Why every start-up needs a repeatable & scalable sales model?

Start-ups in their mid-growth stage are usually faced with an inflection point, where they find themselves standing in the middle of a transition – from having a bright product idea endorsed by a handful of people (usually investors & early customers) towards a scalable solution that can be sold to anyone.

Geoffrey Moore’s work in the book titled ‘Crossing the Chasm’ is pertinent to this transition that exists between early adopters and the early majority of a product in the technology adoption life cycle. Companies having a logical and repeatable sales process, backed by a validated product can succeed in any economic scenario.

Initial sales can help a company in determining whether the product/market fit is in place. The next and the most crucial step towards achieving scalability is to know that their product requires little to no customization to go from 1 to 10 to 10,000 customers quickly. Start-ups need to have a consistent process in place, which is embraced by the whole team to ensure smooth execution. This, in turn will help in having an element of predictability in the decisions and forecasting that the entrepreneur makes. The most essential characteristics of an ideal sales process are scalability, repeatability, and sustainability.

Most start-ups have developed somewhat of an ad-hoc sales process. That is, they have a process that they follow, though there isn’t any documentation for the same. For instance, if in a small sales team, all sales reps are asked about the process that they follow to approach and close a prospective client, one can be sure of coming up with a number of different approaches. At the core of such approaches are processes which are, more often than not, inconsistent with one another’s and sometimes not even in sync with the company’s vision. The key to scaling the sales process is establishing a well-documented and clearly repeatable process which can be adopted by new hires from day one, which makes them as productive as the existing sales team.

Once such a process is put in place, it is easier to establish a predictable, direct relationship between increasing the size of the sales team and targeting more geographies on one hand, and increased revenues on the other.

These are the most natural benefits of having a repeatable sales process in place for any start-up:

Enables closed-loop learning

Ideally, the sales process should begin with leads being generated from the inbound marketing team, and conclude in a closed-loop manner with feedback from the end-user. This setup makes sure that all the stakeholders are involved throughout the process, and also facilitates organization-wide learning and development.

Takes funnel metrics into consideration

It’s important to know the kind of conversion rates one is experiencing at every stage of their sales funnel and what are the various factors that affect these rates. For instance, different lead sources can result into different kinds of conversion rates. This kind of analysis is also useful in determining the most cost effective, or cost ineffective customer acquisition channels and can help in improving the marketing ROI.

Takes into account the Return on Investment

As most start-ups are bootstrapped, Return on Investment (ROI) becomes a significant aspect to watch out for. Only in case the expected value of business over the anticipated duration of a customer’s association with the company is manifold vis-à-vis their initial acquisition cost, is the association economically viable.

For any sales process to be scalable, it’s essential that the marketing function is identified as the primary source for fresh leads and it is well understood within the company that the primary job of a sales person is not to create new opportunities, but to sell and close business where such opportunities already exist.

Guest Post by Mohit Sharma – Lead, Marketing & Business Development function at PromptCloud. PromptCloud is a Bangalore-based firm dealing with Big Data solutions; where an integral part is large-scale web crawling and data extraction. It uses its cloud-based Data-as-a-Service (DaaS) engine for performing big data acquisitions. Views expressed are his personal, and do not necessarily reflect those of his employer

Thinker

Don’t you think new opportunity development by the sales team is a more effective way provided you have a large sales team in different locations already set up?
- Mohit Sharma
  
  There’s no denying the fact that faster sales growth can be achieved by having a larger outbound sales team. But as most startups don’t have the resources for having a large sales team spread across geographies, the marketing function gains prominence.
  
  Inbound marketers can shorten the long-winded process of lead-generation, prospecting and qualifying by providing qualified leads to the sales team. These leads are the people who have formed favorable impressions about the company based on the various touch points such as company blogs, social media, third-party referrals etc. I believe that in the long run, marketing and sales should be equally responsible for achieving higher growth + a good ROI.
Sanjiv Sinha

Good thoughts. I agree with your approach to having a well defined sales process. However, I do believe that in sales/marketing, there is no one-size-fits-all approach. For example, if you have a well-defined, consumer-oriented, low-price-point, high-volume product, the approach to using marketing to generate leads could work. In a high-value, enterprise sale, it most likely will not. You will need your sales people to generate, manage and close those deals. The two sales processes will be very different with marketing playing a different role in both. These are extreme examples, there are clearly shades of grey in between.
- Mohit Sharma
  
  Thanks @sanjiv_sinha:disqus for your thoughts. Indeed, I agree that the sales/marketing function is very subjective and companies must figure out their own strategy to gain a competitive advantage. But I believe what salespeople can barely help you achieve is – customers forming favorable perceptions of your brand. That’s a role marketing can play by augmenting the sales efforts in those high-price point, low volume enterprise products. I think you’ll agree that before any purchase, the decision making unit undergoes these 3 logical steps – Brand awareness (through social media, blogs etc.), Research (using ebooks, whitepapers, industry reports) and Comparison using demos or case studies. What inbound marketing evangelists propose is that such brand elements help the consumer in reaching a decision faster, dramatically reduce the cost of acquisition and instead of companies finding their customers through lead generation, they can attract them towards themselves.
  - Sanjiv Sinha
    
    I have to disagree with you Mohit on this point in the enterprise sales context. Salespeople can be tremendous evangelists for the brand and can create a very positive opinion of it. Marketing, of course, plays a part, but day in and day out, the sales person is the touch point for the customer and hence of their perception of the product. What I am saying, of course, applies mostly to long sales cycle, complex, high value business to business sales. in fact, one particular sale comes to mind where at the end of the sales cycle the key decision maker told me that more than anything else, he and his team were very impressed by the depth of knowledge and responsiveness of our entire team – sales/pre-sales/product development. I believe that any touch point with the customer is an opportunity to create a positive vibe for your company and since the salesperson is the most frequent touch point ergo he/she HAS to be a brand evangelist.