Summary of B2B Sales for Startups by Kent Summers
This is a summary of:
What is B2B sales?
B2B sales solves complex, nuanced problems. If they were straightforward, they’d already be solved. You solve these using innovation, which is a better or faster way, by having people do things differently. B2B sales operates in an environment of unknowns and uncertainty.
A B2B sale replaces something or someone, so it’s highly competitive, and you need to understand who (inside or outside the company), or what, or both you’re displacing. That’s why there’s always a hidden agenda, and you need to surface it by asking the right questions.
B2B sales involves team purchasing: one person who starts evaluating you, a senior decision-maker, procurement, HR, and finance.
B2B is charged based on value added, not COGS, and not on the technical complexity: solving a small problem for a lot of people at a giant company is worth a lot.
Because of all this, B2B sales can take two months or more, and cost you a lot, both in direct cost and opportunity cost.
Now that we understand what B2B sales is, let’s see how to do it:
If 1 in 10 leads work out, you’ll be an extremely successful salesperson. The typical ratio is 1 in 30 or 50.
You should have a company profile like “Family offices with $100m in investable assets within 25 miles of Austin”. If you give this criteria to someone, they should immediately be able to start listing suitable companies. Tighter the criteria, the better.
Inside the company profile is the buyer profile, determined by job responsibility, unmet needs, and access to the chequebook (decision-makers).
Ask for facts (“do you”), not opinions (“would you”). People love to share their opinions and theories, but they’re not helpful.
Identify facts (“features take ages to launch”) accompanied by real pains (“Customers yell at us”) and costs (“Our biggest customer, who pays us $30,000 a month, threatened to quit”). Not theoretical or implied gains like “If we had a polished UX, our company would be worth 20% more” which are hard to measure.
Don’t focus so much on a promising deal that you ignore other companies in the pipeline. The former may not materialise, leaving you with nothing, because you put all your eggs in one basket. If that happens, you can’t dwell on it. You can only respond to “we’re going to do something else than hiring you” with “that’s fine” and move on.
If you’re asked what your customer profile is, you should be able to give one scenario, not 3 or 4. If multiple companies pay you to solve a similar problem, that validates your customer profile.
Once your customer profile is validated, you can go out and find leads that fit that profile.
When you get on a call with a lead, you don’t know if they actually meet the customer profile. Ask questions that will cause unqualified leads to drop out, such as, “Do you have a budget of $100K?” People say you have to qualify your leads, by identifying who among a pool meet the criteria. Actually, you have to disqualify companies that fail the criteria.
In B2C, the website does all the heavy lifting, and the salesperson supports it. On the other hand, in B2B, it’s the opposite. Websites never close deals, but they’re really good at preventing them from happening. If your website has too much information, people are overwhelmed, and walk away. You have only 3 minutes to make it really clear what you sell, how it fits into their world, speak about their world, how your service benefits them, and spark their curiosity to talk to you, or to champion you within their company. Make them call you for details. Another mistake a website can make is to focus too much on the solution, and not enough on the problem.
If they don’t understand the basics of what you do, or don’t see its value, move up (ask to talk to their boss), or move on. Educating the ill-informed, or convincing skeptics, doesn’t work.
If they don’t have the level of business necessary to justify your fee, move on.
Move on by saying, “Please call me back in six months when you’re ready”, and hang up.
Outbound sales is hard: your job is to ambush people’s calendars, and you get your teeth kicked in most of the time. Even people who agree to talk to you are less interested, impatient and willing to give you only 20 minutes. They have an attitude that they’re doing you a favor. So you need to be extra gracious, such as thanking them for their time.
If you get an email from someone who remotely fits your customer profile, get them on a call. Don’t sell or share information over email.
Respect people’s communication preferences, such as meeting face to face.
Add incremental value to the other side in every meeting. That will make them talk to you, not obligation or courtesy.
Don’t be so focused on making progress that you end up not building a relationship; allocate plenty of time to the latter.
