The Entrepreneurial Selling Process

Bill Collins

04/19/23 Bill Collins EFP Caltech 1

Selling Process Phases

Phase I – “Education Phase” Set your success pattern

“Invent” your customer Establish “Lead” customers

Phase II – Volume Sales Repeat your success pattern

“Mass produce” your customer Establish predictable sales funnel

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Selling Process Phases

Phase I – “Education Phase” Set your success pattern

“Invent” your customer Establish “Lead” customers

Phase II – Volume Sales Repeat your success pattern

“Mass produce” your customer Establish predictable sales funnel

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Quiz: Why do Fish School?

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Adoption Challenge

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Potential Customers

You

You are faced with a host of valid initial customers – how do you proceed?

CN Rail

PGE

Xcel Energy

Duke EnergyTexaco

Chevron

Exxon

Verizon

Sprint

BNSF

Union Pacific

AT&T

GeoDigital

Phase I Overview

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Education

Potential Customers

You

In Phase I, you pick out a few reference-able customers of the same type to win

•Education intensive – both directions

•Make “alterations” to fit

•Allows “characterization” of sale

Phase I Overview

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Education

Potential Customers

In Phase I, you pick out a few reference-able customers of the same type to win

•Education intensive – both directions

•Make “alterations” to fit

•Allows “characterization” of sale

PGEXcel Energy

Duke Energy

GeoDigital

Portfolio ExamplesCompany Solution Mkt Options Choice/Lead Cust

GeoDigital 3D Laser Mapping

Utility, pipeline, telecom, roads

Utility/PGE, Xcel, Duke Energy, SoCo

iRise Int’net SW Finance, Health, Retail, Gov’t

Finance/Schwab, VISA, First Am Title, Wells

Case Stack Outs Logist Consumer Pkg, Food, Furniture, Electronics

Consumer pkg goods/Lea & Perrins, Hansens, Celestial

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Phase II Overview

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Education

Recognition

In Phase II, you the leverage lead customers to help similar ones recognize the value, rapidly adopt

•Establish repeatable process

•Make revenue predictable

PacificorpPSE

Arizona PS

BPA

WAPA

Momentum

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Education

Recognition

Additional types then require less education and have faster recognition based on initial success

AT&T CN Rail

Alternate Approach

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Education….

Recognition

Addressing multiple types at the beginning

•May feel faster, but is actually slower

•Education spread too thin

•Longer for specific types to recognize

•Recognition still tends to be by one type at a time

Education….

Process Benefits Phase I enables market recognition

Enable market analysts to position you Enable target company interest in you Enable funding community to put a value on you

Phase II enables predictability Financial risk reduced

Return on assets can be projected Operational investments scale an established model

Solidify your value to funding community, acquirers Equity, debt, purchase

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When Should I Start Selling My Solution and Who Should

Sell It?

The Short Answers….. Now and You!

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Lead Customer Pre-Requisites1. Reference-ability to rest of target market2. Location allowing intensive interaction3. Looking for competitive advantage4. Have both pain that can’t be solved by

others and a specific compelling project or event necessitating solution

5. Sponsorship from customer manager(s) that control priorities and budgets

6. Willingness to engage a start-up company (this is by definition a small percentage)

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Ways To Reach Initial Customer

Most success comes through relationships

In order of effectiveness……1. Customer helps found company/is early investor2. Founder/CEO/CXO has relationship already3. Engage established partner(s) with privileged access4. Engage established sales person with privileged

access5. Leverage referral from close mutual associate6. Leverage referral from distant mutual associate7. Cold call

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When is Phase I Complete?

When you have a credible answer to:

“What have you done successfully for someone just like me?”

Complete ~ 5 sales. Make ~ 5 installations, demonstrate value. Know why they bought it. Get at least 2 to be references for value. Be ready to deliver in production form.

