How To Effectively Experiment with Your Early-Stage Sales Process
Collin Stewart, CEO
14 Dec 2017
In the early days of a company, it’s important, no critical, to determine your ideal customer profile. Even if you haven’t built a sales team yet, you have to know who buys your product, and why. What pain do you solve?
It sounds like an easy conclusion to come to. After all, you built your product (or designed your service) for a reason. You saw a market inefficiency, and plotted to solve it.
But according to sales coach and mentor J. Ryan Williams, nailing down your ICP isn’t as easy as it may initially sound. In fact, many early stage companies get this critical piece wrong because they aren’t strict enough with which clients they include as part of their ICP.
“For a founder listening right now, I’d say, if you have developed your ICP, there is a solid chance you are casting that net too wide. So, I suggest starting by looking at 2-3 companies that you have started with – 2-3 companies that are all very similar, same size, and vertical. Can you go sell to three startups, and get results? You might think that looks great on paper, but when you dig in, you actually find they are in different verticals, and one may be larger than the other,” says Williams, on a recent edition of The Predictable Revenue Podcast.
“So, instead, look at sales with startups that are all SaaS and sell to finance teams. And, if you start finding that they all have the same pain points when you are on discovery calls, then you have found the right cluster. The sales process with those companies will tell you if they purchase the same way, and feel the same pain.”
One of the reasons for the somewhat misguided ICPs that plague early-stage companies stems from product-focused founders. When a founder comes from the product / development realms they are more comfortable focusing, often intensely so, on their product roadmap.
Where they spend less of their time, adds Williams, is on their revenue roadmap. But, that doesn’t mean that the scientific focus and experimentation that is a staple of product development can’t also be applied to the sales process.
In fact, opening your sales process up to the rigours of experimentation will help you better understand your current clients, and better sell to prospective ones.
“I think of the sales team as a data gathering instrument. Founders don’t always realize that,” says Williams.
“The thing about that is, if the founder doesn’t think that sales is a tool to get quick feedback, when you have a fired up sales team that can get quick feedback on a new feature for instance, use that to your advantage. And if you are early, and you don’t have a sales team, don’t think you need to hire a sales team. You just have to put on a different hat, and go back to the drawing board, and understand what your buyers are telling you from the sales process.”
How, then, does one leverage their sales function (whether it be a team or just a founder) to become that data-providing machine? How does sales become a force for experimentation and, ultimately, a better understand of your ICP?
According to Williams, there are two quick experiments anyone can run with their sales org to quickly critical, actionable intelligence:
- Testing to make sure you are targeting the right customer;
- Testing your buyer’s process to make sure you are selling the way a customer wants to buy.
As mentioned above, it is a common mistake of early stage companies to cast too wide a net when determining their ICP. To test assumptions in this area, William suggests focusing on clients that you consider “good fits” and doing well with your product.
Typically, Williams finds that between 10%-20% of the clients of early stage companies aren’t perfect fits, and shouldn’t be used when zeroing in on your ICP. Looking under the hood is key in this area – you have to understand the patterns and similarities with your customers, not just those obvious similarities on the surface area.
“It all starts with a list of the companies that are buying from you, the ones that are doing well, and how much are they paying. So, with that all laid out, you can see what processes you needed to engage in. For example, do you have a company paying you more than 50K? Who approved that budget?” says Williams.
“These are big clues as to where you should be going next.”
As for mirroring your sales process to match your buyer’s needs, Williams says it is critical to think of “why” people in a company use your product. As salespeople, we are often trained to think in terms of “decision maker.” But, instead, we should be thinking in terms of why your product is needed.
For instance, this subtle shift in thinking will move a conversation from focusing on “who” is on a call to “why” they are on a call.
“Most of the time we train our BDRs by using a persona doc, but that often doesn’t account for the “why” they are on the phone today,” says Williams.
“But, think of it this way: this is something that someone bought. This is something someone at the company bought. So, I should be asking myself ‘how was that decision made?’”
When you know how a buying decision was made, you can determine where any changes should be made, if necessary. For example, if you’re selling a $100K deal to a really complicated business, and there was 7 people involved, you may be able to sell more quickly to smaller, less complicated teams.
“If a deal is below that threshold, maybe you can deal with less people and close more. Maybe you can close two deals. If that’s the case, then that’s another huge clue. That might tweak a lever for you and help you move faster,” adds Williams.
Tracking Your Wins
Finally, once you get more and more customers under your belt, you should be routinely examining your wins to make sure you aren’t missing any trends or changes in your client base.
This may sound like a simple extension of the tests you’ve been running since your early days. But Williams says it’s a lesson that’s often forgotten.
“In your early days, I would say you are going to document your buyer’s process – you are going to document that more frequently. But, once you have product market fit and you have 100, even up to 1000 customers, you probably aren’t documenting it that much,” says Williams.
“So, you start doing a once or twice per year closed lost analysis. Why did I lose this deal? I’m saying, though, let’s do a closed-won analysis. You might find that there are differences in your wins over time.”
For more on Williams’ sales process experiments, check out his recent edition of The Predictable Revenue Podcast.