Sales

Hardcore Sales Prospecting

Had a mentoring discussion with some fellow mentors today and when asked how many sales calls a new startup selling into the enterprise should be making a day I suggested 20 minimum. 

The mentors all laughed at me, suggesting that this was way too high.

I was actually being conservative, I actually though it should be more like 40-50 but I know they definitely would have fallen over laughing.

I spent about 8 years in Corporate IT sales, 8 years cold calling for my own business and also when I took a sabbatical from tech I spent a few years selling ~$15 million of real estate (not actually a big deal in Sydney).

I am not the worlds best cold caller, I hate it, give me a warm lead any day however sometimes there is only one way to reach your prospects and that is by cold calling. 

This is especially the case if you want to secure meetings and try to win business this year, not next year (or never).

Other methods are too slow or can easily be ignored. Cold calling doesn’t scale but it can get you those first 10-20 customers that will keep you alive while you work out how to create a lead generation marketing system that will scale.

I know phone usage is reducing but its still a thing in corporate land and while it is, if you are in enterprise or business sales you should be calling a minimum of 20 prospects a day. It does actually work for consumer too but its painful.

Don’t over think it, write down a script 2-3 paragraphs and pick 20 prospect names and start calling.

Linkedin is fertile ground for finding names and titles of people and often even their mobile number.

Do a search with the key attributes you need, i.e. title, city, skills et

Cut and paste 50 names into a spreadsheet,

Start calling, rinse and repeat.

You might laugh but 20 calls before 10.00 puts you in fantastic shape for the day and makes you the top 5% of sales reps for prospecting (most don’t).

If you were wondering my best ever call record for a day was 160 calls.

Thats what you call hardcore.

Image Credit https://en.wikipedia.org/wiki/McDonnell_Douglas_F-15_Eagle

10 Ways to Kickstart your Startup – Part 4 – Bootstrapping – Convince your first customers to finance your startup

Startup financing cycle

Startup financing cycle (Photo credit: Wikipedia)

Many people don’t think its possible to get a customer to fund your business, but it really is, especially where you have a product or service that is not a commodity.

Recently when mentoring a startup I suggested this and they were shocked, they didn’t believe it was possible, however some months later they had managed to get one of their new business customer to accept the idea of paying upfront for the still to be completed product (and the revenue arrived before the fundraising they were holding out for).

Many entrepreneurs are stuck hoping and wishing they can raise capital, truth of the matter is it can take 3-12 months to raise your first round (or never), customer revenue on the other hand could only be a few weeks away.

 

If you are solving a difficult problem and you can convince a few customers you have a compelling new solution (albeit with some rough edges) there is every likelihood that you can convince them to pay up front or pay to develop additional features that meet their needs (which hopefully just happen to be in your roadmap).

This concept is missing from the Startup Financing Cycle graph above and there is every chance that tapping your customers for finance will get you through the Valley of Death or at the very least reduce the amount of capital you need to raise and allow you to retain more equity.

 

Given you can only grow a business as quickly as you can turn cash (I will go into more depth on how to accelerate your funding later in the 10 Ways to Kickstart your Startup series) bringing revenue forward by getting customers to pay upfront is much more common than you might believe.

 

Kickstarter is the modern consumer incarnation of this method but it has happened for as long as companies have existed, Kickstarter has just found a mostly frictionless method to facilitate this on a global scale and connect non businesses or would be startups and consumers.

Kickstarter

Kickstarter

When I started my first business I would insist on payment in advance, we turned over $4m in our first full financial year so I simply didn’t have the cash to fund this and there was no other way for me to do business.

 

Surprisingly very few people actually rejected this, especially when you explained to them that you were growing so quickly this is the only way you could fund the growth. You have to be ready to be a bit embarrassed about this, but you have to suck it up as it may be the only way for you to succeed.

I am not anti Venture Capital, quite the opposite, however I tell most Startups I meet that their ability to retain their equity is a function of how much pain they are willing to put up with and they are better off turning to VC when they are growing so quickly they can’t fund the working capital required to support the growth, which is a fantastic position to be in.

