10 Keys for Startup Sales and Marketing Success

Startups need to be a scalpel, not a Swiss Army Knife

I’ve been very fortunate over the past few years to work at exciting organizations like Salesforce Radian6. Over time, I’ve also had the opportunity to meet many young companies who have questions about Marketing (and Sales) for their startups. While I don’t profess to have all the answers, there are opportunities for them to learn from some of the mistakes I’ve made over the years.

Usually these first meetings are at a Starbucks and I have a pretty tried and true list of questions I ask. These have been tweaked over many coffees and heavily influenced by people like Rob Begg, Jon McGinley and Sandy Walsh. The list below contains what I believe a startup needs to consider before beginning to invest a lot of scarce resources into Sales and Marketing.

Your product is special, your problems are common

Over all these coffees with founders, my own mistakes (and successes) and the experiences of my friends, I’ve come to realize that there is a fairly consistent set of mis-steps that young companies make. They include:

  • Underestimating the complexity of the sales cycle
  • Underestimating the length of the sales cycle
  • Over-investing in product and development in the early stages and under-investing in selling that product
  • Viewing marketing and sales enablement as an expense instead of an investment
  • Looking for funding, but being unprepared to answer basic the questions that investors ask

1.What is your value proposition?

Can you communicate your own value proposition without relying on the value proposition of another company? As soon as you say that you are the “Uber of rickshaws” or “Gmail on steroids”, you are relying on someone else’s marketing, their brand and all the biases that come with it. When you tell someone you are “insert legacy vendor on steroids” you are setting an expectation (good and bad) that you can’t and don’t want to meet.

Aside from that, can you distill your value proposition far beyond the two-minute elevator pitch? Critically, for the online world, can you do it in one sentence, with 156 or fewer characters? A Google snippet, that headline that appears at the top of each search result, is 156 characters. And Google is the Internet. You need to be able to communicate your value to the world in that one line. Hubspot (see example below), does a great job of this.

Hubspot SEO Perfection

2.Who is your customer?

Generally, the founders I speak with have an idea for a customer that is too broad. I get answers like “hotels” or “marketing departments” or “people with kids”. These groups are impossible to market to. An example I often use is from my days working for a national cinema chain. If you operate movie theaters, your target audience can be as broad as human beings within a xxx minute drive. But what we actually found, was that the best customers to target were mothers with young families. They attended the movies in groups of adult friends or with their children. Attracting them drove multiple ticket sales per person, as opposed to teenagers, who attended alone or in pairs.

If even something as established as a cinema chain needs to target its customers more effectively, how narrow does a startup need to go? Very narrow. It is expensive to market and attempt to sell into “hotels”. You can’t afford it. What you could afford to do in your early days would be to focus on multi-unit owners with between 5 and 15 hotels, who are located in New England.

Saying any company that does “xyz” is not sufficient. “Marketing Departments” is not sufficient. “Large multi-nationals” is not sufficient.

  • What is the industry?
  • What is the organization size?
  • Where are they located?

Be narrow. Own a space. Create a beachhead. You may need to broaden or pivot, but if you start as broad as possible, your product will never please and your sales team will be all over the place (literally and figuratively).

3.Who at this organization might buy your product?

I once received very sage advice about selling B2B (Business to Business) products. You are not selling to the CEO. You are probably not selling to the CMO. And no one sells to Cisco or Ford or General Electric. You are selling to one of the hundreds of tiny federated mini-companies within those organizations.

There is also a good chance you are selling to multiple people in an organization at once, ideally with a single executive sponsor. As an example, to complete a sale, you might not only have to get John in IT to agree to buy your product, but you may also need to sell it to Procurement, InfoSec, Legal and John’s VP. These other parties dramatically extend the sales cycle. Playing nice with them and understanding their pain points and power is critical. Structuring sales and your pricing to avoid them is optimal. As an example, if your primary contact requires approval from the CFO for a purchase over $10,000, figure out a way to make your price $9,999. This means using a CRM and asking questions about what a person’s allowable spend without approval is, when they plan their budgets, what other people are involved in the buying process etc.

4.Who is your end user?

If you are selling a B2B SaaS (Software as a Service) product, your end user is often not your buyer. As an example, the person who makes the decision to purchase a CRM may use it only at a very high level, or not at all. The day-to-day users are the Sales teams, who have very different desires, needs and technical chops than a CTO or VP of Sales. Technical founders often design a product that they want, that meets the feature wishlist of the buyer, but is too difficult to use and not sticky for the end user. Eventually employees report up the chain that the product is broken, they can’t use it and then the client refuses to pay (or at a minimum renew).

Similarly, be cognizant of how much training the end-user will require and do everything you can to facilitate that. Use Camtasia to make cheap 2 minute tutorials, publish a public knowledge base with Desk, automatically sign up new users for training drip emails. Do whatever you have to do to ensure that the end-user keeps logging in.

5.What is their buying pattern?

