the entrepreneurial selling process bill collins 10/11/2015bill collins efp caltech1
TRANSCRIPT
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