So a few suggestions on how to do this (primarily for the business market)

  • If you are selling a new technology or type of product, explain to the customer exactly what stage you are at, show them the product, tell them what the risks are and what your plan is, assuming you meet their previously unmet needs and they trust you and they can see the product is going to work for them, ask them for a deposit or get them to place and pay for an order. If the tech guy tells the purchasing and finance guy this is the only way to get the problem solved then often they will simply pay you, it’s amazing to see this turn up in your bank account.
  • If you are selling an existing product and its a large order (above your financing capacity) ask the customer what you can do to make the deal more attractive, for example is there an extra service you could throw in if he can pay upfront, something that might save their team a lot of time but might not take your team much time, or can you coordinate a late night or weekend install/upgrade?
  • If you are selling a service ask for a commencement fee.
  • If a customer has a particular need, tell them you are happy to build it to their requirements if they can fund NRE (Non Recurring Engineering) costs. Ideally the feature you develop will be part of your roadmap and you have managed to get the customer to help fund your development costs.
  • In large roll-outs, get customers to pre-purchase and pay for large orders and release it from your stock as they need it. It’s pretty easy to convince them you will keep it ready for them and they don’t have to worry about delays, you get paid both for the cost of the product and your profit (if you are working with a distributor, place an order on the stock and get it secured but ask them to only part ship for you, that way you only pay as you use it, but you have the customers cash, I will give an example of a sophisticated version of this below with Dells supply chain)

Dell

English: Dell Logo

English: Dell Logo (Photo credit: Wikipedia)

One of the best corporate examples of this is Dell. Dell gets paid in advance for the majority of their orders.

When you place an order you pay upfront via the Website (which everyone thinks is normal) but they don’t supply the product for another 7-21 days.

When you place your order they usually don’t even own the parts that they will use to build your product yet.

Here is how it works

  • You place your order
  • You pay upfront
  • The order is sent to the factory
  • The suppliers are required to be within 50km of Dells assembly plants and have their parts and trucks ready to go.
  • Dell orders the parts to make the batch of product they are scheduling that day
  • The supplier trucks are all lined up on one side or outside the plant.
  • When the truck rolls across the plants threshold, Dell now owns the product (note, most companies are invoiced when a shipment leaves the supplier warehouse, not Dell, suppliers don’t get to invoice until it hits their assembly line).
  • They assemble the PC and ship it to you
  • They pay their suppliers in normal commercial terms of >60 days (according to an analysis of their accounts their average debtor days could be as much as 80 days http://www.mysmp.com/fundamental-analysis/days-payable-outstanding.html)

So if you can convince your customers to follow some or all off the above methods there is every chance you can get your startup off the ground and be doing business without seeking external funding. Good luck

As always I welcome questions and comments, leave a message below and I will respond

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10 Ways to kickstart your Start-up – Lead Capture – CRM and Regular Communication

Salesforce

Salesforce

Capture every contact and keep communicating with them regularly

Many new business owners are looking for customers to serve right here right now and if the prospect is not ready today the owner keeps moving and forgets about them. Later when they see the customer, they are often disappointed to find out that the customer did business with someone else. When they asked why often the response is that another business called or sent an interesting email or had a special offer. Very few people are

When I sold my business I had over 5000 business and IT contacts in the database, which had been through a series of CRM package upgrades as we grew from ACT, to Goldmine to SugarCRM to a custom version.

My regret was I didn’t start doing this consistently until many years after I had launched the company.

I tell all new startup entrepreneurs, keep a database or CRM from day one. Religiously drive your team to use it, create processes to ensure that all web leads, call-ins and emails as well as the source of the new lead are entered into the CRM for every new contact.

Often customers want to buy but they are just not ready yet, it’s not no, just not today. Depending on your industry and the customers stage in the purchasing process it could be days, weeks or even years before they are ready to buy.

The entrepreneur needs to build a process that encourages the prospect to give you permission to continue to keep in contact with them on a regular basis, telling them about new work or happy customers, developments in their industry, new products or services you offer or better ways for them to do business.

There are stacks of different ideas you can use to write a newsletter or depending on your volume of blog posts you could setup a system to email your prospects and customers when you update your Blog. If you religiously do this every month you will pick up the opportunity to quote to the dormant prospect or the existing customer who forgot about you (it happen’s).

To make this work you need a few components.

Customer Relationship Management System (CRM)

Good CRMs I have used over the years include

Salesforce.com – Very enterprise and customisable, not for the faint hearted, expensive in my opinion.

