4 COSTLY MISTAKES FIRST TIME FOUNDERS MAKE IN SALES
Founders are busy. Really busy. You don’t have enough minutes in a day to get through your to-do list so it’s easy to skim by when it comes to creating and implementing a sales process. Unfortunately, this is a costly mistake. But luckily, all of these missteps are avoidable if you know what to look for. This blog post outlines the the top 4 mistakes to avoid if you want to save yourself time, money and confusion down the line:
Mistake # 1– Founders Not Selling The Product Themselves Before Making Their First Sales Hire
It’s essential that first time founders sell their own product before hiring anyone else to sell it for them. This is the number one mistake we see startups make. I can’t emphasize this enough. It’s a huge problem for a few reasons:
- Sales is a vital skillset for founders to have. Whether you’re pitching investors, convincing rock stars to join your team, or selling customers on your product - it all revolves around sales. As a founder, you know your product and the market better than anyone else you could hire. It’s your responsibility to understand your customer and ensure you have a sellable product. So don’t hire someone else to do your job until you know how to do it.
- Hiring for skillsets that you don’t understand. If you don’t know the skillsets needed to sell your product from doing it yourself, you’ll have no idea how to hire. You need to have a process in place in order to train whoever you are bringing on board. If you can’t set them up for success, then you should not make the hire.
- Founder/Customer Interaction is Critical: What better way to figure out if your product is sellable than by asking the customers themselves? Selling will enable you to understand how to market, set prices and what to prioritize and develop. You’ll learn all of the customer’s objections and discover knowledge gaps, which you can fill through thought leadership (a critical component of selling). You’ll also have the opportunity to test different theories and tactics to see what works and what doesn’t, enabling you to refine your process.
Mistake #2 – Not Defining Your Target Market
Many founders fail to properly define their target market early in their sales process by narrowly focusing too soon or selling to anyone who will buy the product vs the ideal buyer. To learn more about defining target markets, see our blog post titled “Building A Sales Strategy From Scratch - Step 1: Identifying Your Target Market.”
Too Narrow: Jumping to conclusions about who your target market is, is like chasing a rabbit down the hole. You get too far, too fast before you realize it’s not a good fit. It’s important to research the markets available before focussing on a target market. It’s nearly impossible to know that you’ve chosen the right slice without first testing a variety of segments. Testing will take a few weeks but afterwards, you’ll have the peace of mind knowing that you’re heading in the right direction. If you haven’t figured out where the pain and the money is for your market, then it’s too early to choose one and you need to go back and do more customer discovery interviews.
Too Broad: Trying to capture everything and the kitchen sink is never an effective strategy and will cause you a lot of problems down the line. Never go after your total addressable market at once. If you’re selling to everyone, then you’re selling to no one because it’s going to be very difficult for any specific customer to believe that your product is right for them and solves their particular need. When you try to cater to everyone, you can’t focus your product development on a particular market’s needs, leading you to try to do everything but doing nothing well, wasting precious time and money.
You’ll also lose any virality you may have had otherwise by focusing. Virality builds on itself and is generated when like minded customers talk about and find value in your product. This will occur only when you’ve penetrated a specific market segment, which is impossible to do if you spread yourself too thin. If you don’t focus on a particular segment, then you’ll have to put a lot more effort into product marketing and creating awareness.
Mistake #3 - Undervaluing the Role of Sales Within a Go-to-Market Strategy
Expecting your product to sell itself is a huge misconception fueled by what’s marketed as “overnight” success stories and viral adoption of a product. This simply isn’t true, particularly if you are in the B2B space. You must put effort and resources into identifying how your target market buys products. Creating awareness alone through marketing will not cut it.
Sales is a crucial piece of your go-to-market strategy and will provide a path to repeatable, scalable processes. It’s imperative that you find and test your sales process by determining your target market, conducting customer interviews, learning the true value of your product, which channels are the best for reaching potential customers and the steps your target buyer needs to go through to purchase your product. You can’t find this out with marketing alone. You can create as much awareness as you want around a product but if you’re not speaking the same language or identified the right pain points, you will not be as successful as you’d be if you’d implemented a tested and proven sales strategy.
Mistake #4 – Not Tracking Sales Data
Tracking your sales pipeline from the very beginning is critical for companies to build a business model. Sales is science and a process. The more data you have, the more information you know about what’s working and what isn’t, allowing you to test, build and improve your process. Sales data is particularly useful when it comes to making your first sales hire. If you haven’t been tracking your sales process, how will you know you’ve set a reasonable sales quota? How will your hire find out who you’ve contacted and the history of the relationship? How will they know what tactics have been successful and which ones have flopped?
Tracking data allows you to create a process. And you can’t train a new sales hire without a process in place first. It’s imperative to set your new sales hires up for success by providing them with the right information and tools to do their job and do it well.
Don’t Make The Same Common Mistakes
Founders, we know you’ve got a lot on your plate but we hope that you heed this advice. Don’t cut corners now to save a bit of time because it will cost you down the road. Put some time into your go-market sales strategy, define your target market, sell your product before making a sales hire, and track your sales data. If you do all of these things, you’ll put yourself in a solid place to make your first sales hires and scale your sales process.