CEO of Novus Laurus† Business and transformation strategist. Investor in digital technology, film and food.
I was most amused when a marketing consultant and ex-colleague took a job with the client and said, “Marketing gets you to Pluto, but the real goal is sales, which takes you all the way through the solar system to the sun.” The idea of a lean repeatable sales cycle already exists in startup land, but it is rarely implemented in startups or in established companies, especially in channel or outsourced sales or through marketing.
Lean repeatable sales cycle
In a nutshell, the idea is to develop a sales process with a known set of steps at a reasonable total cost. The requirement is that this process is repeatable, guarantees a sale at the end, and the steps and costs leave you with a profit margin. This sales process and costs should include everything from lead generation to prospect qualification, to meetings, to negotiation and closing. Every step in this process must be understood for every product or service or sale. If not, the sale is left to chance.
Finding the most suitable leads and not just a list of leads can only be done after identifying in detail who the ideal customer is. Whether by demographics, company size and sophistication or geolocation, the more granular a customer characterization can be made, the most likely set of leads will be obtained.
Despite this, not every lead is ready to buy. Qualification in prospect through research or through dialogue or perhaps through data need to clearly indicate that there is a need, budget and urgency. If not, salespeople will waste time trying to get or close meetings.
Meetings and negotiations should only be attempted after prequalification. Such meetings should only be scheduled with decision-makers and not with anyone who will attend a meeting. Sellers must be armed with both the knowledge of handling objections and the authority to be flexible in closing deals. Without it, the sale is still unlikely to close.
All of the above should be clearly documented so that new salespeople can be trained quickly and sales can be scaled up. This is the stumbling block that must be overcome before any prospect of scaling up sales or any chance of a Series A financing round.
Can’t do without scales
Most companies, large or small, established or starting up, follow two paths. Either they throw marketing dollars into the expectation that the sale will come true, or they hire salespeople who have no idea how to identify and set up a successful repeatable process. As is usually the case, the marketing dollars deliver crappy results or the salesperson is fired after a short tenure. Few companies have the discipline or know-how to commit themselves to succeed in the task of creating a margin-able and reliable sales process. Unfortunately, both startups and established companies are in the dark and can’t scale sales without it.
Two other developments are causing many companies to lose sight of their responsibilities for the sales process: channel sales or outsourced sales and AI sales disruption.
I once had an entrepreneur pitch me for an investment who clearly hadn’t sold much of his product yet, but was confident he could communicate with channel partners and piggyback on their sales process enough to scale his business. He couldn’t tell me clearly who his ideal customer was or how to tell if they were ready to buy his product. He was certainly not clear about the objection handling. I have not invested in his company.
All sellers are looking for easy sales. Whether hired directly by you or as part of a sales channel deal, if the specific salesperson is not trained enough to sell the product easily, they will spin for a while and then just give up. Developing and training them in a sales process that works is the responsibility of the product owner.
AI sales bots
LinkedIn recently discovered that there were a number of AI-based profiles on their systems that mechanically generated leads and sent them to their owners. While this first attempt is kind of clunky, I fully expect the AI sales disruption to come. It’s just that AIs need to be trained on the right data to succeed. Imagine AIs armed with a prospect’s click history, demographics, social media trail, and company data that could provide them with the most appropriate offer, wherever they are, at a time when they were actually looking for a solution, roughly knowing their budget and urgency. Imagine the AI actually negotiating price or terms and then upselling or cross-selling.
I predict this will happen in the next three years and most sales will happen this way. I also predict that Google, Apple or Meta will build or acquire such technology soon. It could mean the death of the horrific amounts spent on CPM and CPC advertising and the end of fake CPC and unwanted marketing messages. And I believe that any marketing organization that isn’t held accountable for actual sales simply won’t survive. In the next 10 years, messages that interrupt us will disappear, as only sales offers based on AI assessment of your willingness to buy will reach you.
A startup’s chances of being funded already rely heavily on being able to demonstrate a margin that delivers a repeatable sales process. All sales scales in all companies depend on such a lean process. Finally, the training and data AIs need to take over the tedious and repetitive sales process is more likely to result from first documenting such a manual process for the specific product or service being sold.
The sooner companies understand and establish efficient sales cycles, the more likely they will succeed and the sooner we will get rid of irrelevant marketing chatter and its unnecessary costs.