What’s it take to sell? Is it mostly an art or a skill? As a small business owner, do you have the best perspective for selling your own product?
Most small companies eventually reach a plateau in their sales efforts – a critical point when the owner/entrepreneur must take an objective look at the company’s sales engine. Newtek recently interviewed CEO and Co-founder of ES Research Dave Stein, who has worked with more than 200 small businesses. During the conversation, Dave highlighted the three most common sales process setbacks that small businesses encounter (and shared some ideas about how to rectify them.) Here’s what he had to say:
1. Believing Anybody Can Sell. Most entrepreneurs and small business owners tend to think they “were blessed with the ability to sell,” said Stein. Then, when it comes to scaling the company, “they run out of steam in terms of their own ability to do the selling,” and start looking around for someone to do that job. They frequently choose the wrong person because they believe that sales requires very little skill. In actuality, said Stein, sales is “85 or 90 percent science and only 10 to 15 percent art, but … small business owners and entrepreneurs somehow think it’s reversed. They think it’s 85 to 90 percent art and just a little bit of science or skill.”
This happens because the owner or entrepreneur has made the important first sales—to get funding, to show there’s a market. But if they’re going to sell consistently, they need to develop a process that defines the customer’s buying preferences and tendencies. This is true, said Stein, “no matter what industry you are selling into … there has to be a real understanding of how the customer buys. Then the next task is to understand what is required to sell to them.”
Define the steps: “First you do this and the customer has to do that, then you do this and the customer does that and then you’ve made a sale.” He says that the tendency among business owners is to look at every sales opportunity as “something completely different.” They think they can go in and rely on gut feel to make the sale.
2. Pursuing Any Flicker of Interest. Optimism is a defining trait of entrepreneurs and of a large percentage of small business owners. Perhaps that’s from necessity. Trouble is, those rose-colored glasses can blur the view. “There’s a significant degree of objectivity that’s required for a small business owner to be successful,” said Stein, a small business owner himself. The owner’s passion for his company and product “often crosses the line into a too high degree of subjectivity.”
The overly subjective owner won’t ask qualifying questions—is there a need? is there a budget? is there a reasonable timeframe during which the customer will buy? am I talking to the right person in the organization, someone who has the authority to buy?
“Your instinct would tell you I should sell to anyone who’s interested in buying my product or service, but the real answer is counterintuitive,” said Stein. Don’t go sell to somebody who shows an interest just because they show an interest. Instead, figure out who your target market is, your “sweet spot customer.”
Companies just starting in business can start to define their target customer by asking: “what is the business need that I believe I can solve and what companies would be willing to invest in solving those problems and leveraging those opportunities?” said Stein.
They’ll refine that definition as they meet with customers. “Part of it is just understanding what it is you’re providing… Part is a bit of history.” Stein says he’s not talking about a massive study, just a few hours of “looking back and understanding what the appeal was when there was a compelling need felt by the buyer to continue talking to me.”
From this, you can figure out which industries, sizes of companies and which titles within the companies you should call on, and which messages you need to convey. Once you’ve got this target, he said, “Be very, very wary of … investing any money in pursuing anyone who is off the target… You want to make sure you are spending 80 to 90 percent of your time pursuing business that is in your sweet spot.”
3. ‘I Play Golf With Him’ as Step One to Sealing the Deal. Blind spot number three “is that investments are made in products and services not because they are cool or the company likes them or because there’s a nice relationship between the buying company and the seller,” said Stein. “These days more than ever before, companies are making investments because they have calculated what impact spending money will have on them achieving their overall business plan or a specific part of their financial plan.”
So, it’s all about your message: the value proposition. And it has nothing to do with whether you play golf with the guy.
Stein says that ES Research Group articulates its value proposition as: “85 percent of sales training that’s delivered in the U.S. results in no lasting impact after 90 days… We can significantly increase the likelihood that your number … will be down in the 10 to 15 percent range.” The value proposition doesn’t have to be an ironclad guarantee of financial success, it just has to be strong enough to persuade the well-qualified buyer to take a chance on something.
“Small business owners need to understand that they need to tie significant financial benefits to their product or service.… ‘If you invest $10 in my product today, you will get back $20 in profit improvement over the next X number of months in the following way.”
Learn more about ES Research Group and read Dave Stein’s blog by clicking here.