important: don’t be dissuaded if an investor does not believe that there is a market.
Or Their Friends’ Approval
It’s OK to ask your friends if it’s a good idea. But sometimes they will tell you they like the idea just so that you will stop talking about it and get out of their living room or office.
And again, if they don’t think it’s a good idea you should weight their perspective by whether they are a prospect or not.
You Have To Start Selling
Which ultimately means that you have to build a minimum viable product and start selling.
When a prospect tells you that they have problem that you want to solve for them, that’s good. When they write a check or give you their credit card, that’s validation. Now you are a bootstrapper.
But just because they have quantified their love for your idea it doesn’t mean that you are done. You need to follow through and see that you delivered the benefits that you promised to them.
More bootstrappers go wrong by not conserving trust than not conserving cash. Cash is important, but if you don’t keep your promises you cannot bootstrap successfully.
It’s primarily about selling and customer satisfaction. There may be challenges in building the product or getting it to work reliably when it leaves your hands. But the primary challenge is building something that people will pay for and order again (or extend their subscription) because it delivered the value that you promised.
Many of the people who are attracted to startups are drawn to a technology or a craft or the idea of being their own boss. Those are great reasons to become a bootstrapper. But success requires developing an empathy and rapport for your customers and delivering value.
The key differentiators are your ability to sell and ensure customer satisfaction.
Related Blog Posts
Conor Neil has a great quote in “If You Can’t Explain what You do in a Paragraph, You’ve Got a Problem” (great title but he admits he cribbed it from Brad Feld)
“I believe the major risk of early stage startups is getting customers to buy, and showing that you can sell.”
When you are interviewing a prospect don’t ask your next question before you learn from the last answer. If they are not asking you questions it’s deteriorated into an interrogation.
“Don’t take business advice from people with bad personal lives.”
Frank Chimero “Some Lessons I Learned in 2013“
One of the hallmarks for success in a business-to-business market is the ability to form personal relationships as well as professional business relationships. Both require building trust. I am always dismayed when I read advice that advocates bait and switch or other forms of con games that erode trust and make it difficult for any startup to build relationships.
After every Great Demo! workshop we contact the attendees with a short E-Mail that reads in part:
I want to check-in to see how you have been doing using the ideas and skills we covered in our Great Demo! Workshop three months ago. Specifically, I’d like to hear:
- What have been the results so far?
- Do you have any success stories to report or share?
- Any questions or new situations you’d like to discuss?
What follows is a redacted e-mail from a real attendee at a recent Great Demo workshop. We have his permission to post it, but he asked that we remove identifying information because of his candor about his approach to demos before he came to the workshop.
I would like to tell you that your workshop has had a positive impact not only on my demos, but also on my customer meetings in general.
The key message I took away, “Do the last thing first,” has proven very effective at increasing customer engagement in our demos. Our product is a sophisticated one with a long history–what are prospects sometimes describe as “very complex” or “arcane” even “confusing.” We sometimes present modules that–in hindsight–were of no of interest to the customer. This can not only turn a demo into a waste of everyone’s time but also convert a hot prospect into a lukewarm one.
It’s seems obvious now, but getting right to the point and then working backwards based on the customer’s level of interest (“Peeling back the onion”) has triggered a lot more questions and demos that end in clearly defined next steps instead of “you’ve given us a lot to think about, please let us get back to you.”
The example that really punched me in the gut when I realized what I had been doing was your hyperkinetic impersonation of someone doing a demo of Microsoft Word. Your first answer to the question, “Can you print?” seemed reasonable: you opened the print dialog box and walked through all the print options in detail–portrait or landscape, single or double-sided printing; color or black and white, number of copies, print quality, etc…
But when you did the second take and said “Yes, would you like to see it?” and clicked the print icon I had this terrible sinking feeling.
“Holy Crap! My demos have too much detail,” I said to myself.
Change is hard, but the three of us who attended your class took the “Great Demo” approach back and have seen a difference in the number of demos that now lead to sales that are progressing.
You may be in the same predicament if your approach demos involves one or more of the following:
- You include a multi-slide corporate overview whether the prospect requests it or not.
- Demos are viewed as an opportunity to provide training on your product.
- It’s not uncommon for a demo to end with prospects sitting in stunned silence or murmuring, “let us think about this and get back to you” instead of asking questions.
We have two Great Demo! workshops on on the calendar for 2014 in San Jose
|May 21&22, 2014 “Great Demo!” San Jose, CA|
|October 15&16, 2014 “Great Demo!” San Jose, CA|