January 2012

SALES BASIC TRAINING

BOOT CAMPCopy of the Slide Deck:contact the VMS Office vms@MIT.EDU

Sales Bootcamp Objectives

» Provide MIT entrepreneurs with “block and tackle” education in sales fundamentals

Basic concepts, mechanics, vocabulary, tips, tricks and traps, etc.Practical “how to” knowledge you can put into practice – not theoryHow to land your first few customers

» Incorporate “Sales Thinking” into your company cultureSales conversant = increased likelihood of initial customer salesAcquire customers and revenue — everything else a distant 3rd

» Provide a solid foundation from which MIT entrepreneurs can work with experienced sales people

VMS Sales Boot Camp

» 25 years software start-ups: marketing, sales and CEO roles

» Started, financed and sold three software companies in Boston — advised on the sale of over a dozen software companies

» Expertise in exchanging products, services, stock, companies for a check

» Co-founding member W3C Technical Advisory Board (MIT 1994), past Director X Consortium and OASIS

» Currently Managing Partner, PCA» MIT VMS Mentor (2002)

» 25 years: professional sales» Started sales career with Eastman

Kodak (10 years)» VP Sales, Parametric Technology

Corporation (PTC), managed 100+ sales reps and technical personnel, with $80+ million in annual sales

» Last ten years: start-up sales VP at Formation Systems, Emptoris, Open Ratings, CIMTEK

» Currently VP Global Sales with AppZer

» MIT VMS Mentor (2011)

VMS Sales Boot Camp

Sales Boot Camp Speakers

Kent Summers Jim Noschese

Something to Keep in Mind…

VMS Sales Boot Camp

“When a new company starts closingsales, all the other myriad start-up

issues seem manageable.”

“When sales are not happening, all the other start-up issues

really don’t matter.”

Sales Boot Camp Agenda

VMS Sales Boot Camp

» The Sales Toolkit» Customer Profiling» The Sales Funnel» How to Qualify

Customers» How to Work the

Pipeline

SalesMechanics

» Marketing vs. Sales» The Sales Role» Hunting vs. Farming» Direct vs. Channel

Sales

Basic SalesConcepts

» Who are your Buyers?

» Why People Buy» How People Buy» Selling to the US

Gov’t and DoD» Personalities You

Will Run Into» Closing Tips, Traps,

and Techniques

ClosingDeals

» Sales Rep Characteristics

» Building a Sales Culture

SalesOrganization

Basic Sales Concepts

VMS Sales Boot Camp

Hunting vs. Farming

Marketing vs. Sales

Direct vs. Channel Sales

The Sales Function

Marketing vs. Sales Functions

» The Marketing role — pre-sales “demand generation”Tools: messaging, collateral, whitepapers, PPTs, …Events: seminars, webinars, tradeshows …Leads: lists, outbound campaigns, website (SEO and PPC) …Air cover for Sales: advertising, PR, analysts, blogs …

» The Sales role — acquire new customersLeverage marketing resources to: manage the pipeline, orchestrate team resources, close deals and generate revenue

» Continuous Marketing and Sales collaboration is keySales knowledge of customer needs/issues MUST drive rapid changes to Marketing material (E.g. positioning, value prop, pricing, etc.)

» With start-ups, the same person often wears both hats

VMS Sales Boot Camp

The Sales Function

» Direct Sales = a contact sportDevelop customers thru a series of pre-defined actions/stepsDemands knowledge, people skills, organization and integrityRequires a “stand up and dust yourself off” mentality

» Manage new customer engagement activitiesQualify Educate Build Confidence/Trust Gain Commitment

» Orchestrate external and internal needsCapture, communicate and coordinateActive team participation and contribution is key to sales successSales activity/issues must be 100% transparent to the team

» Generate RevenueDirectly accountable for revenue performance and forecasting

VMS Sales Boot Camp

The Sales Function

» Early-stage SellingDe-bug the offering + De-bug the sales process +De-bug people’s objections to spending money

» Bring market intelligence back to the teamKey enhancements, differentiators, weaknesses, gaps — anything that impedes customer adoptionThe process of eliminating all the impediments to early-stage sales occurs incrementallySales-Marketing adjustments must occur in real-time