Understanding the buying pattern of your potential customers is critical to completing the sale in a timely manner. Do they tend to purchase infrastructure at the start of their fiscal year? When is the start of their fiscal year? When do they do their budget planning and can ensure you are included? Do they often “dump” remaining budget at the end of the quarter or year and how can you be top of mind when they do? Or are they buying on their credit card and filing it as an expense?

6.What, not who, is your competition?

The competition isn’t just the legacy vendor you are trying to replace. Understanding who the market leaders are and how you differentiate from them is important. As important though, who else are you competing with for share of wallet and share of internal resources. Often, because you are creating the space you are in, you are competing for a share of someone’s budget, not against a similar product. In many cases that means that for you to make your sale, the buyer has to cut back on or do without another tool they already spend money on. Additionally, there may be other projects being rolled out that compete for share of internal resources. You may hear things like “we love the product, but we’re implementing a new CRM this spring, call us back next quarter”. Competing for your potential customer’s time is often tougher than for their money.

7.How much will your average sale be?

Deciding on pricing is a painstaking task and you should expect to change it fairly regularly in the early days. When I ask this question, I’m not concerned on if you say $200 vs $300. What I am thinking about is whether or not your planned price matches how you expect to make sales. As an example, if you have a product that needs to be sold in person, but sells for $200, you have a recipe for failure.  Along those lines, I recommend you check out this Techcrunch post on common pricing mistakes.

Also, I ask because I am wondering if you are planning for a one-time sale or a subscription model. If it will be subscription, will renewals be monthly or annual and will they be automatic? Will payments for renewals be up-front annual, and if not, how does that impact cash flow? Are there upfront implementation costs that can be covered by pro-services and configuration fees and would these help cover initial sales costs? All things to consider.

8.How long will your sales cycle will be?

Your sales-cycle will be twice as long as you initially predict. Life is just tough that way, so budget for it. People make the mistake of basing their predicted length of sales cycle on how long it has taken them to buy things in the past. The issue is that in most cases, this is based on an experience with an established vendor, in an established space that had more resources then a startup does.

The sales cycle can be sped up by careful use of a CRM (more on that here), savvy sales people and good product planning, but at the end of the day if the buyer decides to go to Orlando for two weeks in June, there is nothing you can do about it. So ensure you find out things like what work or personal time-outs they have coming up, if there are regular times of the year they go into spending freezes and whatever other friction exists between the first touch and closing the sale.

This isn’t just important for closing the deal, it is also critical in hiring and retaining good sales people. Every industry has slow and busy periods. There will be times in the year when sales are slow and when they peak. You want to hire sales people well in advance of a peak, so they are well trained and ready, but not before a trough, when they will become demotivated.

Also, if you are selling a B2B enterprise product, assume there won’t be sales in the first year. It often takes that long or longer to get the product and the value proposition to a place where sales occur. In the meantime, you need to still be banging the phones and speaking with hundreds of potential customers, but make sure you have the runway you need to weather that dry spell.

9.How will potential customers hear about you?

Hearing about you and from you are two very different things. When you are developing a new brand and sometimes a new space, both are critical. On a startup budget, how are potential customers going to hear about you? Word of mouth, social media, paid advertising and organic search are what people usually answer, but are they realistic? How much word of mouth can a new market entrant with no customers have? Similarly, without investing in advertising, is it realistic to think that there will be a large number of people following you on social media and is there money to do that? Organic search is effective, but it an investment in content creation and sometimes months to begin to rank. What is the plan in the meantime?

10.How will potential customers hear from you?

Most startups like to believe and often focus on growing a sales cycle that takes place exclusively online. It is possible to do, but this strategy tends to work far better for B2C (Business to Consumer) plays than B2B plays. In many cases, especially before a company gains product traction and perfects their market fit, sales need to take place over the phone. There is just no substitution for someone making 50, 75, 100 calls a day and following up with each lead 6-9 times before giving up. Or, is your customer and the product you sell something that needs to be sold in person and if so, are you budgeting generously for travel costs?

Bonus Question: Are you selling vitamins or painkillers?

Finally, and perhaps most importantly, are you going to be selling a Vitamin or a Painkiller (full credit to Sandy Walsh for this analogy)? Communicating your value proposition is hard. Narrowing down whether you are helping reduce a customer’s pain point (inventory theft, decreasing employee turnover, cutting server costs etc) or providing a vitamin (increasing average basket size, increasing conversion rates etc) is key to this. While over time you may do both, at least in the beginning it helps to focus on one or the other.

Every time I am asked for advice, I always start and end the conversation with a caveat. Any advice I give, is just that, advice. There is no obligation to do it and you should keep in mind that this is is based on my experience and only knowing about your organization for 30 minutes. You should weight that heavily when considering what I’ve said. This post is no different. For some, the advice will be bang on, but for a small minority it won’t be, because there are always factors to consider that can’t be communicated in 2,500 words.

Have feedback on these ten questions? Let me know in the comments section below.

The feature image above is an adaptation of one from the folks at intercom.io. They have a great post on prioritizing features that I highly recommend you check out here.

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