3 Quick Entrepreneurial Sales Lessons

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3 Quick Entrepreneurial Sales Lessons


The following is a guest post by Daniel Tenner.  Daniel is the founder of several companies including GrantTree.  He blogs about startups and founders at Swombat.com.  You can also find him on twitter.

3 Quick Entrepreneurial Sales Lessons

"Every no gets you closer to a yes."

Permeating the human science (or art) of sales is this fundamental idea: sales fail all the time.

One of the hardest things for me to get used to, as a geek/artist/writer in business, is the constant disappointment of sales. The harsh reality, however, is that many leads will not turn into clients, no matter how exciting they might seem at first. And yet each lead must be given attention, enthusiasm, dedication, and so on, if it is to have any chance at all of turning into a sale.describe the image

Some people are very good at working on 50 new deals a week knowing that 45 will fall through. They deeply, personally understand that every no gets you closer to a yes, and yet don't let it distract them from pursuing every answer with tenacity, ferocity even. We call them salespeople, and many people look down on them, but those people often make the difference between a business and yet another failed startup.

Competent salespeople, particularly those with an entrepreneurial attitude and the ability to work things out as they go along, are rare and precious. Treasure them.

"It's not over until the fat lady sings."

However, even if you're not a salesperson, you will have to pursue and close deals. Deals, like sales, fail all the time. Never ever make critical decisions that depend on a deal happening (be it a grant application, an investment, a merger, or even just a new customer), until the money is in the bank. Even happily signed contracts are no guarantee that the money will actually change hands some day. The only thing you know for sure when you hold a signed contract in your hands is that the other person knows how to use a pen.

As an extreme example, one potential GrantTree customer we were talking to, at one point, asked us, "so, if you're going to write this application for us, can I take on some loans right now on the basis of this grant?" That is almost exactly the wrong attitude when dealing with any kind of deal that's not certain, and as we've already established, no deal is ever certain until the money is in your bank account.

Never base future expenses or commitments on money that's not in the bank yet, even if it's owed to you, even if you have an apparently ironclad contract. Any number of things can happen between now and then that can change that certitude into a painful (hopefully not fatal) disappointment.

"A bird in the hand is worth two in the bush."

Another truism of sales, which emerges from the high failure rate of any deliberate sales endeavour, is that customers that you already have on your books are worth much more than potential leads.

This is actually something many (though not all) salespeople fail at, because of the natural focus of sales around getting more leads and converting them. However, as a business owner, you can't afford to make that mistake. It's very tempting, when chasing a $100k deal, to look down on the 4 or 5 $10k deals you already have as a comparative waste of your time. And maybe, when you regularly close $100k+ deals, you should start turning away customers that are just too small for you. But until then, treat every customer as well as if there were no more leads coming for the next year.

If you treat customers well and they like you and are happy with your services and products, they will provide the best kind of leads: "hot", word-of-mouth leads. They will also provide you with testimonials, client success stories, and other sales materials that you can use to get more leads and more sales. Your customers can be your best salespeople, but only if you treat them right.

Conversely, if you treat your customers badly, word will spread about that too, and leads will mysteriously become ever harder to close. So, treat them well.

"Go forth and multiply" ... your revenues.

What do you think?  Do you have any entrepreneurial sales lessons of your own?


Posted by Dharmesh Shah on Tue, Sep 06, 2011


I an grateful you stated it like that "every no leads to a yes", every no leads to a yes, speaks to both half/full empty and that sales is always sales training...you can't let luck solely dictate your grade. 
The only lesson I can offer is that How should precede What. (perhaps a marketing version of Sartre's Existence Precedes Essence). That is, the biggest hurdle is how you will reach and target, not what you're say when you meet them. So very many times I'm approached by someone with a "great idea that's no one's doing!" but absolutely no marketing plan and that will 'take care of itself because the idea is so great. 
Well I'm still waiting for any of those to go public.

posted on Tuesday, September 06, 2011 at 11:33 AM by Randy Z

You hear if often stated that unless your overall revenue per customer is less than 20k, you shouldn't have dedicated sales people. I think that's wrong, especially for start ups. Our growth, while expanding, still allows us to spend time speaking to every prospective client personally, even though the overall value of that client will only be around 3k. As we grow and the numbers don't support that model, we'll adapt, but for now we have enough time to spend with each lead.

