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.
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?