» Manage internal and external expectationsInternal: sales take twice as long, one-half the return (on a good day)External: offering capabilities/maturity road-map (reality + vision)Recognize (and be true to) what you don’t know/don’t have

VMS Sales Boot Camp

The Sales Function

» #1 start-up goal: secure your “anchor, reference customer”Good fit + recognizable to your target marketNurture/over-service first (few) customers, so they realize the value of your offering and are fully referenceableNo-cost Beta programs can be very effective at pulling in the first few customers — define your quid pro quo

» Sales Economics: revenue – (cost-of-sales) = profit marginAlign cost-of-sales with offering price point — it is quite possible to generate good revenue, and still go out of business!Does your price-point support direct sales? Indirect sales? Web sales?Direct Sales is your most expensive investment, in terms of both real costs and opportunity costs

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CredibilityAnchor ID

Hunting vs. Farming

» Hunting: acquiring new customersBear hunting, deer hunting, hunting for pheasant, etc.The larger the animal… the bigger the gun … the longer the sales cycle … the higher the risk/rewardYou can fill up the company dinner pot with enough pheasant!Equal opportunity hunting — good for cash flow

» Farming: selling into your existing customer baseUp-selling and cross-selling (next slide)

» Once customers are established, important to balance sales focus between hunting and farming

» All start-ups are hunters!

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Lone Sales

» Sales finds the lead» Sales closes the deal» Sales manages / oversees

delivery / implementation» Sales supports the customer

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Hunter Support

Cashflow

Team Sales

» Marketing finds the lead» Sales closes the deal» Engineering delivers and

implements» Services support the

customer

Cashflow

Farming: Up-selling and Cross-selling

» Existing customers are your best buyersConfidence and trust already establishedYou are already in their accounts payables system!

» Up-sellingFollowing an initial sale, selling complementary offerings to the same buyer e.g. additional licenses, new modules, value-add servicesKey to up-selling: What is the minimum capabilities you can package to get “Yes” on the initial deal — but still leave room for upselling?

» Cross-sellingSelling the same offering to a different buyer in the same organization aka “going sideways”Key to cross-selling: Is your value-prop well established? What is your internal referral incentive?

VMS Sales Boot Camp

Direct vs. Channel Sales

» Channel Sales: securing partners to sell your offering

» Extends your sales reach without expensive sales “feet on the street”

» Channels work well after direct sales is established, with the proper fit, and when the appropriate support and incentives are in place

VMS Sales Boot Camp

Why Channels vs. Direct Sales?

» Does your offering support a direct sales model?What do your margins look like after $200-250K in sales compensation?What do margins look like after giving 50% of the sale to a partner?

» If your business can support a direct sales model, it can support a channel model too

The reverse is not always true

» Partners can add instant credibility to your Start-upIf it’s good enough for <Big Name Here>, it must be safe for me

» Gives the Customer a bigger neck to throttle» Expand addressable market without adding to headcount» Channel sales best pursued after direct sales and the ‘recipe to

revenue’ is established

VMS Sales Boot Camp

Are Channel Sales Viable for a Start-up?

» Are there 3rd-party products/services that provide a natural fit with your offering?

Ideally, a partner that lends a great deal of credibility to your start-up?

» Does your product/service fill an important gap in a 3rd-party offering?

More for partner to sell, fills a me-too or competitive differentiator, …?

» Are there market opportunities outside your company focus, reach and/or expertise?

Vertical markets, a different buyer profile, different geography, …

» Most effective way to secure channel sales partnersPut a paying customer in their lap!

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Direct Sales Mechanics

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The Sales Toolkit The Sales FunnelCustomer Profiling

The Sales Toolkit

» Marketing CollateralBrochures, whitepapers, competitive matrix, ROI calculator, …

» Laptop, demo/prototype, cell phone, breath mints» CRM application (tool to manage the pipeline)

Salesforce, Act!, Goldmine, SugarCRM, Excel spreadsheet!

» GoToMeeting account» Internet resources

Google, LinkedIn, Zoominfo, Jigsaw, Facebook, Yahoo Financials, …

VMS Sales Boot Camp

The Sales Toolkit

» Sales communication templates = consistency + efficiencyEmails: introductory, meetings, demos, etc.Objection handlers: standard responses to common concernsAgreement templates: boilerplate + customer-specific

» Keep communication brief and to the point» Leads: Lists

Event attendees, professional org members, etc.

