Rapid Innovation Group blog

How to approach an initial sales meeting

I wanted to write this post to follow up a previous one which covered the importance of having an effective sales process. The post began with a comment that entrepreneurs have a fantastic passion for their products and are able to convey this deep enthusiasm in sales pitches.

The risk is that this can lead to relying upon a solution-centric approach which takes no heed of the prospect’s challenges. Founding CEOs frequently turn up at a sales meeting and wax lyrical about the features, capabilities and benefits of their solution. But how can you presume the solution will solve the prospect’s problem, without understanding what that problem is in detail? Getting this right is especially important at the early stages of your company’s life, as feedback from these early sales meetings can be vital to helping you refine product / market fit in the wider sense.

A meeting (or meeting preparation) should always begin with a focus on identifying the prospect’s key challenges. In addition to taking this approach for our clients, we also use it with our own prospects. I thought I would lay out the high-level methodology I employ when meeting potential future clients, because although we are selling services, the same approach should be used as part of a consultative sales process for an enterprise technology solution.

Set a clear objective

E.g. ‘To understand the {prospect’s} key growth objectives, strategies and the accompanying challenges. From this, to determine whether our capabilities and experience could be utilised to help address these challenges and as such accelerate the growth of the business’

Understand their challenges (to determine whether they can be addressed by your competencies / capabilities)

1. Elucidate these through a series of insightful questions. This serves a number of purposes beyond identifying their challenges:
   1. By asking the right questions, you demonstrate your expertise
   2. It gives a chance for you to highlight issues / opportunities which the prospect may not have been aware of
   3. It shows you have done your homework on their company, demonstrating that winning their business is of value to you
   
   
2. For example, I often try to drill down to the crux of a prospect’s challenges by structuring questions under the following headings:
   1. Market and competitive landscape
   2. Growth objectives / window of opportunity
   3. Market focus and rationale
   4. Market strategy and proposition
   5. Demand generation activities
   6. Sales and sales management processes
   7. Partnering capabilities
   
   
3. Explore potential synergies / areas of collaboration
   1. Give a relevant (according to the answers to the questions) background to your company / solution
   2. Discuss how a relevant selection of your competencies / capabilities could be used to address their most strategic challenges (elucidated earlier on)
   3. Add credence to the discussion by referring to appropriate case studies

Next steps (if appropriate)

1. Agree to structure the discussions into an objective driven programme of work
   1. If well put together, this document will in itself give you significant credibility, as well as laying out the value the prospect will gain from the collaboration
   2. Suggesting to put together this programme of work should be compelling for the prospect – they should get value from it even if they end up not choosing you to execute upon it

If you are thoughtful, effective and easy to work with during the sales process, you give direct assurance to the prospect that this will be the case after the sale. As well as using what you learn to tailor the relevance of your offering to the company in question, it also helps you develop your overall proposition and further refine your product / market fit.

What can startups learn from the Rugby World Cup?

The final of the Rugby World Cup took place over the weekend, with New Zealand winning the title for the first time in 24 years on their home turf. As a disappointed England supporter, the end of the competition led me to do some thinking about what went wrong and where those lessons might apply to growth-stage companies.

What can you learn from your competition?

If you’re England’s competition, the biggest thing to be learned from their performance is probably how not to do things.

England lost sight of the ultimate goal. They lacked discipline both on and off the pitch and have a lot to answer for in the wake of their performance in New Zealand. The English squad have a lot of lessons to take from this year's tournament, and their competition would be wise to examine England's failures, too. Similarly, as a startup it is worth taking time to review your own failings as well as your competitors' to identify areas for improvement to gain the competitive advantage.

There is valuable insight to be gained from honestly and openly reviewing personal and organisational mistakes as you move forward.  In any company, it can be tempting to keep issues hushed up, but a small, entrepreneurial team can greatly benefit from promoting candor and accountability. Everyone on the team needs to be driven to build the company, and so they should all have sight of and responsibility for the obstacles to growth.

Learning from your competitors’ mistakes is vital in order to turn their failures into your successes. If they have stumbled, it is worth looking at where they have come across trouble – Did their product have too many features? Were they listening to customer feedback?  – and analyse your own plans to avoid encountering the same situations.

Entrepreneurs can’t afford to take their eyes off the prize if they want to go home with the trophy at the end of the day. Focus and aggressive pursuit of the end goal are as necessary to entrepreneurship as they are to rugby. When you lose that commitment to putting everything you have on the line to outpace your competition, your chances of succeeding are significantly decreased.

Do great players automatically make great coaches?

In the context of all the negative media England has received related to their off-pitch antics as well as their under-performance on the pitch, Martin Johnson has caught some serious heat in his role as team manager. Johnno was a great player and captain but does that mean he has what it takes to be a great manager? Furthermore, can he be held solely responsible for England’s failure?

The same can hold true in growing companies. Employees may be great team players with strong skill sets in their positions but this does not necessarily mean that they are ready to be promoted as is. Martin Johnson had no coaching experience before being put in to team manager, and it shows. Similarly, promoting talent up the ladder without providing them supportive training and mentoring can be disastrous if their leadership and people management skills aren’t up to scratch.

So how do you turn great players into great coaches and leaders? Employees should be able to grow themselves as the company grows; there may not be a budget for training courses, but activities such as mentoring from professional contacts or experienced members of a company’s management can provide the base for professional and personal growth. Leadership is a skill to be nurtured.

