Founder Friday is a weekly guest post written by a founder who is based in or hails from the Silicon Prairie. Each month, a topic relevant to startups is presented and founders share lessons learned or best practices utilized on that topic. February’s topic is sales.
About the author: Mike Colwell is the co-founder of CaseSmpl, NotifyWorks and Plains Angels.
Selling to businesses (B2B) can be hard but I will argue it can be very rewarding. I gained my selling to business experiences in the 80s and early 90s with a company called Norand Data Systems out of Cedar Rapids Iowa. We were selling new technologies (mobile and wireless computing) to established and mostly lethargic large corporations around the world. Based on those experiences, here are six things I think are critical to successful selling to businesses.
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1. Sell on hard ROI. What is hard ROI? It is a return on investment that eliminates a budget item or expense. Alternatively it can also be a return that grows, measurably and with proof, the sales or gross margin line for a business. The key is measurability and proof. As part of your sales efforts you need to make sure the customer understands how they can measure this ROI. It is not enough for you to state it. You must have the customer internalize the savings as their own.
2. You must know all of the players in a business sale. Rarely is there just one person involved. In deals I worked on there were as many as 20 people who were key to making the decision. You need to identify all of these people and understand what their roll is in the process. Examples of roles include: financial analysts who will validate the economics, technical people who will validate and approve your product or service, purchasing agents who will turn the approval into purchase and payment, and management interests for the area affected by the sale. In this case, think VP of Manufacturing for a plant improvement or VP of Sales for a sales automation system. Once you have identified these roles you must understand their relationships to each other and who has the final decision making authority. Many deals are lost because the salesperson did not know who truly made the decision or held sway over the key decision-maker.
3. Many times you will be asked to complete an RFP (Request for Proposal). If you are just coming into the deal at the RFP submission point, you are most likely too late. You need to, if at all possible, influence the RFP process. In my old company we went so far as to create a “standard RFP” for the purchase of systems like ours. Many of our customers would take key elements of our RFP and include them in their own. Some actually used our RFP with only a change or two. This created many key advantages for our company and positioned us to have the best response to the RFP. Many of our customers saw it as a time-saving convenience.
4. Some sales people and some company management truly do not understand the sales role. In a business to business sale, the salesperson’s role is to advocate for the client. They are the client’s representative inside your company. Their credibility with the client is based on how well the salesperson performs this key role. In discussions around a deal, a business owner / manager needs the salesperson to take this role seriously to make sure the customer is well represented. Treat this salesperson like they are the customer.
5. In almost every B2B company, you will lose more deals then you win. This is just a fact of competition. One way to improve your win ratio is simply picking your battles carefully and only putting effort behind those deals you are well positioned to win. From there, you need to examine every loss. Have a honest discussion with the appropriate people as to why you lost and what you can do better. The leader (Owner, CEO etc.) needs to call the key decision maker after the loss and ask for their insight on why. Be clear you are not asking for the business or a reversal of the decision, only to learn for next time. This can be the beginning of a real relationship that will bring about a sale next time.
6. Selling in the B2B space is a process of many “dates.” You rarely have the ability to sell on one sales call, let alone one sales quarter! Consistent follow up and communications from the salespeople is critical. Make sure that those communications have real value to the potential client. For the salesperson, a good way to do this is by providing relevant information to the client. This allows you to be seen over time as an expert in the area.
Above all, keep learning and measuring what you do. Each deal, won or lost, is an opportunity to become better at what you do.
Credits: Mike Colwell photo courtesy of Colwell.
About the Author: Mike Colwell is the executive director of the Business Innovation Zone and Plains Angels, the author of “It’s Not a Plan Until the Numbers Add Up: StartupModels.com – A Guide to Building Financial Models For Business” and the co-founder of CaseSmpl and NotifyWorks. Colwell started writing code in 1984 for mobile computing company Norand Data Systems in Cedar Rapids. Acquired in 1997 by Intermec Technologies Inc, Colwell remained until 2006 leaving the position of VP of Marketing.
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Iowa Economic Development Authority (IEDA) is dedicated to supporting innovation by connecting entrepreneurs with resources and development opportunities in Iowa. It salutes the founders of today and tomorrow; encouraging ideas that will invigorate a new economy. Please visit iowaeconomicdevelopment.com for more information on how IEDA can help your business ideas come to life.