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Phase II Establish, characterize sales funnel

Stages of sale, Cycle-time, Attrition, Resources required, Selling costs

Use funnel to establish revenue plan Assign quota by resource building blocks Assume productivity & price changes, lead-times

Measure and drive key metrics Tailored to your business

Get a professional to run this Different from a Phase I activity

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Funnel Definitions

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Item DefinitionSuspect All possible customers who could use solution

Target/Prospect Actively addressing to find potential pain, project & fit

Lead Established, identified potential project & fit, working to identify opportunity: intent to buy, budget, decision maker, timing, competition

Qualified Lead Opportunity confirmed, working to get invitation to present solution to decision maker

Present Presentation made, working to get an invitation to formally quote/propose

Propose Formal quote/proposal submitted, working to close

Close You’ve got the business!

Example Funnel/Pipeline

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Targ

et/P

rosp

ect

Lea

d

Qua

lified

Lea

d

Pr

esen

t

Pro

pose

Close

100

4 weeks

25 15 10

4

Susp

ects

50

4 weeks

2 weeks 3 weeks

2 weeks 13 weeks total

Example MetricsChoose the ones most important to your

situation, such as: Number of opportunities in each stage Hot list of accounts at proposal stage Close ratio Time to qualify leads Performance to quota Actual ASP of deals closed

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Channels

“Channels are NOT customers, they help you reach your customer”

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Why Are There Channels?

“Channels enable quality sales time with the customer”

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Channel Comparison

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CHANNEL REACH REQUIRED

CAN SUPPORT FIXED COST

EDUCATION NEEDED

BEST FIT

Direct Sales:

Push L H HBig ticket items, heavy support, concentrated base

VAR’s: Push L L HMid-sized sales, heavy support, concentrated base

Agents/reps:Push M L M

Mid-sized sales, heavy support, mid-dispersed base

Distributors / brokers:Push M L M

Mid/small sales, mid-support, dispersed base

Telesales: Push M M L

Small-sized sales, light support, dispersed base

Consumer retail / dealer: Pull

H L LSmall-sized sales, light support, dispersed base

TV / mail: Pull H H LSmall-sized sales, no support, dispersed base

Internet: Pull H L LSmall-sized sales, light/no support, dispersed base, for customers who target you

Using Multiple Channels# O

f Cu

stom

ers

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Gp A

Customer Group C

Group B

Ch C

Ch B

Channel A

$ P

er C

ust

omer

You will typically end up using multiple channels “One size” usually does not fit all

Sales Plan “Building Blocks”

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Quotas Q1 Q2 Q3 Q4 Y1 Y2

Channel 1 Units 2 2 4 4 12 20

Price $200K $200K $300K $300K $275K $300K

Ch. 1 Revenue $400K $400K $1.2M $1.2M $2.9M $6M

Ch. 2 Units 4 4 6 6 20 40

Price $150K $150K $200K $200K $175K $200K

Ch. 2 Revenue $600K $600K $1.2M $1.2M $3.6M $8M

Total $ Revenue $1M $1M $2.4M $2.4M $6M $14M

Attracting & Motivating Sales Forces

Great salespeople / channel companies are looking for two things: A great solution to sale High variable compensation

Sales people / channel companies are highly motivated by contests

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Top Sales People

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SalesmanAct.jpg

Hiring Top Sales People Top Sales people have common traits:

Have professional & personal relationships with your specific target customers

Each market has a “club” – they are in the club Consistent high achievers to quota

Consistently number one or close to it Consistently highly paid

Hire these people - pay a premium if required Particularly for your early sales team They are well worth the money!!

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Summary The two-phase selling process drives a

successful business Set the pattern, repeat the pattern It all starts by choosing similar customers

The key factors are education & recognition Phase I enables recognition, Phase II predictability

Phase II is for “mass producing” customers Top Sales people:

Want superior solution, high variable comp Know your customers, have the track record Pay them the money – they’re worth it!

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Q&A

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Exercise

Elevator Pitch