» Leads: Website SEO and PPCThe nature of Inbound vs. Outbound leads

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Target Customer Profiling

» All new companies need to start somewhereKnowing what “somewhere” is matters a great dealGet focused — avoid boil the ocean strategies, ID your beachhead

» Establish your target “customer profile” — a narrowly-defined vertical market + geography + company type

E.g. Research labs, with 50+ staff, at Universities with significant R&D budgets, within 25 miles of Boston

» Establish your target “buyer profile” — a job title + responsibilities + needs/concerns

E.g. Professor or Principal Investigator, with a need to collaborate with other labs, and/or has been burned (or has a concern) with lab personnel turnover and knowledge retention

VMS Sales Boot Camp

Target Customer Profiling

» “Fail Fast” is most effective for start-ups“Aim, Fire, Correct” works better than “Ready, Ready, Ready, Aim, Fire”

» Trust your instincts, but verify with resultsKey sales responsibility: challenge the offering based upon feedback from the marketplace, and drive change!

» Whiteboards can’t talkYou will learn far more from people’s reactions than you will from internal strategy sessions

» Don’t muddy the watersStart with small targets, or existing trusted relationships if availableSave your best opportunities until after you have de-bugged your offering and approach

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The Sales Funnel aka “The Pipeline”

Triage / Attriti

on

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Sales Cycle

Leads Suspects Prospects Opportunities Customers

Develop & CloseEngageQualify

Working the Pipeline

» Discrete, sequential, named steps of your sales process» Helps you organize, focus and balance your sales activity

VMS Sales Boot Camp

Customers

Opportunities thathave signed on thedotted line

Leads

Pure ContactsCompany + Title,Email & Phone

Suspects

Filtered Leadsthat fit your targetcustomer profilee.g. geog., marketsegment, companysize, etc.

What is your target profile?

Opportunities

Prospects who areactively engagedin your salesprocess

What is your criteriathat separates realopportunities vs.a confirmed needthat is likely to gonowhere?

Prospects

Qualified SuspectsInitial contact confirms need

Does the basichigh-level buyercriteria exist?

Working the Pipeline

» Define gating criteria (go – no-go) for each step in the funnelTerms matter (name it and frame it!) — your company lingua francaPipelines are always company-specific, and “fine tuned” over time

» A tool for sales time and priority managementMove ‘em along, or move ‘em out!Determine where best to spend your timeHelps make best use of everyone else’s time and priorities

» Communicate pipeline to the rest of the teamSales is a “need to know” function… everyone needs to know!All hands pipeline meeting at least once/week

» Weighted pipeline: the basis for revenue forecasting

VMS Sales Boot Camp

Weighted Pipeline: A Revenue Forecasting Tool

» The difference between potential value and current value

» Weight distribution varies, depending upon the product or service being sold, the customer … other factors

» Think thru the stages, arrive at a model that is practical and useful to you, and validate!

VMS Sales Boot Camp

Sales Stage Weight Current Value

Lead 0 $0

Qualified 5% $500.-

Need 25% $2,500.-

Budget 50% $5,000.-

Buyer/timing 75% $7,500.-

Proposal 90% $9,000

Payment 100% $10,000

Sample Weighted Pipeline: $10K Offering

VMS Sales Boot Camp

MeetsProfile

InterestExpressed

Need is Validated

BudgetValidated

Buyer(s)ID’d

SentProposal

WeightedValue

Company A $7,500.-

Company B $9,000.-

Company C $2,500.-

Company D $5,000.-

Company E $1,500.-

Company F $5,000.-

Potential Value = $60,000

Current Weighted Value = $30,500

Qualifying Prospective Customers

» Are real buying signals present?Need (vs. Want), immediacy, budget, management buy-in

» Most every sale replaces something or someone!Green field sales are uncommon

» What are your prospect’s alternatives?Understand them — and get them on the table earlyAre you convincing them, or are they convincing you?Always pre-empt customer’s alternatives, lest they will revisit you!

» Qualifying: a process of developing a mutual plan for successWhat’s in it for your customer… what’s in it for you?

