Editor’s note: Bill Warner is managing partner of Paladin and Associates, a Triangle-based executive advisory firm. Warner is also a frequent guest speaker for the Council for Entrepreneurial Development (CED). This is the latest in a series of Entrepreneurial Spirit columns for LTW from the membership of CED.
_______________________________________________________________________________________Hey, we have a product and know our value. Now, all we have to do is hire some good sales people and we are off and running. Right?
Not so fast.
You are selling your product from the time you put together your first market study and every day thereafter. Actually, everybody in the company sells in one form or another; it’s not just the sales team’s role. You have to sell to your employees, stakeholders, investors, channel partners, alliance partners and customers. Let’s focus on selling the company’s products and services.
Your First Sales Call
Once you have a well-formed business plan, your first sales call will be to companies that you will want to buy your product some day. During your market validation you should call on prospective customers to determine if your value proposition is valid and whether or not the buyer will be interested enough to actually buy the product. You are finding out:
In this process, you will have created a relationship that could turn out to be your first revenue producing sale. You would be wise to establish a relationship that will last through the entire time before the product is ready to go to market. Foster the customer relationship as if they are your first paying customer, because they may turn out to be just that. Become partners with them.
Before the product is ready to go to market, you should establish relationships with early adopter customers. These customers will be your first users of your product and will require special handling. You sell your product to them. Make them a good deal. Give them special support. Get them to agree to take the first version of the product and actually use it.
They are your “lighthouse accounts,” showing the way for the upcoming product introduction. This “beta” customer engagement will give you a chance to validate not only your product’s capabilities, but also your entire service and support infrastructure. You are testing out your product in a real customer environment. These buyers should ultimately become some of your first paying customers.
Sell to Your Channel Partners
With your understanding of your sales and distribution channel, your next set of sales calls is to the channel partners through which your product will reach the ultimate buyer. The value proposition has to be specifically tailored for this audience to show them how they are going to make money in a relationship with your company. The partnerships could be with wholesalers, distributors, integrators, value added resellers and dealers. All of these partnerships have to be set up before you go to market, and will require:
Your sales efforts are to close a channel partner agreement that will result in financial success for them and an increase in revenue for your company. These will be long term relationships and should be nurtured as you would any valued customer.
What About Alliance Partners?
If your product requires that you have to go to market jointly with another company, you have to make sales calls to them too. For example, if your product is integrated with another company’s product, then you may have to have an agreement where you are jointly marketing and selling. You may be integrating some other company’s product into your solution, so an agreement is needed for you to market and sell their product along with yours. The value proposition here has to bring a share of the overall revenue to the partner to recover the expense that they incurred plus a reasonable profit. As with channel partners, keep working hard to support these relationships because they are key to your company’s success.
Now You Are Ready To Sell the Product
Whether you have a direct sales force or your selling is done by other companies, you now have to make sure that the buyer is handled in the best way possible to insure a sale. The key success factors are:
All of these success factors are guided by one simple principle. Provide the buyer:
The preparation for the sales work has to be achieved before the product goes to market and should be thoroughly checked out. Get the best people who are really well founded in the principles of selling and who have relevant experience in the market that your are pursuing. Some of the most critical hiring decisions will be in selecting the right sales team.
So, selling is something that starts from the very inception of the product idea and never stops thereafter. Selling involves approaching the whole distribution channel as well as other stakeholders in the market landscape. A well-oiled sales operation is essential to the success of any business.
Bill Warner is managing partner of Paladin and Associates. You can reach him via e-mail (email@example.com) or phone (919 570-1023).