David Gardner is a serial entrepreneur and angel investor based in Cary. He sold ProviderLink to Compuware for $12 million in 2006. Four years later, he sold Peopleclick to a New York private equity firm for $100 million. Among his portfolio of 25 local startups are FilterEasy, Stealz, Validic, ArchiveSocial, FotoSwipe and Fortnight Brewing. He had two exits in 2013: Magnus Health (after it raised a round) and ChannelAdvisor.
Gardner wrote The Startup Hats over Christmas 2013 and expects to publish it. In the meantime, he shares excerpts of each chapter with ExitEvent readers in 13 installments. Here’s part six.
A startup can survive and fix about any problem, but a lack of sales will end a new venture faster than any other adversity. As previously discussed, getting into selling early on is critical because it will enable you to test your message and value propositions while that early revenue can provide the runway you need to fix all of the other problems your venture will encounter. As an entrepreneur, you will be putting on your sales hat many times per day even before you start selling your product. You’ll need it for fund raising, recruiting, managing, and more. Your ability to understand another person’s perspective, effectively communicate your vision, its benefits, and deal with objections to ultimately bring others in line with your thinking is the skill that will make all of your hats fit better.
Salespeople as master communicators
Some entrepreneurs, especially highly technical ones, shy away from wearing the sales hat. For them, the very word “salesman” conjures up images of an ethically-challenged, fast-talking, information-withholding grease ball hovering around a used car lot. It’s as if everyone assumes that a salesman’s job is to get us to do something we don’t want to do or to trick us in some way.
On the contrary, seasoned B2B sales executives are master communicators. They possess deep knowledge of the products and services they represent, industry standards and competitive solutions. They are helpful consultants that take the time to learn their customer’s unique needs and then demonstrate how their offering might meet current business and personal objectives. They ask probing questions and skillfully root out unspoken objections so they can be addressed. They would never lie or mislead a customer because they know that the trust and relationships they establish are critical to their reputation and future success.
The sales hat is honorable and critically important. The greatest discoveries of science would have wasted away in their labs had it not been for those dedicated messengers heralding a better way. Leaving no stone unturned, they are the most tenacious of all of the hat bearers. The sales hat is actually more like a helmet. Those who wear it have strong self esteem that can endure dozens of rejections and dismissive insults each day without even taking a dent.
So what is selling? As a functional definition, I’d say that selling is the art of communicating facts and demonstrating how those facts are pertinent to benefits that are important to your prospect. This may sound simple, but there really are a lot of ways to screw this up. Sometimes we start selling before we know what benefits are important to our prospect or why. Other times we lose credibility by stating opinions and then trying to present them as undisputed facts. Most often I see sales persons firing off fact after fact, but forgetting to make the verbal connection as to why their customer should care, i.e. how those facts enable various benefits. Sometimes we are just selling to the wrong person or there are objections we have not yet discovered and disarmed.
The irony of selling is that it is profoundly simple and simply profound. It is a very simple concept, but because it is usually done extemporaneously while gathering information via a real-time dialogue, it requires you to be able to think on your feet, and modify your message as you go. This can make even a good communicator forget things and make critical mistakes.
The best salespeople state facts, not opinions.
Let’s begin with a simple, but perfect sales combination executed by a table sales person.
This table is made of oak.
Oak is one of the most durable woods used in table making.
Durable wood is what makes tables like this last a very long time.
Notice how the sales person in the above combination begins by stating facts. When selling, you should always avoid stating opinions. A fact is an unarguable truth of which the vast majority of people would agree. A fact can be independently verified through research or proven by experts. Other facts this table sales person could have used might include:
- This table is not painted.
- This table’s joints are glued and double screwed.
- This table is six feet long.
- This table was ranked in the top five in a Consumer Reports® review.
- This table has rounded corners.
Each of these facts can be proven and validated. They are not just personal opinions or subject to interpretation. The trouble with stating opinions is that if your prospect does not agree, then everything you said from that moment on is suspect. Your clients need to trust you. Sticking with the facts and never making an unsupported claim or stating a personal opinion is what gains that trust. It can be OK to state an opinion if the person you are quoting is recognized as an unbiased expert on the subject but all other stated opinions will get you into trouble. For example:
- This table is one of the best on the market today.
- No other table will last you as long as this one will.
- This wood is really strong and durable.
- Tables aren’t made like this anymore.
These are all opinions, not facts. Sale representatives that start spouting off opinions lose credibility quickly with their prospects, but a well-supported fact followed by a well-connected benefits statement is the classic one-two punch combination in sales.
Don’t state facts without stating benefits.
A benefits statement is the communication of a value for the customer, made possible by a stated fact. Combined, this construct is a facts/benefit statement. It is the fundamental building block of all sales. Facts should always be followed by a clearly stated benefit for the prospect. The most common mistake made by those new to sales is that they tend to state facts about their product, but then simply assume that the prospective customer will make a connection to a meaningful benefit. This is a huge assumption and often very wrong. You must never fail to connect each fact you use to a benefit that the customer cares about.
