Sales: from contacts to contracts

The process of identifying potentially interested parties and encouraging them to buy your product or service is called "The Sales Process". Controlling it is crucial for any starting business.

Common terms in the sales world are:

• Suspect: someone who you suspect might be interested in your product or service.

• Prospect: someone you will visit.

• Lead: someone has expressed interest in what you have to offer during a conversation or in an information request.

• Qualified lead: you’ve managed to determine that the need for your product or service is real, in the short term, and that your potential customer has the budget to purchase your product or service.

• Demo: you demonstrate what you offer.

• Quote: you make an offer based on the needs of your potential customer.

• Close: you ask for and receive a signed order.

  
  

During every phase of the sales process it is important to know who is involved in the decision to purchase. Who is recommending? Who has influence? Who decides? If you are able to persuade 70 to 80 percent of these key people then they will usually place an order.

Every product or service has its own "sales cycle". This is the time between creating a lead and signing the order. The bigger the investment, the longer this cycle takes. Do not let this discourage you. A period of six months is not that unusual.

Moreover, sales itself is a continuous process. You constantly need a sufficient number of potential customers in every phase of the sales process. Logically only a few of these candidates will go through the entire cycle. This is called the "sales funnel": wide at the beginning, narrow at the end.

It is important to have one person in your company who is ultimately responsible for the sales funnel. It is generally someone from the start-up team. That does not mean that this person will concentrate exclusively on sales, but that ultimately he is the only one in charge.

To build a sales funnel you need to identify the important steps in your sales process. If a demonstration is needed, it will become the topic of your sales funnel. The number of demonstrations given per month will give you an idea of the number of orders to come. Based on the number of offers made per month you can make a prediction about the number of orders per month.

A typical funnel's structure is as follows:

• Number of new prospects per month.

• Number of new qualified leads per month.

• Number of visitors per month.

• Number of demonstrations per month.

• Number of offers per month.

• Number of order forms per month.

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Collect this information monthly and you have your sales funnel. It is an import­ ant indicator for companies. If at some stage there appears to be a reduction of these activities, you know that the orders will decline if you do not take action. So keep feeding the sales funnel.

If the number of demonstrations falls to zero in the months of June, July and August, then you know that there will be few or no orders at all in September, October and November. It is therefore important to maintain a good funnel function across the entire sales funnel, without discontinuities.

As your company grows you may recruit sales staff at some stage. Take no risks. A good salesperson understands the technology, can empathise with the problems of the customer, is commercially oriented and can close a deal. He will soon turn out to be indispensable and should be given a competitive salary. Saving on sales never is a good idea. "Sales" is the engine of any business. A good salesperson therefore is a good investment from which you will reap rewards for years.

“Finding the right salespeople for your tech startup is a challenge. It’s easy to misjudge - what works in a big company doesn’t always work for a small one. But when you get it right, everything clicks into place.” Wim Claes, co-founder and Chief Business Development Officer of ICsence

"Selling is simple, not easy". The sales process looks easy. Either the outcome is positive (the deal is on) or negative (the deal is off). The complexity of sales should not to be underestimated. Salespeople are generally well paid and enjoy a range of benefits.

Five reasons which justify a competitive salary for salespeople:

• A good salesperson is rare.

• A salesperson must have different competences (knowledge of the technology, commercially oriented, persuasive, willing to travel, not afraid of traffic jams, ... ).

• Sales are a crucial link in the company. Even though you have a good product or service your company will still go bankrupt without good sales staff.

• Sales are psychologically stressful. For each yes you get nine no's. Not everybody can cope with this. A good salesperson is not easily discouraged and after every disappointment he or she will be out there again persistently selling your product or service.

• The results of a salesperson are explicitly quantifiable.

When recruiting a salesperson we recommend that part of the compensation package is variable. Typically a variable compensation of about thirty percent is paid, on top of the fixed basic salary on condition that the salesperson achieves his or her objectives. Good salespeople will also sell themselves during a job interview so stay alert! As with any job interview it is recommended that you check their performance with former employers.

If the objectives are not met, then dismiss the employee. Otherwise he or she becomes a threat to the survival of the entire company. During the start-up phase we recommend controlling the sales process and the financial process yourself.

We even recommend that you choose your company name as a function of the availability of domain names, i.e. .com or .eu.

We strongly advise against sports sponsorship. This only has results if combined with the development of a brand name. As we have already explained you need a major budget for this. Another possibility is combining sports sponsorship with "relationship marketing". This includes inviting customers and prospects for a VIP treatment during a sports event. This method of marketing communication once again is not feasible for a small company. The same can be said of advertisement. Ads never deliver the expected result for young high-tech companies.

A form of marketing that does pay off is communication through the trade press. Send your story to journalists and editors, always starting from the problem of a possible customer and building up to your solution. Journalists have to fill more columns every day and they will be delighted to edit your press release if indeed it is newsworthy.

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