Sales Funnel

Here is a typical sales funnel

  • Prospecting
  • Outreach
  • Qualification
  • Pricing
  • Closing
  • Implement

Prospecting

Have a sales hypothesis - company X will have problem Y that your product can help solve.

Easiest way to get to prospects is having them reach out to you. Sending cold emails is the least effective way to get their attention.

  • Launch early and often
  • Publish videos and posts
  • Self service demos
  • Online communities Industry conferences

Outreach

Re. cold emails - although not effective, write persoanlized emails by hand. Dont send emails that you won’t find excited to read.

A common antipattern - talking to anyone who will talk their call. This will filter for people who are easiest to talk to and not ideal customers. Don’t chase bad customers. Create a profile of the ideal customer and only talk to them.

Qualification

Find people who have the problem you are solving-

Once we get a prospect on phone- job is not to sell your product. We are trying to do 3 things

  • have problem and budget and decision
  • schedule follow up call Do not dive into a pitch and fail to ask enough questions.

Always remember- Sales is not an adversarial process. The prospect is not a monolithic entity. We are selling to an individual who has a problem. Deeply understand their problem and help them solve it. Great salespeople spend most of their time listening and asking questions.

Question: what made you decide to take this call? tell me about this problem how long have you had it? how bad is it? who else does it affect? how do you quantify the impact? why haven’t you solved it already? what’s your budget for solving it? how does your org buy software? who makes buying decisions? what are the steps in the process?

If they are not the ideal customer - you will save a lot of time.

Next stpe is a demo. Your job in a demo is not to show off the product - it is to convince the cusotmer that you can solve their problem. It should be like a movie script - with a main character and the problem they are trying to solve.

A good demo-

  • Tell a story exactly how the main character solves their problem
  • Every step of the story is a feature of the product
  • 1 or more magic moments - delight them with features
  • Personalized for audience - tailor to their company, logo, customers, name

Pricing

Use knowledge from previous calls to arrive at a price. Quote a price after getting all this info. Run experiments with various prices. High prices make customers take you more seriously.

User will take it back to their team to convince them - so make their job easier by giving them slides/pdf packets that makes it clear how pricing works. Include an overview of product and benefits of using it.

First few sales are optimized for learning, not unit economics.

The Value equation Work with champion (in the company) what they expect the product to do for them, i.e. what value it will deliver - cost saving/time saving/increase in revenue. Ultimately, this is a tool for them to take to their boss and convince them why they need it.

eg- if 1 HR person costs $50k/year in a 5 person team, and you save 10% of their time, you are saving 10% of $250k = $25k.

Next, charge 25-50% of value delivered.

The value equation also proves the success metric for the trial.

Commited recurring revenue or annual recurring revenue is preferable to usage based pricing.

Closing

Ask upfront how they buy software. Do everything to move throught he procurement process qickly. Keep legal documents simple. Use open source template published by “Common paper”. Our prospect is our biggest ally- be in constant communication and ask for help getting unstuck.

Implement

It’s your job to make it easy for them to implement. Make sure you deliver the solution, not just a product.

Treat customer implementation as an internal project with a roadmap.
Sales funnel only ends when your customer is using your product habitually.

Book recommendation - Founding Sales