Category Archives: Sales

Hiring your first sales rep: 10 tips and common mistakes

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How many times have you been at an event and met someone who gave you the pitch “I have this great idea, I just need someone to build it for me” or some variation of that?

This has become such a cliche in startup circles that it’s almost cringe-worthy. If all someone has is an idea then they’ve basically got nothing. As the old Edison quote goes “genius is one percent inspiration and ninety-nine percent perspiration.”

That being said, the other side of this pitch doesn’t get a ton of attention even though the problem is just as common.

There are lots of startups that build pretty solid products but never end up getting traction because they don’t figure out the sales and marketing side of things.

You don’t see a lot of technical founders searching for business development help, mostly because many engineers don’t even know they have a problem. They spend a year in their basement building the most amazing solution to a problem nobody has. When they do finally surface they discover that 6 of the 10 assumptions they made were wrong, and usually give up soon thereafter.

I’m an engineer, and I’ve seen this problem come up first hand. One of the most basic ways to avoid it is to start focusing early on customer validation. What that means in the most basic terms is to not write a single line of code before you talk to a few dozen customers who tell you unequivocally that they will buy the thing you’re thinking of building.

As you talk to customers tweak the pitch until you have 9 out of 10 potential customers telling you that they will pay money for what you’re planning to build (hint: 8 of them are lying.) This is your first step towards developing a sales process.

You (or your co-founder) need to learn to sell. Frankly, it’s not that hard and it’s mostly about persistence when it comes to getting a few pilot customers – they’re going to be early adopters, they won’t expect a polished sales pitch. It’s essential that this basic sales and marketing expertise lie within the core team. Which brings me to the first tip about hiring your first sales reps:

1. Learn how to sell and develop a basic process.

The most common mistake technical startup founders seem to make is to try and cop out on the sales part of the business. They feel they don’t know how to sell and are worried that people won’t take them seriously because they don’t have grey hair. So they hire an experienced sales guy (a friend of a friend,) give him ownership of all sales and just sit back and wait for the deals to flow in. It seems like such a plausible idea (it’s exactly what I did with Top Hat Monocle) and yet I’ve never once seen it work out. You need to learn to sell. It’s actually a skill very similar to raising money, so it’s something you’ll need to do anyway. Learn to sell just well enough to close the first few customers and develop a basic process that you can plug someone into.

2. Find reps who have experience with the same deal size and sales cycle as your product.

If your product costs $200 per month and has a 1-2 week sales cycle, don’t hire some with enterprise experience who’s used to closing three $500k deals a year, it won’t work out. A match on deal size and sales cycle is probably the best predictor of whether the rep will be a good fit.

3. Experience within your industry is useful but not essential if your product isn’t too complex.

Focus on item 2 above. Unless you’re selling a very complex product with a long (6 month+) sales cycle, don’t worry about industry experience.

4. If it’s a technical sale, tech savvy matters.

Don’t hire someone who barely knows how to use a computer to sell a software product. Frankly in general you should only hire people with basic technical literacy because otherwise you will be explaining to them how to use the CRM and your webinar software 5 times a day.

5. Sales reps are great bullshitters – ignore their words.

Only look at verifiable track record to assess the rep. This means getting a printed record of their quota attainment at every sales job they’ve had, then verifying that record with their supervisor. Anyone who hasn’t consistently blown away their quota at every job is a risk.

6. Place minimal value on prior contacts and rolodex.

The rolodex runs out after about two weeks. After that it’s all about prospecting and hard work. Don’t ever overlook a lack of experience or cultural fit because you feel the rep has a rolodex of clients they claim they’ll bring with them (they’re probably exaggerating anyway, see #5 above.)

7. With personality, focus on work ethic and motivation.

Sales is repetitive hard work. When hiring reps look for work ethic and drive. Look for people who need to earn a certain amount of money to maintain their lifestyle due to financial obligations – a big mortgage is the best motivator to hit quota.

8. Over time start to specialize your sales team.

Lead generation and research. Appointment setting. Follow ups and closing. Each is a separate role. You should segment by task and eventually by customer size or market. It may not even take that long for it to make sense to do this – we started specializing at Top Hat Monocle when we had just 3 reps.

9. Sales reps will maximize their paycheque above all else.

At least the good ones will. You need to ensure your compensation plan incentivizes sales and has relatively short term rewards. This typically means at least 50% of overall earnings should be from commission and there should be a monthly performance based commission payout. Don’t try to hire people on 100% commission, because you will likely only attract flakes who waste your time and never deliver.

10. Metric everything. Obsessively.

How many calls per day does each rep make. How many emails. What is the conversion rate on email responses. How many meetings does each rep go on per day. How many inbound leads are being generated. What is the time from inbound lead to follow-up. How many foliow-ups does each rep do per day. What is the mean time between follow ups. Everything. Metric everything.

