We were pleased to be invited by Andrea Pacini, UK Presentation Director at Ideas On Stage, to share some of our insights on their YouTube channel. James Ker-Reid shared his approach on how Founders who lack B2B sales experience can drive sales at their startups.
(If you’d rather watch the full session, click here to view the recording via our YouTube channel.)
This is for Founders, business owners and senior leaders who don’t have in-depth sales and business development experience.
Our mission is to reduce the failure rate of tech startups. Over 90% of tech startups fail in the first 5 years, and we know that a lot of that lack of success is down to their commercial acumen – i.e. the skills, tools and knowledge to scale a tech company.
We’re going to clear up some of the confusion around how to build a successful sales operation with the Three P framework.
Before we do that though, it’s worth clarifying what the difference is between Sales and Marketing.
Marketing is the process in which you get the party interested in your product or service.
Sales is the process in which you take that interested party and turn them into a customer (or an order).
To put it more simply, Sales is a conversion activity – one between an inquiry and a customer. And that is what we’re going to be discussing below.
The Three Ps
So we talk about the Three P framework, but what is this?
These things must go in order to enable you to increase sales as a Founder.
You need to create a clear success and value proposition. When I first started in Sales, I didn’t quite understand why my team and even myself struggled with created predictable revenue. It would be up and down, or feast and famine as it’s sometimes known in the startup community.
Then I asked myself a key question – ‘how can I increase the certainty of success of both my customers and prospects when using our product or service?’. That then opened out a whole plethora of possibilities for me. We really understood who our customers, why we different from our competition, when they would receive value – we really went deep into the success proposition for that company.
It narrowed down a lot of time and we were able to predictably scale that company to an exit. Clarifying your own message will save you time, money and people. Success companies are built on stone, not sand.
You can imagine that your company is shaped like a pyramid. Successful companies start with a base that is made up of the Proposition. It is where all value is derived from. It gives clarity to the team and to the market as to what you stand for. So just ask yourself that question again: ‘Where can I give our customers and prospects more certainty of success with our product or service?’.
The second thing that we need to focus on is selecting the best people. I spoke to the Founder of a cybersecurity company recently and he told me his journey of hiring two Sales Directors in the last 12 months (and firing them), as well as hiring three Business Development Managers (who also left the company within 12 months).
It’s a common problem. If we take the UK alone, there are approximately 5.7 million SMEs. According to C&IT, £125,000 is spent every year by Founders on failed hires. How do you avoid that? We’re going to share 3 ways to select those A-Team players.
- Shortlist the outcomes. You need to create a scorecard that outlines what are the outcomes, abilities and skills that you’re looking to hire. You’ve got to understand the purpose of these hires to do that.
- Document your selection framework. You need to give consistency to yourself, your team and the candidates you’re interviewing in terms of what’s about to happen. That sense of certainty makes people feel at home, internally and externally.
- Onboard like your life depends on it! Google, Apple, Facebook – the unicorns of the tech industries are often known for their effort, time and money that is spent on selecting, hiring and onboarding the very best people. As Founders of SMEs, we should be doing the same.
When people think of Sales, they often think of it as a numbers game. You just plug in a number at the top and a number comes out of the bottom. It’s an automatic machine that is enabled, and all you have to do is switch it on.
I would encourage you all not to adopt a process-first approach. It’s a sure way to fail. I often cite the example of McDonald’s when people think about operations and processes. McDonald’s is clearly a very sophisticated and successful business, probably one of the most successful in the world. But it’s not necessarily a recipe for success for most of us in terms of our owns businesses. The reason why is twofold.
First, McDonald’s main premise of its proposition is around operational efficiency at a low cost (and therefore creating a good margin).
The second is that, because of that focus and pricing, there’s very little room for human interaction. The element of the unknown is something that they defend against. Someone in the kitchen can come and go, instantly replaceable.
Now for most businesses, that’s not necessarily a recipe for success. I’d encourage you guys to be a bit more strategic as to how you use processes. There are three ways in which you create the right processes to scale your company.
- Don’t create: Often I see Founders and CEOs on a whiteboard creating a very elaborate Sales process that’s created in a vacuum. That is a definite way to fail.
- Capture: You need to capture those systems, capture the process while doing it. It is an iterative process that you’re constantly improving.
- Delegate: You need to record that process and be able to pass it on to someone else who can run the same process – and hopefully improve it too.
People are amplified by processes. If you haven’t got A-Team players, there’s not too much point amplifying them.
We’ve covered the Three Ps – Proposition, People and Process.
You’ve got to have a clear success proposition, you’ve got to hire the best people and you’ve got to leverage those people with the right process. Remember to avoid a process-first approach, and don’t forget that you can’t hire your way out of trouble. Having a clear value proposition is one of the fastest ways to increase sales. Clarity is power.