VMS Sales Boot Camp

WMT

Qualifying Prospective Customers

» Qualifying new customers never stops…The process of determining if there is a “good fit” occurs incrementally… throughout each step of the sale process (ABQ!)

» What is the prospective customer’s criteria for “Yes”?You don’t know unless you ask

» Is the Prospect qualified to buy?… Use proxies… they are less threatening

Option 1: “Hey, do you have the authority to make a decision and spend your company’s money, or are you just wasting my time?”Option 2: “What is your decision process, how are you involved, and how can I support you?”

VMS Sales Boot Camp

Working the Pipeline

» Establish sales activity metrics, and track# of phone calls, meetings, proposals, etc.Early on, sales activity is the only thing you can measureAfter some time, sales results is the only thing worth measuring

» Balance sales activity throughout each stage of the funnelUnbalanced activity results in choppy deal flow (roller coaster)Choppy deal flow results in choppy cash flow

» Use pipeline to focus and throttle your sales activityOpportunity storage: the countertop, refrigerator, or freezer?Balance and pace your sales focus / efforts appropriatelyEstablish your own Sales discipline, rhythm and tempoPositive value will accumulate over time, for harvesting

VMS Sales Boot Camp

Top Deal Focus

» Sales focus exclusively on the top 2-3 deals likely to close

» Ignore new leads» Ignore developing leads into

opportunities» Ignore existing customers

VMS Sales Boot Camp

Sales Pipeline Focus

Cashflow

Balanced Pipeline Focus

» Sales focus is 50% on the top 2-3 deals, 50% on developing the funnel

» Continual efforts to qualify and develop new leads

» Continue to explore opportunities within your customer base

Cashflow

Working the Pipeline: Important Items to Track

» Initial contact date → length of sales cycle» People → players and their respective roles» Need / Problem → specific hot buttons and priorities» Revenue Type → what are they paying for: product, services» Revenue opportunity → initial sale $$ vs. follow-on $$

potential» Customer Pace → moving slow/fast, decision timing» Next Step → ball is in who’s court» Buyer(s) → who is responsible for making the decision» Engagement Notes → can you/someone else understand

VMS Sales Boot Camp

Measure and

Modify

Pipeline Decision Making: the Dead Squirrel

» You are driving down the highway and see a squirrel squished on the side of the road

Is your decision: “The squirrel is dead” Or, “Should we pull over and investigate further?”

VMS Sales Boot Camp

Pipeline Decision Making: the Dead Squirrel

» In sales, you must always make decisions with an incomplete set of information

Especially in a Start-Up environmentUnderstand what is important and act

» Too much analysis will cause paralysesKeep moving sales opportunities through the funnel Don’t belabor incomplete knowledge; trust your instincts and take action

» The deal you’ve been working on for a long time, is dead?Don’t dwell upon dead deals… RIP, amen, move onNothing to move onto? You must have put all your eggs in one basket!

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Closing Deals

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» Why People Buy

» How People Buy

» Selling to Gov’t and DoD

» Who are your Buyers?

» Closing Tips, Traps and Techniques

» Buyer Personalities

Who Are Your Buyers?

VMS Sales Boot Camp

ManagementExecutive

Operations

EconomicImperatives

CEO, CTO, VP Engineering Access to funds Accepts responsibility Drives solution NOT: 1st level management

Strategic BusinessInitiatives

Globalization of R&D or Manufacturing

Time-to-Revenue Quality or Yield initiatives Cost Reduction NOT: product features

Tactical BusinessNeeds

Centered on need / problem Better, cheaper, faster value NOT: a strategic initiative

Who Are Your Buyers?

» Occasionally, a single buyer is all you needEvaluate the offering + make the decision + write the check

» In most cases, purchasing decisions require team buy-inAnd your job is to drive the process and build consensus

» Recognize the difference between influencers vs. buyersInfluencers are key to building consensus, but they don’t write checks

» Operational responsibility vs. decision making authorityFrequently they are in different places!

» Know who you are talking to, and what motivates themGet to the right people, and drive consensusDo not assume they are talking with one other!