posted on Tuesday, September 06, 2011 at 11:40 AM by Shawn Anderson

Really good one! 
I would add also the understanding that the first sales is a combined mission for everyone in the company. R&D becomes support and all that stuff :)

posted on Tuesday, September 06, 2011 at 11:42 AM by Tomer Tagrin

I need an investor for my small business I'm starting and carrying on. Do not want to fail in the attempt to grow so they can take my IT services to companies that require it. Thanks for your time. Greetings.

posted on Tuesday, September 06, 2011 at 12:13 PM by DIEGO ALONSO

We are ALL "selling" something; a product, a service, our time (for money). The sooner the new entrepreneur comes to this realization and understanding, the better off that they'll be! 
Thanks for sharing this, I have too!

posted on Tuesday, September 06, 2011 at 12:37 PM by Michael E. Schmidlen

Thanks for this encouraging article. You mention one way to prioritize our efforts - by the size of the deal. Another way to prioritize our efforts is by level of engagement. It doesn't make sense to spend a lot of time on a prospect that isn't interested. Organizations that provide free trials or freemium offerings can get deep insight into which customers are most engaged, and use that knowledge to prioritize and focus their sales efforts. We are starting to help companies do this. Likewise, for paying customers, its hard to treat them all equally because of time constraints. Watching for customers who have a significant change in engagement can help you prioritize to whom you should be proactively reaching out today.

posted on Tuesday, September 06, 2011 at 1:38 PM by Karl Wirth

The advice is very useful and encouraging as we embark on our institution sales focus from being purely a retail (higher ed student) proposition.  
With textbooks by chapter, we spent the last year learning the marketing that works for the retail side - and now going through learning about the institutional sales side 
I would humbly add "Every action deemed wrong in hindsight (by you) is a step towards the right action" as learning from experiences is far more valuable than the experience on its own. 

posted on Tuesday, September 06, 2011 at 6:47 PM by Amil

"Desperation is a stinky cologne."

posted on Tuesday, September 06, 2011 at 8:00 PM by Matt Ellsworth

Daniel - great points. These all fit under the heading "arrogance kills companies". The worst thing you can do is think you know more (or are better than) people willing to pay you for what you offer. Be humble, don't get greedy, think about building customer loyalty, that is worth MORE than the cash you'll get. And agreed to not take your sales folks for granted, nobody faces more rejection and still has to be the most positive person in the room :-)

posted on Tuesday, September 06, 2011 at 8:21 PM by Scott Barnett

Sales people or the profession of sales is not looked down-on. When it comes right down to making the gears of economy work, we are just mis-understood. Thaks for the perspectives.  
Cheers to sales and selling because without sales, the other professions would be without work. 

posted on Tuesday, September 06, 2011 at 8:42 PM by Rodwell

This is a very good post. I have worked in sales of about 8 years and am in the process of launching my own business. Its very true that every no gets you closer to a yes. But my favorite one is that you don't base decisions on possible sales. The deal isn't closed until it is closed and paid for so don't take on any additional expenses based on that revenue until the money is in. Thanks

posted on Wednesday, September 07, 2011 at 11:53 AM by Don Tarinelli

"Go forth and multiply" ... your profits.

posted on Thursday, September 08, 2011 at 10:43 AM by matt

The rule of three. 
Three times as long, three times as much effort and a third of the profit. 
Work on that basis and you won't be disappointed.

posted on Thursday, September 08, 2011 at 10:47 AM by Accountants in Kent

My lesson would be to not try and compete in an overcrowded and ultra-competitive sector. There are amazing sales people who have been doing it for years, and trying to compete with them when you are a rookie is a slow and tough path to choose. If you can find something where you have no competition, then people will try and sell themselves to you instead. 

posted on Thursday, September 08, 2011 at 4:46 PM by My entrepreneur blog

Every no gets you closer to a yes...if you're constantly learning and adjusting to the feedback. This is a part of the sales dictum that is so often forgotten. 
If you're marketing and selling in the wrong way, and you're not improving listening and learning, there is no getting closer to your goals.  
The goal isn't to spend an wasteful amount of time making a zillion calls. The goal is to improve so that every month you have to make fewer calls to exceed goals.

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