Editor’s note: Bill Warner is founder and managing partner of Paladin Associates, an executive advisory team that works with companies to eliminate roadblocks to their success. He is also moderating a panel at the Council for Entrepreneurial Development’s (CED) upcoming Opportunity 2005 Conference (www.cednc.org/opportunity ), set for Nov. 10-11 in Wilmington, NC. This is the latest in a series of Entrepreneurial Spirit columns published in partnership with Local Tech Wire.
_______________________________________________________________________________________”Let’s get some good sales people. We need those hungry ones that know a lot of customers. That’s all we have to do. Right?”
These are famous beginning and last words. You are selling your product to almost everyone you meet as your business matures. And, everybody in the company sells in one form or another; it’s not just the sales team’s role. You certainly have to identify and sell to potential customers. But, there are many other interested parties that you have to sell to as your company evolves. The sales process begins on day one and lasts for the life of your company.
Selling in the Market Research Phase
Even before you have a product, you have to sell your ideas to contacts you make while doing your market research. This phase is not just filled with reading and finding numbers that support your business strategy. You will have to sell your idea to industry analysts, market consultants, companies providing similar products and potential customers in your chosen markets. Seeking out the opinions of analysts and consultants makes a lot of sense. They know your markets in detail. You present your product or service idea, supported by your business rationale, looking for further insight that they can provide. In a way, you are selling by trying out what you think the value proposition is and how you will take it to market. Understanding that you may not have it quite right, they will provide you feedback that helps you to further refine your business plan.
Contacting companies that are within your market segment is also smart. If they are a potential competitor, you may have to get information from a third party, but you are essentially trying to figure out how your product fits into the market. You are prepared to sell your ideas, but also have questions like:
Of course, the best piece of research is to approach a potential customer and get their feedback. You sell your product or service, but really want to know:
Once you have a well formed business plan, your next sales call will be on a venture firm or potential strategic partner from whom you need money to get your business started. This is a critical sales call which has to be successful. In this case you are selling a lot more than your product or service. You are selling the value of your company, and trying to create a long lasting partnership that will give the funds to launch your company and your vision. The business plan story has to:
This sales call is made by the top executives of the company, who have to be very well prepared to explain all aspects of the business and create excitement with the potential partner.
Selling to Your Channel Partners
If you are going to use indirect channels, you will need to have a sophisticated process to sell 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 established, and in addition to your product or service, will require you to sell some combination of:
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.
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.
Sell to the Influencers
When your product is ready to be taken to market, it is important to make sure all of those that influence your customer are aware of it. Industry consultants, partners and early customers need to know of your plans to launch your product. During the time when the product is first being introduced, you want potential customers to be able to call their outside consultant and get advice on your product. You also want your customers to be able to contact your early customers as a reference for your product. So, you need to make sales calls on all these influencers and make sure they have the most important facts and messages about your product or service. You will look very smart if a potential customer contacts one of them and learns the truth about your product. That is, the truth that you taught them.
Oh, the Media Too
Who would ever give up on some free visibility? Another important influencer is the media. They represent trade magazines, local newspapers, business press, television specials and radio news programs. When you launch your product, they too will need to know about your product or service. You want your customers to read the right messages, and from the media source that makes them aware of new products and services. The media will want to get quotes from consultants, analysts, customers and partners. They make the story come to life with the reality that it’s not just your company talking about the new product or service. Always make the media aware of positive news and use them as a way to get effective marketing information to customers.
So, selling is a process that involves much more than sending the hungry sales people after potential customers. Selling involves approaching the whole set of stakeholders in your market segments. You need to make sure that your company properly fits and that your customers know all the right things about your product or service.
Bill Warner is managing partner of Paladin and Associates. You can reach him via e-mail (email@example.com) or phone (919 570-1023).