VMS Sales Boot Camp

Why People Buy

» 75% of successful selling employs your ears and your brain, not your mouth

Listen carefully to customer’s key needs, concerns, hot-buttons, pot-holes, and business prioritiesResist the temptation to “solve the problem” too early in the discussionInvest your time to listen carefully… probe, challenge, empathizeIf you listen and probe carefully enough (and take good notes), the customer will write a winning proposal for you!

» Fear, Uncertainty and Doubt (FUD)Identify the bad things that are expected to happenWhat is the cost of indecision? E.g. if “Do Nothing” is the answer

VMS Sales Boot Camp

Why People Buy

» People tend to buy when the following issues are well established:

Recognition of an unsolved problem or unmet needROI value of a solution is understood (vs. alternatives)Recognition that your offering is the best alternativeConfidence in your team + company viabilityYour vision and road-map (there is a better future)Trust and likeability is established with the Sales repBudget availability + company priority are aligned

» As much as the offering value, people buy knowledge, credibility and trust

Lots of proxies for “No” when these are not firmly established

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Foxes & Power

Brokers

How People Buy

» Gather “how they buy” intelligence… and develop a synergyCapital vs. Expense spending policy?FY budget planning and allocation cycles?Coordinate your selling cycle with their buying cycle and available funds

» What is considered a discretionary expense?Requires no formal approval process

» What budgets are available?Training, research, another department…

» Can you “finance” the deal?Accrued and deferred payment?

» What do they have?Ski lift tickets, cheese…

VMS Sales Boot Camp

HP

GVC

Lahey

Selling to the US Government and DoD

» Like private-sector salesDo not make promises or tell the procurement officer what they want to hear to make a sale — it will kill repeat salesCase studies are the best advertising you can have, and bolster your credibility (“If they were able to solve that problem for that agency maybe they can do the same for my agency” )Word of mouth every bit as important in the Gov’t space as it is in private sectors — a happy customer is a sure ticket to future success

» Unlike private-sector salesEmphasize product quality and mission performanceRemove language about “increased profitability” or “increased ROI”Use “increased efficiency” with caution

VMS Sales Boot Camp

Selling to the US Government and DoD

» Use government sites to find opportunities www.fbo.gov, www.fpds.gov, www.ebuy.gsa.gov, www.dibbs.bsm.dla.mil/default.aspx are a few

» Understand government speak… replete with acronymsMATOC, IDIQ, OSDBU, several thousand more

» Invest in as many procurement mechanisms as possible (how the US Gov’t and DoD buys)

GSA Schedule, 8(a) Certification, 8(m) Certification (or WOSB), HUBZone Certification, or Service Disabled Veteran Owned Small Business Certification, DoD STD 2167A (Software), Central Contractor Registration (CCR), Online Reps and Certs Application (ORCA)

VMS Sales Boot Camp

Selling to the US Government and DoD

» Pay attention to (and support in your offering) political trends, so you become the “easier buy”

Going green, cloud computing, just-in-time, etc.

» Be persistent —government purchasing cycles longer than normal business-to-business cycles

Look for SAP deals, otherwise Gov’t sales is a function of patience and persistence

» Work yourself out of a job to build a good referenceTrain your Gov’t customer to perform a function that will remove you from the equation — he or she will view you as a team player and recommend you to 10 others

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Buyer Personalities

» Your ability to spot (and navigate) different personalitiesJust as critical as understanding different job functions, responsibilities and the buying decision process

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???

Buyer Personalities

» Green Flag personalities (deal enablers)Ready-willing-and-able, knowledgeable, apolitical, well organized, straight shooters, stable and grounded …

» Red Flag personalities (deal blockers)paranoid, change-adverse, incompetent, hidden agenda, highly political, disorganized, dishonest, unstable …

» In sales, you MUST work successfully with both Green- and Red-flag personalities

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Personalities You Will Run Into When Selling

» Calvin the CowboyJumps at the opportunity to tell you how big his company is… shoots milk in his coffee every morning from his hip … Calvin has a menial job and works in a small cube

» Peter the PlannerWill research new technology until the cows come home… Peter is all hat and no cattle… he avoids any change or decisions as too risky

» Gary the GathererFollowing orders… is mostly clueless what is driving the deal… primary job is to collect and distribute information, not understand it

