Part 1: Why Isn’t Our Sales Working?!

How to, Interview
Startuppers are sometimes adamant about how they approach sales. They take something into their heads and are unable to withdraw from it for a long time, even if they know or suspect that it doesn't work. For example, in the area of ​​sales, they focus all their energy on cold calling without trying a different way of contacting potential customers. According to interim sales director and UP21 copilot Petr Sobotka, it is important to try out different strategies and start using the one that brings results as quickly as possible.

What is the most common problem of startups?

Since I specialize in sales, I have noticed that startups often choose one way of reaching out to customers, stubbornly hold on to it, and then wonder why the strategy they chose does not deliver results. They forget that it is necessary to try more ways of reaching out to customers. When you have a hypothesis about who your customers are, you can think of four ways to get to them, gradually try them and combine them. Not choose one, put all the money and effort of the whole sales team into it, and then be surprised that it doesn't work.

Petr Sobotka, Sales Consultant a UP21 kopilot

What ways are you talking about?

There are different ways to find and reach customers. Nowadays, 'social selling', the use of social networks for establishing and building new business relationships, is very popular. In practice, this often involves sharing interesting content with the target audience, and thus creating warm leads (note: leads are potential customers who are interested in your services). Honza Kyselý and Jiří Jambor from Future Sales wrote a book called Social Selling on this topic.

What else can startups do to reach potential customers?

They can organize events for their target audience. The company DigiSkills organizes HR business breakfasts, where they share their know-how on a particular subject, and through these events they get access to new clients who see their undisputed competence in the field. Then it is up to the sales department to follow up and address the participants for further discussions. Certainly, it is good to have a nice website with a call-to-action, for example a subscription to a newsletter or other interesting content that requires contact information. And suddenly cold lead can become warm if salesmen work well with it. 

Another option is to create simple e-books on interesting topics, which at the moment of downloading require entering contact information, or attend conferences where your target customers are. There are dozens of ways to get to customers, and you need to look for the right mix that will work well for your business. It is important to try as many ways as possible, choose the ones that work, and fine-tune them.

How does a startup know that a certain way of approaching customers is not working and should be changed?

Every startup should have KPIs (Key Perfomance Indicators), monitor and evaluate them. If they see that the metrics are not being met, they must adjust their strategy. I often see that these metrics are not set at all, or that they are set, but sometimes wrongly and unrealistically, and are not evaluated. And when they are evaluated, no steps are taken to change the negative direction.

Before reaching out to customers, startups should create a business strategy. Could you briefly explain how?

A clear goal needs to be set, for example: "I want to have a 5-million annual turnover", and a strategy to achieve that goal needs to be created. As a salesman, I need to know what type of customers I will reach out to, how many such customers are on the market, how much I can earn on an average deal, how long a business cycle lasts, and how many deals I need to close to get to the amount of 5 million.

Then I need to test customer segments and see what works and fine-tune it. When I realize that the average length of a business cycle is 9 months and now it's January, I have to see if I can handle it alone. If I don't have people, I need to hire them, which takes about two months, and train them, which takes three more months. And all this must be written in the business strategy.

Petr Sobotka is an independent business consultant. He currently leads the UP21 Idea Board, teaches negotiations at the ELAI Institute and creates sales strategies for the MINDFORGE seed technology fund. He also mentors selected startups in UP21.

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