Today’s episode is The Strategy vs. Sales Conundrum. By that, I mean that we are going to focus on one of the most difficult problems startups face, sales. By that, I do not mean just closing deals. What I mean is the tension between a company’s stated strategy and closing the right customers at the right time. That is the crux of the problem. This episode is a quick-over of the problem and its solutions.
Only customers buy. That may seem like a tautology, but it is a very pithy rule of selling. A market never buys anything. Closing a sale to a real customer is the “final mandatory step” in connecting any strategy with business development efforts and sales results.
But, for most companies, the de facto strategy is the resulting total of the deals that are closed. The problem, which I have seen in both startups and medium-sized companies, is that few firms clearly define their customer selection criteria. In the case of early-stage startups, even the founders themselves can often find it difficult to stay focused on customers who best fit the strategy amid the struggle to bring in early customers and sales revenue. Medium-sized companies are no different. In fact, this is a perennial problem.
Launch pre-roll
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Hello and welcome to Episode #1 of Mayo615 Technology Partners’ “Insights for Entrepreneurs.” Today’s episode is The Strategy vs. Sales Conundrum. By that I mean that we are going to focus on one of the most difficult problems startups face, sales. By that I do not mean just closing deals. What I mean is the tension between a company’s stated strategy and closing the right customers at the right time. That is the crux of the problem.
Only customers buy. That may seem like a tautology, but it is a very pithy rule of selling. A market never buys anything. Closing a sale to a real customer is the “final mandatory step” in connecting any strategy with business development efforts and sales results.
But, for most companies, the de facto strategy is the resulting total of the deals that are closed. The problem, which I have seen in both startups and medium-sized companies, is that few firms clearly define their customer selection criteria. In the case of early-stage startups, even the founders themselves can often find it difficult to stay focused on customers who best fit the strategy amid the struggle to bring in early customers and sales revenue. Medium-sized companies are no different. In fact, this is a perennial problem.
It is often said that salespeople are “coin-operated.” That is not intended as a criticism, rather as a fact, that management often does not grasp. Consequently, companies will tend to sell to anyone they can, and unfortunately, often at discounted prices. The problem is with the management of business development, not the salespeople. It eventually leads to loss of positioning with customers, and, over time, the nurturing of “commodity competencies.” In other words, the sales process gets better and better at closing sales that customers value less and less.
There is an adage in sales and marketing that goes like this:
“Marketing wants Mr. Right. Sales Wants Mr. Right Now”
No one seems to know who first said this, but it is a very honest and true statement of the tension between the two.
The problem is so common that recently I was asked to conduct a workshop on “strategic business development” I am going to share with you the main topics of my workshop which will give you a quick idea of the key points without drilling down into the details.
First, probably the most important thing to do is to define a “strategic customer profile” and apply it to customer prospects. Assuming that everyone “gets it” is one of the most common mistakes I see. You need to carefully define in detail what your ideal customers look like in order to close them.
Also included in the workshop are other strategic techniques to bootstrap a company’s sales results.
Strategic initiatives, for example, are internal company projects, communicated widely to all employees, and often managed by a professional project manager, that are designed to address internal issues that are critical to success with customers.
Strategic business development is a category of external activity that is distinctly different from sales. Normally, a senior executive will be assigned to target a specific project or projects, that may involve multiple customers and even competitors to bootstrap the company’s brand image and, consequently, its sales success.
The last issue to consider occurs when nothing works. The right customers cannot be found, and no amount of focus on strategic issues is producing results. You may be at a “strategic inflection point.” Something has changed. Obvious examples would include the COVID 19 pandemic. It is necessary to recognize and respond to the changes, and if necessary, make changes or even pivot the company in a new direction.
Companies that adhere to these conceptual strategies have been shown statistically to have a higher probability of survival in a crisis and of long-term success.
Thanks for listening to this first podcast and I hope that you will return next week and join me for Episode #2. Until then, remember that the harder you work, the luckier you will likely be.