Different customers have different buying motivations, goals, and problems they want to solve. For example, wooden tables do not rust. “Wooden” is the fact. “Rust-free” is one of the benefits. “Unpainted” is a fact which could be tied to the benefit of versatility i.e. the freedom to paint it any color desired. Double screwed and glued legs are facts that could be tied to greater longevity or less maintenance value propositions. “Rounded corners” could be tied to a value propositions such as safer for small children.
Start out by listing all of the facts you can about your product. Now start connecting the possible benefits each of these facts enables that might be important to your targeted customer. Once these are lined up, you can start to practice your facts/benefits statements. It is best to connect your fact to its benefit via a bridge or connector phrase such as, “which means to you”. Other connector phrases are “this is important to you because…” and “this really matters since…” The most important thing about using connectors is that they force you to state a value proposition.
Again, I know this sounds very trivial but I can tell you that not a week goes by that I’m not in a meeting being pitched by an entrepreneur or pitching with an entrepreneur that I don’t hear facts being poured out without a connected stated benefit. Just last week, an entrepreneur kept telling me that his product had connections to various social media. After which, he would pause, smile, and look at me like a doctor who had just found a cure for cancer.
The only problem was that I did not see the connection. I had no clue why his product needed to connect to social media or what benefit this fact made possible. Now, I’m aggressive, so I asked for clarity, but many buyers will not. They especially won’t if they are in a room full of peers and don’t want to appear dumb or uninformed. I’ve made it a habit for many years to ask customers why they chose to buy or not to buy something. When they choose not to buy, the reason given is usually, “I just didn’t get it.” Most often, this is because the presenter did not make clear connections between facts and relevant benefit statements.
Wearing the sales hat means learning to think like your customer, or at least to see things from a customer’s perspective. Successful entrepreneurs eat, sleep and breathe their product or service. They become so immersed in their facts, features and buzz words that these become second nature to them and an intimate part of their vocabulary and thinking. Very quickly they lose the ability to think like a person who is being exposed to all of this for the first time. This is why the discipline of talking in terms of facts/benefit combinations is crucial. I’ve taken many sales training classes over the years and read books on most of the major sales methodologies. They all have their strengths and good techniques, but I assure you that remembering to speak in terms of facts and benefits alone as a beginner will get you further down the field than anything else.
It was reported last year that over half a million people who did not want quarter inch drill bits purchased quarter inch drill bits from Lowes. Why? Because they wanted quarter inch holes! Remember that buyers don’t want your software. They want what your software can do for them. You won’t sell much software talking about your software, but you can sell a lot of your software if you focus on what it can do for your customers, i.e. benefits. From cold call scripts to web pages, wearing the sales hat means learning to think and talk in terms of value propositions.
When selling, listening > talking.
Sounds pretty simple so far, but here’s where it gets a little tricky. All value propositions are not weighted the same by all prospects. If you go on and on about how your product has superior resell value and your prospect is never planning on reselling it, then you are going to come across as irrelevant and out of touch. Talking is the easy part of sales. The hard part is listening. Before you fire off all of those well polished facts/benefits value propositions, you had better make sure that you targeted your missiles correctly. You achieve this by listening first to your perspective customer and by asking probing questions.
Back to the table example, “So why is it that you are looking for a wooden table? Do you have small children? Will they be using the table? How often would you need to seat eight people? What did you like or not like about the table you are replacing?” You don’t have to sell a sophisticated product to be a sophisticated sales person. By asking these questions, you will not only be able to connect your facts to the right benefit statements, you will also start to gain the trust of your prospects who begin to see that you really are concerned about getting them what they need rather than just making your quota. The table example is simplistic. In the real world, many factors come into play from budget to infrastructure to political considerations, but taking the time to really understand your customer’s needs is how you will position yourself as a trusted consultant, rather than a manipulating salesman.
Keep in mind that a single fact can be used to support several different value propositions. Linking a fact to the wrong value proposition is not only unhelpful; it can also actually bring up new objections. I was once training a team of sales people how to sell their instructor-led certified Oracle training classes. At 700 pages, it was by far the most detailed and comprehensive Oracle courseware available at that time. During the live sales demonstrations, I encountered two very different types of prospects. One was concerned that the class would be too difficult and that it would cover too much material for him to keep up. To this prospect, I used the following facts/benefits statement.
Fact: Our Oracle courseware has over 700 pages of material.
Connector: This is important for beginners like you who are new to Oracle because…
Benefit: You will be able to look up anything the instructor covered that you may not have fully understood and review the concepts in detail with examples at your own pace each evening after the class.
The second prospect had the exact opposite objection. He had been using Oracle for almost a year and felt that an introductory class would be too basic for his intermediate skill level. To this prospect, I used the following facts/benefits statement.
Fact: Our Oracle courseware has over 700 pages of material.
Connector: This is important for self-taught engineers like you who may not have had a thorough systematic introduction because
Benefit: with that much material to cover, even an intermediate Oracle administrator is going to be challenged and constantly presented with concepts and techniques that are new.