Highrisehq.com – From the guys at 37 Signals, one of the nicest Web apps I have ever used, good for small to medium businesses

Highrise

Highrise

SugarCRM.com – This has been around for many years, it’s key advantage was it was open source, 10 years ago when I first implemented it, that allowed us to write modifications to it to intergrate our billing and support processes. Now it has gone all corporate and wants to charge between $35-100 per user per month however there is still a basic community version.

SugarCRM

SugarCRM

Insightly.com/ New entrant looks great works with Google Apps

InsightlyCRM

InsightlyCRM

Getbase.com New mobile oriented CRM

BaseCRM

BaseCRM

Whatever CRM you decide to use you need to check the following

  • All your web leads, emails from websites, support emails need to be captured automatically into the system. Most CRM have web forms you can use for this, failing that you can use Wufoo.com to capture the lead and then sync it with your CRM, most of them have an API to allow 3rd party apps to write to them for this very reason.
  • Mobile ready with iPhone and android Apps available
  • Try to get Social Media integration so that you can track past and future social media conversations
  • Every team member religiously enters every new contact and updates past contacts activities and changes.
  • The CRM is set up to sync with a email newsletter system, good tools to do this include wufoo.com which offers a Form that syncs to both your newsletter system (such as Mailchimp.com) and your CRM.

Once you have a system to capture leads you need something to generate a message when you want to communicate.

Social media takes care of some of this, however the data shows that people share a higher % of interesting articles they receive via email with their friends than they share via social media.

Regular Communications

If something changes in your industry you need to be the one that tells your clients and prospects. To do this you need an easy to use system that can send updates to your clients. They might be in the form of a formatted newsletter or could be in the form of a blog post update that gets emailed to people on your list.

A few options.

Mailchimp.com handles all the un-subscribe, bounce management and spam requirements and allows you to create beautiful templates to insert your content. Only problem is it takes a lot of time every month to create a good newsletter.

Mailchimp

Mailchimp

If you are running WordPress you should check out a plugin called Wysija.com. This will send out regular emails either as a daily, weekly or monthly collection of all of your blog posts or as each blog post is generated. You can set it up to be automated so that it captures every story in the last time period (day, week, month) and then lays them out on a nice newsletter format (with many preformed templates).

It takes a bit to get it setup correctly but once its done it will send out a formatted email like clockwork. It is worth setting up a test version to send to yourself 6-12 hours before the main email goes out so that you can pick up any problems as given the automated nature of this system its easy to send out an email with problems unless you have some means of vetting what it will look like.

Wysija

Wysija

 

If you are running WordPress on your own site and looking for a simple option load up the Jetpack plugin from WordPress. This will allow you to email subscribers each time there is a new post and it will manage all the un-subscribes and bounces and gives a nice readable format to each email. There is also an option to allow readers to comment by replying to the email which is very cool.

For most people the Jetpack plugin provides 90% of what you need to run a business website.

http://jetpack.me/

Jetpack

Jetpack

 

Using APIs to connect your web, CRM and Newsletter

If you are running another type of website management system (other than WordPress) there are a number of APIs (Application Programming Interfaces) which allow you to connect one system to another and transfer or synchronize transactions across all the systems.

The key ones that seem to be getting the most traction are

Wufoo.com which provides a multitude of forms that can be configured to manage just about any conceivable requirement. You create a form and then embed the code onto your website or Facebook page which creates a form on the site and when a user submits one of the forms the data is stored at Wufoo but can also be configured to synchronise to other platforms such as your CRM, Newsletter and other systems or email or SMS you the form details. 3 Forms for free then a small monthly fee.

Wufoo

Wufoo

 

Zapier.com is a web services or API gateway to allow you to synchronise transactions between 150+ different web services. For example you could receive a new lead in your webpage via a Wufoo form and have Zapier synchronise all the details to both your Mailchimp account for your newsletter and your Basecamp account for your CRM that way you never lose data or have data stranded in “islands” where the data is maintained separately (or most of often, not maintained) and contacts end up having multiple versions of the same contact and business information across the various services you use.

ZapierZapier-Action

 

Do it now

So in summary, if you haven’t implemented a CRM do it today, start with a Wufoo form and send it to a Highrise or Salesforce CRM, start collecting every piece of data and try to only keep one master database rather than create data islands, it’s probably best that your CRM keeps the master records and you use Zapier or similar to feed data from your website and other systems to the CRM thereby maintaining consistency and integrity of your data.

As always if you have any ideas or tips for other startups, please put your tip in the comments and I will add it to the post (and of course give you credit)

 

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