For a team manager (or CEO), recognising where your shortcomings lie is important in being able to identify your own training and development needs. This might mean actively seeking out relationships with people whose skill sets compliment your weaknesses. It means accepting that in order to be able to focus on the things you are good at, you need people around who are good at the other parts that keep your company going.

The challenges that a high-growth firm CEO faces

We asked our good friend Peter Collins, CEO of Permasense, what are the key challenges a CEO faces when running a company of Permasense’s size? How should you prioritise your tasks and how would you define a good strategy to overcome these challenges?

Be clear about strategy

"I define strategy as 'where and how you are going to compete.'

"By 'where,' I mean in which segment and in what market. Segmentation, and then choosing just one or a very few segments on which to focus, is crucial. Identify those likeliest to be receptive to, and be early adopters of, your proposition. Focus on them to maximise the effectiveness of your awareness-building effort (since your promotion resources are limited) and to maximise the relevance of your references."

Be clear about how you are going to compete

"Know what differentiates your product or service and how you offer it. Many technology-based businesses are very aware of technology differentiation in their product or service. But being easy to do business with can be just as important. And keep asking yourself - and your customers - if you are maintaining your chosen differentiation..."

Stay focused

"It's all too easy to get distracted by 'greener fields' - for example, apparent marketing opportunities in unrelated segments, endless customisation of product..."

Find the right people

"You’ll hear this over and over again - for a reason. Attitude is key - pride in doing a job well if at all, focus on customer...and energy! The right people are those that see growth companies as an opportunity rather than a risk..."

Manage cash

"The important account is the bank account. Know what you need to operate for at least the next 6 months, and manage your costs to be able to trade for at least that length of time without having to count on new revenues..."

Can you be a lean startup and a visionary entrepreneur?

I like the ideas around 'lean' methodologies for startups that have been developed from their manufacturing background in Eric Ries' new book, The Lean Startup. It's now on our recommended reading list and I cited some of its principles in my recent podcast on market leadership.

To use Ries' 'lean methodology' is to ensure that your startup grows its customers, its product, its team, its financials, and its business model in sync: slowly, iteratively, and securely.

As an example, an entrepreneur should never make huge investment in a product without getting the right feedback from potential customers; without getting the right team in place to deliver it; without being properly financed; and without having developed a business model to support it. Ries implies that expanding markedly along any single axis will lead to wasted investment and potentially catastrophic failure.

The Startup Genome project produced an excellent report entitled A Deep Dive Into The Anatomy Of Premature Scaling, using the example of the Sequoia Capital-backed startup, Color, which managed to raise $46m in Venture Capital funding before its launch. The graphic shows how Color was out of harmony in its growth because it had a huge PR campaign, a highly-experienced and extensive management team, lots of capital, but no product and no customers.

But I'm not sure that 'lean' growth is always the right approach for startups.

Admittedly, there are some startups that are trying to respond to a current, well-known need in the market. For instance, the UK's Carbon Reduction Commitment legislation required UK businesses of a certain size to declare their carbon footprint on an annual basis, so a group of technology startups sprung up providing services and software to help them do it. In that case, it makes a lot of sense to grow a startup securely on the basis of regular customer feedback.

But there is another category of startups that are making a bet on an emerging, currently unperceived need. Twitter was one of those startups. So was Zynga. Color might be another. These are companies that ignored early market sentiment because they believed in a vision of how the market would act if their product became sufficiently developed.

Plenty of investors looked at early versions Twitter and Zynga and professed to 'not getting it': "Why would I want to limit my blog posts to 140 characters?"; "Why would I login to Facebook to play poker?"; but both companies now have enormous valuations. Howard Schultz of Starbucks used to say, "If I went to a group of consumers and asked them if I should sell a $4 cup of coffee, what would they have told me?"

But it's the companies that make these bets successfully that generate the greatest returns because they have more time to get ahead of the competition - not the ones that compete to respond best to existing market needs. Conversely it's the companies that make the wrong bets about the future that fail the quickest.

I like the ideas behind 'lean' but I don't think it should be seen as the only viable set of principles for a startup's growth. If you're trying to create a 'visionary' startup that's truly transformational then you should allow yourself to press ahead despite negative feedback in the early days, as long as you do so in the knowledge that this approach has a higher risk of failure as well as a higher potential return.

If your assumptions about the market prove to be incorrect then you'll fail spectacularly. If you're proved correct then you'll be on the front page of Forbes magazine.

A check-list for taking your business abroad

What are some of the key considerations and potential challenges in taking business abroad? We asked Fanny Dolo, Key Account Manager at WISAFORCE, in charge of the UK market…

“You should establish yourself in your home country before expanding out. Before you do, it is important to have the following ticked-off your check-list: 

• References
• Financial resources
• Marketing budget
• Technical resources, and
• Translated documentation

"You need to seek opportunities and have the resources to capture them.

"Furthermore, it takes time to create a network in a new market. For our product, the sales process to a large corporation takes a minimum of a year from initial contact to selling. It takes time because you need to educate the client on why they need the product/service and how it would be useful to them, and they need to approve the work internally.

"Additionally, you need to be aware of the different price sensitivities and pricing structures in the countries you are working in. In France for example, there often are set-up costs in the software industry whereas in the UK, this is not the case. You need to find new ways to communicate with the clients in order to differentiate from your competitors, within the guidelines of the culture of the country you enter.”