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Why Taking Risks In The Sales Process Can Improve Results

Why Taking Risks In The Sales Process Can Improve Results

Many people are too cautious in sales processes and as a result, when they present their solutions they end up sounding milquetoast and undifferentiated from anybody else in the market. In this post, I advocate taking a harder stand on where your product or solution differentiates in the market — even if it means you lose some deals as a result.

Why Buy Anything?

The first question is about qualifying your potential customers aka leads. Many sales organisations or inexperienced startup CEOs spend their time with leads who either aren’t a good fit for their solution, aren’t decisions makers in their organisation or don’t have a budget and therefore they aren’t likely to buy. I call these NINAs (no influence, no authority).

Inexperienced CEOs do this because often NINAs will give you lots time even if they don’t plan to buy — I guess you could call them window shoppers. And it’s easy to fool yourself into thinking you have a buyer when they spend lots of time with you and it’s certainly easier to be with people who seemingly want to spend time with you, but it takes away valuable time from people with real credit cards in their pockets.

That’s why anybody with real sales experience will tell you the three cardinal rules of sales, “qualify, qualify and qualify” your leads. I boil this process down to “Why Buy Anything?” meaning finding out whether your lead has a known problem that you can solve and are you talking with a real buyer who has budget.

When I counsel startup entrepreneurs I give them my blunt dose of reality, “If you can’t easily identify target leads who have a problem you can solve then hang up your cleats — you’re not going to succeed.”

“Why Buy Anything” is by far the easiest stage of selling.

Why Buy Me?

Once you have found a “lead with a need” and a buyer with authority and budget — the real sales process begins. People new to sales make the mistake of assuming that just because you have a buyer talking with you or even somebody who clearly wants to do business with you that it means you’ll get an order. This couldn’t be further from the truth.

The first thing you need to realise is that you’re likely not alone. Once a buyer decides they want to make a purchase the first thing most companies will do is check out what other options are out there to make sure they’re not making an uninformed decision. I’ll put it in simple terms for non-salespeople.

If you decide you want to buy a Toyota and you know the model, you’re very unlikely to spend $40,000 without double checking that at least Honda doesn’t have a better model. You might look at higher quality / higher price solutions like BMW or Mercedes or you try to see if you can find a bargain with the similar features like a Kia.

Either way, it’s natural that buyers “shop around” so expect it as a healthy part of the process. And also to stick to the analogy if a man or a woman comes into your store to buy your BMW 5-Series don’t assume that he doesn’t have a husband or wife that is more practical and is pushing behind the scenes for the less expensive Audi A6.

Take nothing for granted. Assume competition and assume within the buying organisation you have enemies. Make sure you stand out. It requires that you be unique and stand for something. In sales we often call these USPs.

Often if you’re pushing hard on USPs you’ll find that these won’t resonate with certain leads and therefore it feels easier to stay within your comfort zone and avoid taking a hard stand on why somebody should buy your product. This is often a mistake because if you’re undifferentiated you’ll likely lose more deals because the buyer doesn’t see anything that sets you apart.

I built my first software company in the early days of SaaS and there were few models to go by. One thing I observed was that many customers wanted an “on premise” version of our software and were willing to pay extra money for it. This was a dilemma because while it seemed like easy money and a reasonable request I knew it was going to drive up our support and maintenance costs and become hard to manage. It is the opposite of what SaaS is supposed to be.

So, we took a stand. We said to customers, “We only sell SaaS and we think that’s the right solution for you. In the long run, it will be cheaper, better maintained and even more secure.” There is no doubt in my mind we lost some customers this way but if they were only ever going to buy on-prem software then I’d rather know early.

We learned the obvious objections we’d encounter and we’d teach our teams how to respond to them. I call this arming & aiming and it’s critical in building a sales organization. We knew that all buyers would be concerned about security, privacy, back-ups, data protection and so forth. So our pitch went

“Listen. If we did give you an on-premise solution — where would you put your servers? Oh! In a hosting facility? Us, too. It’s probably the same one we’d use since we are stored in the top-of-the-line facility in London.

Who will manage yours? Oh! You’re IT department. How responsive are they to your needs now? Do they carry pagers and respond to outages 24/7/365? Because we have an entire tech-ops team whose sole job is to support our up time.

You see — running a SaaS platform for customers like you is the ONLY thing our team does. If for any reason any of our customers couldn’t access our solution for long periods of time or if we betrayed security we wouldn’t be able to stay in business.

We’re hosted in the same type of facility as you but my bet is that you’ll get better responsiveness from us than your IT department because we depend on our customers for our existence. If you want that kind of service focus I think we’d be a better fit than your internal IT department.”