Notice here how I used the same fact with both prospects but tied that fact to completely different value propositions based on their individual concerns. It would have been impossible to target these specific needs without first asking probing questions and taking the time to understand each prospect’s specific needs. Firing off facts/benefits statements before listening to and understanding your client’s needs and concerns is like a hunter shooting his gun into the darkness and hoping to hit something for dinner. He might succeed, but most often, he or she is just scaring away the game.
It can sometimes be difficult to get clients talking about what they need and why. I always try to have a few good probing questions ready to go. Here are some examples:
Why are you looking for a software product like ours?
How are you currently doing this?
What isn’t working well with you current solution?
Why is that important?
What are your goals here?
Which of those would you say is most important?
And what did you like about that solution?
Who else will be using this product?
What are their concerns?
What does that mean for you personally?
A dominate buying motivation is the main thing a prospect wants to gain or the most important value they seek to achieve through a purchase. Although there is often one predominate pain point, there are usually multiple other buying motivations, especially in B2B software purchases. The art of sales is in identifying and uncovering all of these motivations and concerns.
Parroting is the technique of restating the buying motivations you think you heard back to your prospect. This is important for two reasons. The first is to make sure you got them right. “So what I hear you saying is…correct?” Remember that most people are not good communicators. I’ve repeated back word for word what prospects said to me before only to have them say, “No, that’s not what I said”! Parroting is important because it helps you listen and it insures that your prospects have communicated what they really meant. Once you have prospects acknowledging a list of goals, ask them to prioritize the list as to which motivations/goals are the most important and why.
The second reason for the discipline of parroting is that it communicates to your prospects that you are listening and care about what they said. You are also communicating that you really want to get it right and understand your client’s needs. This technique is critical to establishing trust and a rapport with your prospect. Don’t underestimate how important this is to the sales and relationship building process.
Making a sale means overcoming objections.
Whereas a buying motivation is what the prospects hopes to gain from a purchase, a buying objection is a concern, fear or any reason why a prospect may not want to commit to your product or solution. A seasoned sales person is an expert at rooting out all dominate buying motivations and objections. If you uncover and overcome every objection, then you will make a sale. Sales are most often lost because of undiscovered objections that are never spoken or rooted out. Again, probing questions are key such as “what features do you need that aren’t included in my product?” or “what do you like better about their (a competitor’s) solution?” It’s the objections you don’t know about that will most often cost you the sale.
Objection handling is also a bit of an art. It’s very easy to work yourself into an adversarial role while dealing with an objection. Here’s an example of a sale going south because of botched objection handling.
Client: “Your product is more expensive than other solutions”.
Sales Person: “No it’s not.”
Client: “I know of at least two others that charge less for the same thing.”
Sales Person: “You are mistaken.”
Unfortunately, I’ve witnessed this particular calamity many times and it is like watching a train wreck in slow motion. It’s been said that the only way to win an argument with a customer is to avoid it, but how do you tell a prospect or client that he or she is mistaken without starting an argument? Even if you prove that you are right, you will have most likely offended the prospect who now no longer wants to buy from you, i.e. won the battle, but lost the war.
When a client challenges something you’ve said, or you hear an objection in general, a flashing red alarm should go off in your heard as if a bomb has just been armed! If fact, it has and you must first disarm the bomb before you can proceed. When a client states an objection or contradicts a statement you have said, there is only one way to deal with it effectively and that is to disarm the bomb. Here’s how you do it.
First, you have to agree with something the client said or at least affirm the client’s right to feel or think that way. This disarms the bomb and gives you an opportunity to gently make your counter statement. This technique is best learned by example.
Client: “Your product is more expensive than other solutions”. [Objection]
Sales Person: “It certainly can appear that way. [Agree/Disarm]
Sales Person: “In fact, a lot our my best customers said the exact same thing before they added up all of the extra modules they’d need to buy in order to get the same functionality included in our base product” [Counter]
Client: “There’s no way my team would do all of these steps”. [Objection]
Sales Person: “Our best practice does appear to add more steps initially. [Agree/Disarm]
Sales Person: “That’s why we include an extensive training program to insure that your team realizes how a little extra work on the front-end will save hours of extra work later on.” [Counter]
Other good disarming phrases that have served me well:
“I certainly understand how you might feel that way…”
“It does appear that way at first…”
“Some of my best customers have said the same thing before…”
“Yes, you are correct that in some cases…”
“There is an issue like that at first…”
“You are correct. That can be a problem. That’s why we…”
You get the gist of this. A gracious disarming counter shows respect for your prospect’s feelings and that you have the maturity and discipline to stay focused on your goal. You will discover that you tend to hear the same objections over and over again, so make sure that you create an objection-handling document with your best disarming responses and counters. Require your sales team to memorize this document and test each one of them via role-playing. Involve your sales team in this process by asking them each week if they have heard any new objections that should be discussed and added to the document.
Remember that knowing facts about your product and potential benefits is just the foundation of your sales process. You’ve still got to find the right decision maker(s), determine dominate buying motivations, ask probing questions, establish trust, and root out, disarm, and counter objections effectively.