VMS Sales Boot Camp

Personalities You Will Run Into When Selling

» Barry the BaiterGive me a good deal… we have lots more work for you in the future… will show you a big carrot to grind you down, then disappear

» Ralph the RFPerSpends 6 months pulling together a detailed Request For Proposal… for Ralph, it’s all about the process, the answer matters far less

» Erica the EngineerKnows her business inside-and-out… knows what she’s looking for but open to ideas and suggestions... wants what is best for her company

VMS Sales Boot Camp

Personalities You Will Run Into When Selling

» Greg the GamblerHas a “great” new idea… will pursue new opportunities all on his own with zero internal collaboration or buy-in…

» Wally the WallflowerVery knowledgeable about his business, but will disappear at the first sign of disagreement or conflict

» Otto the AutocratRuns the place or thinks he does… You work for him… Otto will buy from you, but Otto will not attend your funeral

VMS Sales Boot Camp

Personalities You Will Run Into When Selling

» Paul the PoliticianWhat’s in it for me? Talks Power, careers, and results… Known to stretch the truth — Scratch that...Paul is a born liar

» Norman the Nay-SayerCompensates his lack of knowledge with an overly pessimistic attitude… his life sucks… his mission is to make your life suck too

» Christina the CollaboratorWin/Win mentality... professional, polished, respected internally… Knows the game and plays it well… Always prepared… Christina will buy from you, but she is very dangerous to your margins

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Personalities You Will Run Into When Selling

» Know who you are talking to!Research the company/person, prior to engaging (Google, website, Linked In, Facebook, Jigsaw, etc.)Perceptions often developed in the first 30 seconds!

» Understand their motivationsIs it a personal need, or a legitimate business need?

» Develop a conversational rapportEmpathy wins, apathy loses

» Trust your instincts!

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Closing Tips, Traps and Techniques

» When you catch yourself “selling” you probably already lostMost people buy in spite of a hard sell, not because of it

» Be wary of setting price expectations too earlyThe first number that comes out of your mouth tends to stick (very difficult to un-ring this bell!)

» Is the answer to the “How much will it cost me?” question an unknown?

Then the cost of getting to a reliable estimate is the first thing you are selling! E.g. requirements gathering/assessment phaseDon’t guess… you’ll probably look stupid, and you can go broke

» Pre-empt the 3 primary questionsWe are good at what we do, but we are not clairvoyant

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» People have 25 different ways of saying “No”24 of which are ambiguous: learn to interpret proxies for “No”“No” is always your second best answer (“No… But” is better)Beware of the “Slow No”

Closing Tips, Traps and Techniques

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“Please send meyour Literature...”

… my garbagecan needs a meal.

“I really like whatyou have to say, but(take your pick)...”

I remain somewherebetween confusedand unconvinced.

“Management hasdecided to reassessour priorities...”

And my lack of visibilityinto what mgmt reallythinks continues toastound me.

Closing Tips, Traps and Techniques

» Put a price tag on everything of valueCommon mistake is to overlook the value of ancillary services E.g. consulting, set-up, legacy conversion, training, etc.

» Waive or discount product/service fees if necessaryThere is no perceived value in anything you give awayAnd if there is… you are setting a poor precedent!

» Sales “price discretion”Ability to deviate from standard pricing is essential… especially in a start-up!Define your discretionary levels

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Closing Tips, Traps and Techniques

» Any legitimate concern your prospect has that goes unaddressed

A potential landmine waiting to explodeFerret out concerns, lest they revisit you later!

» Any legitimate concern you may have that goes unaddressedA potential landmine waiting to explodeBe candid with your concerns — candor builds trustDon’t be afraid to probe and challenge

» Get comfortable with “we don’t do that” (yet)A little credibility goes a long way

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Closing Tips, Traps and Techniques

» Appropriate use of email vs. phone vs. face-to-faceKnowing the buyer’s preference can make the difference

» ListenMore than anything else… careful and patient listening will drive salesThe closer you listen, the better you are able pick up on issues, needs, priorities, as well as important buying (and stalling) signals

» Develop a “Sales Conversation”A proposal is the logical end-step in an effective sales conversationNot: “Can I send you a proposal?”Wait for: “This all sounds good… how do we get started?”