You see, we knew that many of our customers wanted a SaaS solution specifically because they were tired of the unresponsiveness of their internal provider. If the business unit had enough power and budget we’d usually win that debate and if the IT department had a lot of power we were never going to win that sale anyways. It would be like turkeys voting for Thanksgiving.

Some of our competitors offered on-premise solutions and that was ok. We weren’t going to win every deal but I knew when I found a buyer with a shared value system my harder stance on SaaS was going to win me business and my attack on competitors who offered it was to point out to my buyers how much time, money & staff they were going to have to dedicate to helping all of their on-premise implementations.

Let me give you another simple example from my experience as a VC at Upfront Ventures. When we went to raise funds we faced lots of competition as there are of course many other VC funds in the country. We are a mostly A round shop, have been around for 20 years and have a long track record including one fund that is the single best performing fund in the United States for its vintage year. There are probably 30 or so funds in the US that have similar backgrounds so while we feel great about our track record, our team and our performance but it’s hardly enough to say why you MUST invest in Upfront.

I think that’s where many startups and even VC funds go wrong. You FEEL unique but when you meet your ultimate fund-raising customers (investors) the law of large numbers means that they’ve seen a bunch of companies saying nearly identical things as you are.

VCs all say:

  • We are entrepreneur friendly.
  • We are hands on.
  • We have a great screening process.
  • We have strong theses in key technology areas.
  • We work with other top-tier VCs.

And so on. Everybody likes to feel unique but most of the things VCs tell themselves are just table stakes in our business and most of the things that entrepreneurs tell us in their fund-raising processes also sound like every other startup.

You need to be different.

For Upfront, the fact that we’re based in LA is unique in that there are only a handful of firms here and it happens to be the third-largest tech startup market in the country and the fastest growing. There was a meme that started going around LPs around 2005 that “I’m not sure LA is really its own venture market” and some LPs actually believed that. They either convinced themselves that no big tech companies would ever be built in LA or that LA-based investors wouldn’t have strong enough returns or that “Our strategy is to invest in the top ten firms in Silicon Valley.” (effectively, a “nobody ever got fired for buying IBM” sort of argument).

My job was to identify people who had this view and if it wasn’t changeable then I didn’t want to waste time in this fund-raising cycle on them. I’d put a note down against their name reminding me of this view they had and then between fund-raising cycles, I’d include them on data that we had showing LAs continued development and growth (including Snapchat, Tinder, Maker Studios, Riot Games and others).

This is true for startups too. You must know when to sell to leads and when to market to them. Spending cycles selling to the unconvinced is wasted effort vs. finding aligned buyers.

It’s true that Upfront is a national firm and our biggest successes over the years have come from Chicago, Baltimore, Las Vegas, NYC, London and LA as well as from Silicon Valley. But you can’t escape the fact that we’re a large fish in an attractive non-Silicon-Valley market and pretending otherwise would be naïve. So we did the opposite and leaned into it – adopting the “Why Buy Me” strategy of seeking people out who either understood the power of LA or were persuadable.

I even adopted a line early on in our discussions to qualify for this: “Listen. We do a lot of deals in San Francisco. And we have national deals in New York, DC and Chicago. We even do some international deals in London or Finland. But we do 50% of our deals in Southern California from San Diego to Santa Barbara and we think that’s part of what makes us special.

If you’re looking for the 81st firm on Sand Hill Road we’re not that. And we’re not trying to compete directly with that. We’d rather partner with those firms.”

Boom. It’s out there. I can’t hide from it now. We’ve staked out a unique position that some will agree with and others won’t. But here’s the thing. If I talk to 10 potential investors and 5 disqualify themselves because they “don’t really believe in LA” but 2–3 lean in because “We already have 12 managers in Silicon Valley. We’re looking for differentiated exposure” now I know that I have found people who have passed the Why Buy Anything and Why Buy Me criteria and I’d rather spend a lot more time on 2–3 qualified leads than spread my time across the other 7 unlikely buyers.


So this is the mistake as I could boil it down for you. Inexperienced sellers spread their bets across too many potential leads of which many aren’t likely (probabilistically) to purchase. Since selling takes time, effort, and focus — figuring out who wants or needs your unique product offering is what increases your win ratios and thus your top-line revenue.

Take a few more chances in the sales process by developing sales & marketing materials that are more differentiated. Don’t be afraid of a “firm no” because if you get it quickly it’s a blessing — a “no” was likely going to come eventually anyway and it’s better than a “muddy maybe.”

If the easy part of qualify, qualify, qualify is figuring out whether there’s a need, a buyer and a budget — the more difficult but more valuable part is figuring out whether the buyer wants what you uniquely sell. Your USP.

Take chances. Be unique.

[This post by Mark Suster first appeared here and has been reproduced with permission.]