All of this is in your control.
Adding new paying customers is hard work under the best of circumstances. Assumptions for the rate of customer adds are often the most ambitious, and unrealistic. This is especially true for emerging companies “learning as they go.”
With few exceptions, every emerging company has struggled in some way with sales that aren’t “on-track.” Reasons vary. Perhaps a two-person sales team jumped to four or five in less than six months. Or a new product releases with broader benefit and higher price point. Or a recent hire isn’t working out.
The result are sales that slow or stall when you can least afford it. Once lost, momentum takes time and resources to rebuild. This can delay or shelve the next capital raise, or at a minimum result in less desirable terms like valuation or preferences.
These 5 Basic Steps will help in your effort to get sales on-track.
#1 Question Your Assumptions
Dig into key assumptions that drive your top-line sales projection. Reality check the number of customer-adds, rate of acceleration, and average selling price. Are these based on recent performance or do they represent a large shift? If the former, is performance sustainable at the target price point, or driven by a deal hard to repeat. If the later, can you defend the big uptick to a potential investor?
If the top-line number is “reasonable,” cascade it down to the rep level. This allows you to compare allocated targets to each rep’s recent performance.
Next, for each rep overlay sales pipeline to his or her target. This is another gut check to assess size of gap, pinpoint anomalies, and assess if you have coverage necessary with a reasonable probability of achieving plan. Make sure these opportunities are qualified using clear, consistent criteria.
#2 New customer acquisition time
One of most misjudged aspects of building a business is the time needed to add new customers. Assuming you are dealing with qualified prospects, you should plan for the process to take at least 2x longer than you first assume.
Improving accuracy is paramount to building predictable revenue. Validate sales cycle time from first conversation to close, as well as time required to advance from one stage to the next.
Tip: Perhaps the single biggest issue sales teams face is working opportunities that should have been disqualified much earlier in the selling process. This means your sellers aren’t spending time with more promising prospects.
#3 Your People
Lots of content exists on the topic of sales talent so I will share my favorites for emerging companies: (a) Is the rep likeable, (b) Is he or she an active listener driven by natural curiosity, (c) Do they know who they need to sell to, and (d) Do they know what motivates the other side.
It will be exceptionally difficult, if not impossible to achieve big sales results if any one of these four is missing.
It goes without saying that evidence of resiliency and self-motivation are table stakes.
Use this lens to evaluate your reps. Join them on sales calls, over the phone or in-person. Coach tirelessly. Make sure that they have what they need to succeed. If they don’t, prioritize the fix. If it is still isn’t working out, take fast action. Failure can be catastrophic to an emerging company.
#4 Top-of-funnel support
Smart, surgical investments in marketing produce results that drive top-of-funnel performance. If this part of the prospect engagement process isn’t optimized, then you are better off investing here than hiring one more sales rep. Or consider dropping a rep to re-allocate dollars.
For example, your website is where your audience converts from one step to the next in the consideration continuum. Dynamic content, search engine optimization, and social media all support this process.
Outbound marketing amplifies inbound efforts, and targets specific opportunities. This is a way to introduce message and content to prospects, typically through “rented” attention. Outbound can get someone to think about you if they haven’t thought about you yet. Events, email marketing, and tele-sales are all levers to pull wisely.
Big misses are failures to see investments like this as critical to improving sales rep productivity, as well as lowering overall cost of customer acquisition.
#5 Keep it simple
For an emerging company, speed matters. Your sales pitch shouldn’t be overcomplicated. The mark of true knowledge is how well you can explain to the average person. Keep your pitch simple and under 30 seconds. Practice until it is perfect.
The same is true for the prospect experience across all points of interaction. This applies to external touch points like website and sales deck, as well as internal systems like marketing automation and opportunity sales stages. And it applies equally to SKUs, pricing, and contracts.
Your goal is to remove friction everywhere you can. You soon-to-be-customer will thank you. Your team will too.
Bringing It All Together
The rate at which a business adds new paying customers at the lowest reasonable cost is the biggest driver of success. These 5 Basic Steps will help move you closer to that objective. There is no such thing as a short-cut, and hoping things will “turn around” is not a strategy. The good news is that all of this is in your control.
Chris Preston is a business advisor and sales leader who helps turn emerging companies into market leaders. A former Microsoft executive, two-time startup veteran, and board member, he is founder of True Partners Advisory. If you’d like a little help, contact us.