Sales is an important ingredient for any company’s success and it becomes more critical when it comes to start-up. Closing your first sales is an important part of your sales strategy and many of the start-up companies die even before they close a deal. And if you are not entering a well established industry than your efforts to sell your product/service increases by three folds no matter how exciting your product/service is. In that case you don’t only have to sell your product but you also have to educate your customer about your product/service as how can they be benefited from it and trust me convening for a product which is new in the market is not a cake walk.
Most common sales mistakes committed by start-ups:
1) Not knowing their target segment.
2) Overselling their product/service
3) No sales strategy
4) Not the right price
5) Not able to understand customer
6) Not following up
7) Lack of market knowledge due to inadequate market research
8) Underestimating the competitors just because you think your product is superior
It is very much advised for the start-ups to formulate their sales strategy and have a clear understanding of the segment they want to target and don’t live in the illusion that just because you think you have wonderful product/service, it will sell like hot cakes in the market. You will just not have competition from other start-ups but also from the well established players who entered the same industry even before you were not aware of that industry and they would have gained a lot of market intelligence by now may be not the market share as the industry is still to mature.
Tactics for start-up sales:
1) Market Research & Competitive Analysis: Spend time in understanding your industry and market you are targeting. This will help you know the trends in the market and position your product/service accordingly. Research aggressively about your competitors, know their product thoroughly, as their strength and weakness will help you position your product in a competitive situation. It will also help you boost your confidence as you are more prepared and you will able to handle objections more comfortably.
2) Hire Right Sales People: It is very important to hire right sales people because they will be the one who will be driving your revenues. That means if you are a technology company you should hire sales person with technical skills, that does not mean he should be able to code but should be able to understand customer requirement and communicate same thing effectively to the technology team.He/she should be able to understand what clients are asking for in your product and can effectively work with your product and engineering teams to improve the product based on that feedback.
3) Cold Calling: Cold calling, cold calling and cold calling. Do not get discouraged when you hear no. Cold calling is important as it help you prepare your pipeline and you know which are the customers who needs immediate attention and which are the customers who can be attended at the later stage. To read more about cold calling read (http://bit.ly/ZKzRFS).
4) Pricing: Do not price your product/service without market research as this could have a negative impact on your sales strategy. Your price should be competitive with your competitors as demanding more just because you think you have an exciting product may lead to loss in sale. Pricing plays an important role in your sales cycle.
5) Use your networks: It is always advisable for start-up’s to use your networks to win initial sales, as this would help you enter market and when you go for new prospects, you have references to quote.
6) Focus on every customer: Just because you thing particular customer will give you more revenue you should not leave your less revenue generating customers. As a policy you should treat both customers equally and work towards satisfaction of both. In start up each deal and each customer matters as it help u gain that customer base.
“What do you need to start a business? Three simple things: know your product better than anyone. Know your customer, and have a burning desire to succeed.”
– Dave Thomas, Founder, Wendy’s