Silver Bullets: Finding And Using Sales Patterns
I often hear startup founders talk about wanting to build a “predictable sales engine”. The founder has their product, they have a decent list of leads and they’ve even got some good reps that have converted a handful of those leads into sales. What they really want, however, is to develop a system that they can use to predict the percentage of leads that will become customers. Doing so can help a startup to find ways of using their resources in the most efficient way possible. How do we, as founders, go about building our predictable sales engine, though?
Because no business offers a product that sells itself 100% of the time (except maybe the Cronut®, but we’ll save that for another article), the only way to build a predictable sales engine is to identify the patterns that make it run. In order to find the patterns, however, we have to conduct experiments.
When thinking about sales experiments, I often picture the startup founder as a seventh-grader in a middle-school chemistry class. They wearing their (metaphorical) pair of goggles and an oversized lab coat. They’ve got number of test tubes filled with different colored potions spread out on a desk in front of them and they’re ready to start mixing things up in order to see what happens. Sure, there are some obvious differences between the founder and a middle-schooler—the founder might have some more life experience, maybe some degrees under their belt and they probably smell a little better (not always)—but what they have in common is that they’re both seeking results.
No matter what the situation, after all, when we conduct experiments, it is ultimately results that we’re after. Finding results is the only way that we can recognize patterns and recognizing patterns is the gateway to predictability. If you’re a startup founder looking to build a predictable sales engine, you’ll want to conduct experiments until you find at least five key patterns to build that engine around. The outline below is intended to help you understand some of the key patterns you’ll want to identify in order to better understand your sales process.
Preliminary Tip: Establish Constraints
Just like in middle school class, there are rules that go with doing an experiment. You want to establish control where you can in order to see which variables produce different results.
In my experience, for example, we often hire two sales reps instead of one. This will benefit you (and your sales rep) in a few ways. First, it relieves them of the immense pressure they’d face by performing alone. At some point early in their career, all sales reps find themselves wide awake in the middle of the night, wondering whether their failures can be attributed to the quality of the product or some flaw in their personality. Save your sales reps the stress and self-doubt by providing them with at least one other person to work off of. This allows the two individuals to collaborate, share information and develop a stronger sales process by taking cues from one another.
Additionally, hiring two people with different profiles and assigning them the same quota enables you to test the impact that their backgrounds have on sales. If you hire a junior sales rep and a senior sales rep, or someone with a background in software and someone with a background in hospitality, for example, you’ll be able to compare how each person has an effect on total sales.
PATTERN #1: Investigate the Buying Process
While the overall buying process will vary depending on what your product is and who you’re doing business with, each step in this order of operations has the opportunity to provide you with valuable information about who your clients are and how they work. For this reason, it is important that you ask the questions you want answers for. Once you’re in a meeting, you have the potential to get a profile of the person you’re interacting with, the nature of their job and what role they have in buying your product. If you meet with the GM of a 400-room hotel, for instance, you can be sure as hell that person knows who purchases your product in a business of that size.
Because the buying process often differs from the selling process, you’ll want to pay close attention to the way a company goes about making purchases. While there are certain habits that companies have in buying something, each company has a different number of people involved and hoops to jump through when making investments. It is important for you, as a startup founder, to find companies that have a buying process conducive to your selling process. Take note of anything that seems relevant. Did they want a demo first? Was the CEO involved? Were a purchasing department or lawyers in the picture? Once you understand the buying patterns among the companies you work with, you and your sales reps will be more prepared for future opportunities.
PATTERN #2: Who is Involved in Your Deals?
Carrying over the buyer information you obtained during your previous experiments, you want to form an understanding of who you need to target. Are you selling to the VP of Sales? The Head of Research? Who do you regularly find yourself on the phone with and across the table from? You also want to know who the end user is and who they report to. As it was pointed out above, this will help you to figure out who you need to be in touch with at each company.
Pay attention to which questions each individual asks and who seems the most interested in your product. When conducting your experiments, you might notice that every time you sell to a company with 15 employees, similar questions will be asked from people with the same job title. Because similar companies have similar needs and concerns, being prepared for these questions will help to you understand how you can solve their problems before you're asked.
PATTERN #3: Track Yo Stats
It can be tempting, as a startup founder, to get excited about all of the sales stuff you can track. You can read sales blogs all day long and pump yourself up about the 59 points tracked at So and So Inc., but that doesn’t matter to you right now. There are only so many things you can fit in your brain at this moment. Focus on just a few things you can track well and put into a system that works.
I recommend that you track stats like these:
Conversion Rate — what percentage of your leads are converting at each step of your sales process? What is the total win-rate of all of your leads? opportunities? proposals? etc.
Sales Cycle — How long did the deal take from first contact to onboard? Track the deal from the moment it becomes an opportunity.
Contract Value — Track the Total Contract Value, the Average Contract Value or the Average Selling Price. Hang onto one of those numbers and benchmark them through ten deals in order to see which contracts your buyers gravitate toward.
Sources — At some point, you’ll start to get business from sources outside of your friends and family. Keeping track of website referrals, outbound sales and other sources will make it easier for you to figure out who to target later.
PATTERN #4: Know Your Ideal Customer Profile (ICP)
Given the research that you’ve done in your first three experiments, you should have a good understanding of who you’re interacting with and what their interest in your product is. Look carefully at the people you’ve closed deals with. What is their job title? What industry do they work in? How much revenue does their company generate Where are they located? Ask yourself what problems they have that you’ve been able to solve. If I’m closing a deal with a VP of Sales who’s pissed off that his reps are underperforming due to poor phone data, for example, and my product offers him a solution to that problem…I want to be in touch with at least ten people exactly like him.
If you can offer someone a solution to the biggest problem they face, you’ve found your silver bullet.
The silver bullet is the customer trait that will close a deal almost immediately. It might take fifty meetings before you figure out what your startup’s silver bullet is, but a bit of experimentation and pattern analysis will help you to find how and where to target the people who need your product most.
PATTERN #5: Beware of Suspicious On Boarding
As you find yourself closing sales, you’ll start to notice certain patterns emerging during the on boarding process. Certain things will go perfectly smoothly and certain people will be very happy, but you might find yourself being asked “suspicious” questions by the people you are handed off to during the latter part of the deal. Before you start writing checks to your team and buying rounds at the bar, it is important to take note of these questions. Maybe someone starts asking about their ability to opt out with a certain time frame. Maybe someone wants to know how the product stores data and ways that they can export it. Questions like this can be a sign that the company plans on running a pilot, as opposed to a contract, and could be a signal that you should see the deal through until their option to back out expires.
If you have the opportunity, find out about the company’s buyers during the on boarding process. What are the needs of their best customers? What do they have in common? In the process of learning about their company, you’ll be able to benchmark your own systems in addition to gleaning valuable information about their competitors.