The original post of this article on appeared on GigaOm in a more concise version here.
I previously covered how early phase sales teams should be “evangelical” and consultative in nature. As a tech startup grows it needs to develop more process & management if it is to scale. I call this “arming & aiming” your salesforce. The first post on scaling sales dealt with “aiming” your sales teams – making sure they were focused on the right opportunities. This one deals with “arming” your teams – preparing them for battle by giving them the right tools to increase their win rates.
One of the biggest areas I’ve noticed many sales teams don’t spend time on to train their staff is “objection handling.” When I talk to people about sales I often describe the sales process as a series of hurdles (objections) that are put up to avoid making a purchase and your responsibility is to work through these common objections with your customer.
[update: as per Phil Sugar’s excellent comments below – you need to first be sure that the customer has a need that you can solve and is ready to buy. The first rule is sales is qualify, qualify, qualify so you don’t spend time overcoming hurdles only to find out there is no buyer.]
In the evangelical phase you’re working through these with customers on the fly. Some objections are real and they end up becoming changes to your product, your service plan or your pricing / bundling. Some objections are just excuses not to buy that can be overcome with enough time, effort and evidence.
As a founder, when you’ve been dealing with these kinds of objections for a couple of years it becomes natural and you easily handle objections on price, product & competition without much thought. It is tacit knowledge. But to effectively scale a sales team you need to codify it, train your sales teams, monitor results, refine your messages and then refine the training / rollout to your teams.
Some examples of common objections across many companies:
1. Prices are too high – Inexperienced sales reps will try to convince you they need to lower price to win deals. More experienced sales leaders seldom compete on price. They’ll discount – sure. But they want to establish a baseline in the customer’s mind of the value they will get by using your product. And the only way to do that is to help them calculate the ROI (return on investment) of using your product. As a company you need to invest in ROI calculators (spreadsheets) that are easy for sales reps to plug in basic customer metrics and pop out with an expected benefit. It is even better when the spreadsheets were established with your early customers and therefore the baseline for the calculations are real. Even better if that customer is referenceable! Referenceable customers are the holy grail of sales.
2. You’re more expensive than competitors – “Of course we are. We’re a premium product. Let me walk you through the comparison set of our offering versus our competitors…” You need to talk them through your advantages. For example, if you’ve raised 3x the funding of your nearest competitor then you talk about the investment dollars you’re putting into your product versus the competition. “It’s not about buying the product only where it’s at today – even though we’re advanced there – it’s about where the product is going. We’ve investing in R&D at a faster rate than the competition which is why we raised $10 million to fund extra development.”
3. We’d rather buy the “all-in-one” solution - Let me show you our API’s and how we integrate. You can have best of both worlds. All-in-one solutions may initially seem appealing but you end up getting inferior innovation. Our big, integrated competitor is investing across 12 different product sets. We only do 2 and therefore those two are much deeper / better functionality / more focused. Let me show you how you can use both of our products seamlessly.
These are made-up examples but they are typical of the kind of knowledge you gain over time for how to win an increased percentage of competitive deals. You need to codify all of your knowledge, put it into writing that can be disseminated to distributed sales reps and run training exercises where you drill people on the most raised objections.
And importantly you also need to get feedback from your sales reps who are on the front line every day what is working and what isn’t. Don’t think that you have all the answers in the ivory tower.
If you don’t arm sales people with the knowledge of how to overcome these obvious hurdles then each one will be competing without the collective wisdom of your company’s years of experience.
The next post will talk about more of the munitions your sales reps need.