6 Tips for Selling to Big Business

Editor’s note: This is a guest post by entrepreneur Aydin Mirzaee (LinkedIn, ), who is a cofounder and the Co-CEO of Chide.it creators of  FluidSurveys.com and ReviewRoom

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When founding a startup, everyone involved gets used to being told “no”. They are told no for their ideas, no for funding and no for sales. There are two ways to react to no, either get discouraged and give up, or realize that eventually there will be a “yes” and continue working towards that end goal.

The successful startups are those that both persevere through discouragement and try something different

“You don’t learn to walk by following rules. You learn by doing, and by falling over.” – Richard Branson

Stepping out of a comfort zone and doing things that others might not, is the thing that can lead to success.

This was the case when I founded FluidSurveys.com. FluidSurveys.com is an online survey and form building tool. Back in 2008 when we launched, there were already thousands of survey tools available on the market, including a well-known and well financed market leader, SurveyMonkey. It was the focus on selling to large organizations in the early days that has led to FluidSurveys.com becoming one of the top survey providers in Canada and it’s adoption by customers in large organization in over 50 countries including governments, educational institutions and Fortune 500 companies. These are my six tips on selling to large organizations.

1. Get Customer Testimonials Early On

Most of the time, large organizations are skeptical about buying from a startup for a number of reasons. Validation is the best way to get around this issue. Getting positive testimonials from beta customers who were involved in the product development phase and presenting it to large potential clients is an excellent way to validate the product and the company.

2. Try a Pilot Project

Pilot projects are popular with large organizations. FluidSurveys regularly performs pilot projects with large organization and has had successful sales as a result. “Get the targeted organization on a reduced rate pilot project and have them use your product for 6 months to a year. After that, why wouldn’t they buy from us instead of the competition? They are already familiar with us and our work at that point.”

Essentially you want to have the company use you on a smaller scale first, which is a small step towards the goal of establishing a strong relationship. From there, they are comfortable with the product and they will be able to move to using the product on a large scale, and the big steps will be much easier.

3. Understand the Buying Process

With large organizations, the product user will not necessarily be the purchaser. In Business-to-Business sales especially, there are almost always several people to consider in the buying process:  initiators, users, influencers, gatekeepers, and deciders.

When contacting a company, try to understand who your main contact is. While they may not be the decision maker, they could play an incredibly important role in whether or not your product is purchased.

Another important point to consider is the buying timeline your customer may be on. Consider if they will be more likely to purchase at a particular time of year and how long the process may take.

4. Pitch to as Many People as You Can

As a general rule, the product should not be pitched to just one person. Because there are a number of people involved in making decisions, if they can hear the pitch from you, you can be confident they received the right information

Tip: Avoid talking about price until the key purchasers are present. Rough numbers are fine but the final quote should be given after the full presentation.

I would often have to speak to not only the people within the company that make the buying decisions, but also the managers of the IT department. The reason for this is because large organizations are interested in central management: the ability to control the product themselves instead of having you come into the company. The IT department was an influencer in the buying decision since they had expertise with software products.

5. Consider Tiered Pricing

The way that the product is priced is another key component in landing sales with large organizations. The concern is always pricing too high vs. too low. If you’re priced too high, you might lose a bid to the competition. If you’re priced too low, prospects may not value the product. So what do you do?

Here the advice is to implement tiered pricing. Tiered pricing tends to work best for large organizations because their requirements may vary. For example, access for the first 100 users may cost $200/year and the next 100 users may cost $150/year. This is applicable to all sorts of products, not only software. You have to give the impression that you are not coming up with pricing on the spot and keep in mind that large organizations need all the numbers to plan for budgetary concerns. Prepare this information before you initiate a conversation with a potential client.

6. Address the Bankruptcy Concern

One last hurdle for startups to jump is the bankruptcy concern. Large organizations tend to worry about what would happen to their data in the event that the startup should go bankrupt, or has other financial issues. The best way to reassure these enterprises is to have good measures in place in the event that bankruptcy does happen, and be able to easily explain them to large organizations.

The most favorable way to alleviate these concerns from organizations is to give them the ability to download all of their data at any time or keep all of the data (and possibly the software itself) with a 3rd party (this is called escrow). The agreement and the conditions for the release of that data would then depend on the end situation.

In the end

The key is to be able to answer every question that big customers have. Better yet, covering their concerns before they even ask is a sales tactic that demonstrates your previous experience in working with other large organizations.

These sales tips for selling to large organizations have helped FluidSurveys.com more than double in staff, users and revenue in the past 6 months. Selling to large organizations is the key factor that I attribute to our current product and corporate success.