When the customer is telling you their problem, listen. Don’t give a solution immediately, because they won’t accept it till they’re convinced you’ve listened to all the facts of the situation. Like your wife, they may want someone to listen, not necessarily to immediately solve it. Don’t try to tell them you’ve understood their problem, or that you have their best interests at heart. Saying these explicitly backfires. Instead, show it to them, such as by listening to them as they explain the problem, without interrupting them. If there’s a gap in the conversation, don’t fill it immediately. Let the silence linger for a few seconds. Some people feel comfortable speaking only if you permit them, by letting the silence linger. If they don’t say more, say, “Go on.” If they say “that’s it”, turn to the other person and ask, “Would you like to add something, Peter?” Summarize what they said back to them and ask if you got it right. If not, repeat till you do. Buyers want to see you demonstrate empathy and earn their trust, only after which you’ve earned the right to talk about a solution. Before that, buyers would find it threatening, dismissive or insulting.
At some point a every successful sales process, the buyer’s view of you changes from a salesperson to “let’s solve this together”.
The buyer should recognize the value in their own words, not yours. It’s fine if what they say sounds like they’re missing the main benefit of your service. For example, a company had a problem with payments not going through. When I evaluated the tech, I advised them to rebuild the entire code to solve the problem. I thought that making the decision to rebuild it was the main value addition. But the founder felt that the main value addition was root-causing the payment bug. They get to decide what the benefit is, not you.
Don’t come across as serious, anxious or formal. Be relaxed, which will relax them. Be professional about your knowledge and competence and the information you share, not about your communication style.
Sometimes companies are ready to make a decision. If you’re not responsive at that point, they’ll buy from someone else, because they’re hungry. At other times, they’re planning for six months from now, in which case you can email them after a month.
You can’t try to foresee which lead will work out. You have to approach each unbiased. Sales is unpredictable. You can’t fret over it. Follow the process.
When rejected, ask yourself if you handled the process well, with the right attitude. If you did, don’t take the rejection personally, because it’s about them, not you.
If the above is too intimidating, and you want to hire a salesperson to do it for you, it won’t work. You need to take your business from 0 to 1, and a salesperson can then take it from 1 to n. You’re ready to hire a salesperson when you can say “Find more customers like these 12”, not “Go out and find who our customers are.”
Part 2
The following is a summary of part 2:
Companies buy when the following conditions are met:
Recognition of an unmet need. It’s not enough for them to have an unmeet need; they should feel so.
This need is a top priority for the organization.
The pain / cost of the problem is quantifiable. e.g., we have a 40% attrition rate.
A well-respected person within the company owns the initiative.
These will unlock the budget, and the company will buy, whether from you or from your competitor. In order for you to win, the following must also hold:
Your offering is perceived as the best.
They have confidence in you.
They have a trusted relationship with you.
If even one of the 7 criteria above fail to hold, it’s a no.
Don’t try to close a deal in the first meeting.
Don’t dump all the information you have onto the buyer. Answering questions they didn’t ask, or sharing more detailed information than asked, will confuse the buyer, and confused buyers don’t buy.
Is the client sharing valuable information about themselves in each meeting? e.g, How your solution will be valued by the company (the economic impact of your solution). In the next meeting, they could share what teams within the company will benefit from your service. If they’re not sharing anything valuable, they won’t convert. A good buyer-seller relationship is the exchange of value throughout the process. If they’re taking but not giving, because they don’t trust you, or for any other reason, don’t set up another meeting, because they’re not qualified to take up more of your time.
Likewise, people who refuse to cooperate with your sales process, or give poor answers to your questions, or take a long time to respond, are poor fits.
At some point in the sales process, widening the conversation to other stakeholders on their side, like another founder, increases your chance of the deal going through. More the people you talk to, higher the chance. So you should ask them to bring others in, at some point in the conversation. Bringing others in requires them to spend a bit of their social capital. It’s a risk for them, but if they don’t want to risk, that’s a red flag. Either they’re not interested, or they’re not the right person to talk to, or something else that you need to figure out, but proceeding isn’t going to help. If things are going well, they’d be eager to introduce you to someone.
When you build software, you identify and fix a bug, after which you’ll encounter another bug to fix, and so on. Similarly, to close a sale, objections surface one by one, and you fix it, resulting in the next objection being thrown at you. When they object about price, it’s a good sign, because it means they have no objections with the service. You’re at the closing stage.
Cold emails and LinkedIn emails should be two sentences, in an informal tone, because you’re not qualified to take up more of their time.