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Closing Tips, Traps and Techniques

» Appear bigger and more professional than you areUse “we” not “I” — and make sure everyone on your team does too!Websites: they rarely close deals, but are great at stopping themProfessional correspondence: emails, PPTs, letterhead

» Don’t spill all of your candy in the lobbyTrust and confidence is established through a continuous back-and forth exchange of information — not by unloading all your information in the first meetingAlways define the “next reason” you have to talk

» Aim Small, Shoot SmallWhat is the lowest-cost thing you can sell that delivers value and establishes confidence?

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The Pickers

Closing Tips, Traps and Techniques

» “It is difficult to get a man to understand something when his job depends on not understanding it.” -- Upton Sinclair

If “increased efficiency” is part of your value prop, try to avoid selling to the person whom you are displacing!Sell at the right level in the organizationEstablish contact with all stakeholders early in the engagement

» Be wary of hidden agendasPrevalent in highly regulated / bureaucratic marketsE.g. Stalking Horse RFPs, NIH Syndrome, 3 bids, more…

» Post-mortems: share and study lost deals with your team!If people were dropping dead on your front lawn, you’d probably want to know what was killing them, right?

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The Value of Time When

Negotiating

Closing Tips, Traps and Techniques

» Develop a “Joint Proposal”Your “listening notes” form the foundation of any winning proposalNever send a “final proposal” … always start with a draft to discuss, and encourage customer feedback and refinement

» Customer collaboration on proposal development accomplishes three objectives

Uncovers any important items that you may have overlooked, that are deemed important by the customerDemonstrates that your company is truly collaborative to work withThe proposal becomes “mutual owned” – both parties have a vested interest in seeing it succeed

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Closing the Deal

» Strategic vs. Tactical prioritiesA personal need, departmental need, or company priority?Any initiative that is below the top 2 company priorities rarely happens

» Start small!! (How do you eat an elephant?)What is your low-risk “Proof-of-concept”?What is your “Loss Leader”?

» Ask: What can I do uniquely today for this customer that …. Solves a real problem, and in a short timeframeDoesn’t involve much risk, establishes credibilityDoesn’t require management budget approvalProvides a logical starting point for doing more in the future

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Agreements, Proposals, Statements of Work

» 80% of agreements: boilerplate content with standard T&CsRemaining 20%: your discussion notes, written professionally

» Agreements should not contain any surprisesEverything in an agreement must already have been discussed

» Keep agreements short and simpleThey reflect what it will be like working with youThey either invite or discourage legal scrutiny

» Negotiable vs. non-negotiable items: know the differenceDiscuss and resolve any non-negotiable items up-front

» Include “OK to market” clause in your agreements

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Sales Role Play — Interactive Session

» Everyone pair upOne of you is the salesperson, the other a prospective buyer

» Sales people, exit the room we’ll call you back in one minute» Prospective buyers:

You have been presented with a $50K proposal, consisting of a $25K up-front payment, with the balance payment tied to two project milestonesThe vendor’s offering is compelling… you have a legitimate need, authority to purchase, approved budget, timing is good, you trust the vendor, etcBut… you haven’t signed the contract because you feel the up-front economic risk is too high before actual value is established in your organization

VMS Sales Boot Camp

Sales Role Play — Interactive Session

» When the salesperson enters the room…They will be instructed to figure out why the contract is not signed

» Your job… Come up with any viable excuse you can think of as to why … anything BUT your true feelings about the risky, large up-front payment

» If the sales guy figures out what the problem is…Confess, and then request he/she propose more workable terms

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Closing the Deal

» An agreement/contract is a perishable itemContracts degrade in value every day a decision is not made

» Leverage customer referencesYour silver bullets: use to confirm a decision, not make one!

» Know thyselfPositive mojo days — make those important calls!Bad mojo days — go to the movies, you should not be talking with anyone

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Closing the Deal

» Selling works both ways: establish your own criteria for “Yes”Turning away a prospective customer for the right reasons is good for business — and it feels good!

» The “Return on Investment calculator” comes in two formsHard dollars (economic savings or gains)Soft dollars (benefits difficult to express in dollars E.g. improved productivity, easier, faster, more reliable, etc.)How powerful is your ROI force for changing the status quo (incremental vs. obvious)?

