Sean Sheppard is one of the founders of Growth X, is a venture capital fund that helps companies optimize for personalization, not automation. As a serial entrepreneur with over 25 years of experience, he’s seen a thing of two that can help your business make more sales when launching a new product as a startup.
Our conversation with Sean will be focusing on the strategy around selling a new product and will help answer questions like:
- What is the role of sales when bringing a new product to market?
- What startups need to think about when setting up a new sales distribution channel?
- What are the SPIN and BANT methods?
What do early stage teams need to think about when setting up a sales force?
Its important to keep your sales force lean, with no more than 1-2 people. You can’t expect to throw a bunch of resources at something and assume it will generate sales and move the needle. The 1-2 hand selected people, who Sean also refer to as “cheif learning officers,” need to be responsible for figuring out where their product fits in the market, what channel it is sold through and what the messaging is. This also includes deciding what data should be collected to build use cases for specific markets.
Because the early sales roles require a specific strategy and specific experience, the first mistake you should avoid is giving an existing sales force a new product that they don’t have background of selling. While it may seem appealing at the moment, it will have a double negative effect on sales: It sets up the new product up for failure since it doesn’t have the right salespeople, and it will hurt the existing sales of other products since you are taking resources away from them. Sean recommends finding someone who has experience in the particular vertical who can hit the ground running and hinder the sales of other products or services.
Early stage DNA
Your startup sales team should possess what Sean describes as the “Early Stage DNA,” meaning by nature certain types of people are more suited for the startup environment and structure.
One attribute ideal startup salespeople have is that they’re able to embrace ambiguity. they can take nothing and turn it into something. Often times this takes someone who is in it for more than just comission, but instead the “mission” of the company. They see the long term sales potential and will identify new channels and methods without much direction.
The right salesperson should also be able to communicate well across functions (product, marketing, supply, operations, etc.). They are able to identify and build the right internal relationships, and ultimatley bring all of those people together.
“Closing is not a skill, its a byproduct of being fully emerged in trying to find the fit in trying to give someone they want and demonstrating value around the way. its not a tactic or a trick or manipulation.”
Customers don’t have “objections.” They have concerns. And it’s the job of the salesperson to identify and resolve any and all concerns as soon as possible. You don’t want to waste everyone’s time by going through this process just to have one issue derail the deal when it could have been addressed earlier on.
Typically the more expensive a product is the more people will be involved in the decision making process, and Sean goes on to share his breakdown of the different types of decision makers and stakeholders you will meet.
As your new salesperson enters the market with your product, they are going to encounter a combination of four buyer types. Being able to identify which “type” someone is will shape the way they navigate the interaction.
1. Economic buyers
Look at things from a numbers perspective with dollars and cents. they live in spreadsheets, etc. they own the budget and justify the allocation of the budget
2. User buyers
The ones who use the product or manager the process your solving. they feel the pain points and understand the benefits of your product
3. Technical buyers
They don’t have the power to say yes but they have the power to say no if they have technical objections to your product. these people usually are the ones who need things like case studies or testimonials. they need to be identified early on to get past any hurdles that may come up later on.
4. The Champion or Coach
Someone who has already used the product and understand its benefits. You want to turn the technical buyer into the champion.
On average you will speak with 7 stakeholders throughout the sales process, and if you aren’t familiar with the SPIN framework or the BANT process, it’s something you and your team should practice:
The SPIN framework
Focus on the beginning of the sale, not the end.
We use the SPIN framework to identify what the problem is and how it can be solved. The steps are:
Situation – Identify the job, the scenario, the background.
Problem – Find out what problems are associated with the job and how can your business can solve them
Implication – Ask what the implication of the problem is. How big of a deal is it, and how do you quantify it?
Need – How would your role be different in a measurable way if you made a change and is the need to make that change great enough for you to do something about it now.
These questions need to be answered throughout your conversations with the prospect customer overtime. A mistake many people make is they assume a prospect has a certain probelm when they don’t. Their problems aren’t real unless they actually say it in their conversations with you.
The BANT method
The BANT method is used to detmine if someone has the ability to do business with you, and follows the below guideline:
Budget – Can they pay for it?
Authority – Do they have the authority to do something with you and make a decision?
Need – Is there a need? This is the most important aspect. If there isn’t a need, nothing else matters.
Timing – Does the timing line up with your initial market milestone? Over a period of time you need to be able to get x amount of money back. If the customer doesn’t have the time to meet your initial market milestone, don’t force the sale and wait until the time is right and accept that they are not a fit at the moment but keep the door open for them to be a fit in the future.
Finally, the last thing you do is demo your product or service, not the first thing. Sean explains that while providing a demo might seem attention grabbing and flashy up front, it’s more efficient to determine need, key concerns, and the overall fit before going into details like a demo.
For more information on Rainmakers, visit rainmakers.co