» If you see a deal slipping away…Probe and challenge!Throw the blocker under the bus

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Closing the Deal

» Sales = debugging people’s objections to spending money» Debugging occurs by developing your own specific “Objection

Handlers”A prepared list of canned responses to the most common objections to purchasing your product or serviceComes in different flavors: competitive, product usefulness, product benefits, adoption and price

» Objections over Price?Congratulations, you are getting closeDo not undermine offering value, you can always add more product and/or services, or you can discount

» DiscountsYou can always go down in price, you can never go up

VMS Sales Boot Camp

Closing the Deal: Negotiations

» “No, but” is buying behavior… “Yes, but” is selling behaviorDon’t mix the two

» Making decisions with limited information is a reality of selling, not Negotiating

» Understand your customers “BATNA”Best Alternative To No Agreement (this is your leverage)

» Create a formal concession plan: “W3”Where you want to end up + What you are willing to give up, defines… Where you need to start

» Search for the “Elegant Negotiable”Items that are important to one party but not as important to the other party

VMS Sales Boot Camp

Establish Triggers & Maintain

Price Levels

Deal Closed! What’s Next?

» Signed agreement in-hand, what is next?Facilitate new customer ‘on boarding’ process

» Get back to your funnel, after you have ….Transitioned all customer knowledge to your team (“on-boarding”)Educated the customer in anything they need to know about your people, process, support, etc.Identified and introduced a new primary POC (if possible) e.g. Project Manager

» Keep abreast customer satisfactionCheck in from time-to-time, especially for no particular reason

» Let the farming begin!

VMS Sales Boot Camp

The Sales Person, Building a Sales Culture

VMS Sales Boot Camp

Hire Sales Athletes

» Sales DNACompetitiveness + Confidence + Discipline + TeamworkNeed and drive, more important than knowledge

» Sales Athletes …Know the value of training, the value of teamwork, and how to prepareHave cut their teeth on losingKnow how to be coached, and WANT to be coached

» Discipline is a daily nutritional requirement for sales successPipeline development, deals in progress, product updates, account education, team planningAll equal – “Where do I spend my time?”Whether incredibly busy, or hearing an echo – sales must knowhow to focus

VMS Sales Boot Camp

Building A Sales Culture

» Sales can’t sell what they don’t believe inSales people are the easiest buyers – they want to believe, they need to believe, they don’t want to BS customersPassion cannot come across without knowledge

» Show sales the landmines in your offeringThey will steer around them

» Continuous and committed education of the sales teamStoke their passions and inherent personality traits thatmake them good at what they do

» Burning trust with Sales has a ripple effectYou lose their trust + they lose the trust of the buyer… Waters down sales passion and enthusiasm

VMS Sales Boot Camp

Sales Cultures Have the Following Traits

» Sales and Development regularly communicate» Management fosters a tight relationship

‘Success interdependency’ between the efforts/rewards of engineers and sales people

» Engineers work “on the edge” of the business as opposed to “cloistered and protected”

Engineers learn from sales and vice versa — and share in the success of all wins and lossesWith increased customer visibility, engineers tend to build more relevant product with a greater sense of urgency — build for the needs of the Customer and the Market majority

VMS Sales Boot Camp

Character and

Intelligence

Sales Cultures Have the Following Traits

» Engineers must know (and feel) customer requirements» Business success tied to team coordination and execution

Customer needs and sales execution not a mystery to anyone

» Sales and engineers learn from one another Develop critical business skills outside their core competency

» 80% of a sales person’s successAttributable to his/her relationship with engineering, not management

VMS Sales Boot Camp

VMS Sales Bootcamp

» Every start-up — a hunt for the first customerMake sure they are a good fit… prepare, collaborate, and persist!

» Establish the tools and discipline to work the pipelineSales is a team contact sportDon’t get fancy… get focused, and establish a sales routine

» Know your target profile + why and how they buyAlways know who you are talking to

» The toughest part is getting startedAlways start small, sell small

» Individual customer deals do not scale, a sales culture does!!» Sales… it’s not Rocket Science!

(MIT caveat: unless of course it is)

VMS Sales Boot Camp

January 2012

SALES BASIC TRAINTINGBOOT CAMP

Thank you.