Sales

RECOVERING A DEAL ON THE VERGE OF COLLAPSE

Every deal I’ve done with investors, strategic partners and new hires have one thing in common. At one point or another, they were on the verge of collapse. Or at least it felt that way.

Some were big distribution deals that my team and I had been working on for months. These deals had game-changing potential that would unequivocally demonstrate a new level of momentum. 

Other deals were more tactical but no less critical to longer-term success, like convincing new graduates in a cutting edge field to join our company. 

The punchline of this post is that communication and how incentives were aligned (or misaligned) was as at the centre of these deals ending up on the verge of collapse. 

It’s also the reason they were recovered.

I’m going to share the strategies I use to recover and, where possible, fast-track a deal because if there is one lesson I’ve learned from all the deals I’ve won, lost or been involved in, it’s this: A startup’s intent will almost certainly get lost amongst its desire to be taken seriously. 

Founders send countless emails and LinkedIn connection requests. They attempt extreme brevity, hoping that well crafted, minimalist elevator pitches will capture the recipient’s intention.

This behaviour, be it grounded in a lack of confidence or some other belief, can lead to founders investing a disproportionately low amount of their time in face to face conversations with potential partners, investors and hires, when compared to written communications. 

And this habit can become a real problem. 

Because written communication sucks the intent out of a message. Think about the last time you tried to pitch an idea or sell a product via email. 

It is nearly impossible to communicate the excitement, energy and focus of a venture in the written form. 

Deal intent and speed to close

The only reason two parties enter a deal is that value will be exchanged in one form or another. When one of the two parties is a startup, it’s fair to assume that they need the deal to survive.

One way to communicate that intent is to ‘play the startup card’. There have been many times when being transparent about how much the deal will mean to my team and company seemed like the most forthright tactic to use. 

I tend to play the startup card when the relationship has progressed to a mature stage, and I can have a conversation to deliver that message.

But there is a second way to communicate intent, which reduces the risk of being seen as the ‘needy founder’.

This second approach comes from a deep desire to not waste the time of others, or that of my team or me. 

‘We are excited to work with your team, and we’re interested to understand what our company needs to do to make that happen’.

I have used this statement countless times early in a relationship and when, for whatever reason, the negation phase of a deal has stalled. 

While this statement is a catalyst to achieve a fast ‘Yes’ or a quicker ‘No’, it also serves two more tactical purposes. 

First, it helps to refocus both parties on the steps that need to be taken to close a deal. This can also help founders open an avenue to play the startup card. Because for the most part, people in larger organisations won’t have the context to understand that timing is everything to the survival and growth of a startup. 

Second, it helps surface why a deal may not progress or has slowed. This intelligence helps adjust strategy, and ultimately course-correcting to find other deals if the one at hand is less likely to proceed.

Regardless of which method you choose, the point is this: When an intent is delivered authentically and at the right time in the conversation (and not in writing), good things generally tend to happen. And at the very least, your rate of learning increases. 

Signs that a deal is tanking

While there are others, the primary signal that a deal is unlikely to proceed is no signal at all. In other words, communications stall. 

There might be several reasons for the radio silence, and it’s essential to understand each of them. 

• Competing priorities - the other party is busy (or on leave) and might not appreciate how important this deal is to the founder
• Change in people - there has been a change in personnel or leadership at the other party which is causing delays
• Change in interest - the excitement to engage has dulled as a result of a change in strategy or risk appetite to work with early-stage companies 

A lack of communication about any of these circumstances is likely to stoke paranoia in the founder's mind, especially when the relationship to date has been productive. 

It’s important to realise that radio silence doesn’t necessarily mean a deal is tanking. However, the tactics to recover a deal or re-establish communications and the tempo with the other party are the same.

Tactics to recover a deal

I go back to first principles when I think about tactics to salvage a deal: What value can we add to the partner and what value do we aim to derive from the partnership. 

With clarity on this value equation, I focus on three tactics.

First, pick up the phone. Talking to the person who is your opposite number at the company you want to work with, the investor you want to engage or the person you want to hire is the quickest way to understand their status and any changes that might have taken place. 

This might be daunting to some founders. It’s easier to send an email because it delays the receipt of any potential bad news. But the point is to learn as quickly as possible. 

I have found that planning and rehearsing each call goes a long way to reducing any pre-call angst. The good news is that in nearly every call I have made to recover a deal, the relationship between the other company and me, investor or potential hire has strengthened as a result. 

Second, look for influencers. People influence people. Identify those incentives (try this tool) and look for people you know on LinkedIn who can provide insight into the situation or act as an evangelist for you and your company. 

Third, always deliver 51% of the value. This means looking outside the deal and finding ways to add value to the other persons professional or personal life. This can include sharing articles and events of interest to engaging on topics that are more personal and less work-related, like parenting, sport or hobbies, to name a few.

One last thing...

Speaking more and writing less to the people you are trying to convince and build a relationship with throughout a deal cycle is the only way to establish and maintain intent. 

The secret weapon founders have, in addition to their domain expertise, is their rate of learning. The higher the rate, the faster they understand how to create momentum. When it comes to closing deals, focus on understanding the intent and incentives of partners, investors and potential hires as quickly and consistently as possible. And remember it’s a two-way street. Because they need to understand your intentions as well. 

So pick up the phone and develop a habit for navigating deals through conversation. It will short circuit angst and even help recover the deal that will change the trajectory of your business. 

by PhilHSC

FUN AND CUSTOMER LIFETIME VALUE

I posted this photo online after finishing a conversation with a mentee yesterday. 

Life time value and fun

This two by two illustrated my point that was selecting which customer to work with, much like which person to hire or which investor to pursue, should be decided using two meta-inputs. Lifetime value (LTV) on one axis and fun on the other. 

And before I deconstruct it, I understand that in many cases beggars can’t be choosers. But I don’t subscribe to this notion as a default setting. In fact, I think it’s a dangerous mindset to fall into. And as I will write next week about fundraising strategy and selecting investors, you can be a ‘chooser’. It just takes a little considered planning.

Getting wrapped around your own axle 

There is no shortage of decisions that need to be made as a founder. And while we have access to many frameworks and perspectives to help navigate the trade-offs between which fires to extinguish and which to leave burning, the reality is we still have a large volume of decisions to compute every day. 

As time marches on and founders start to compromise on sleep, diet and exercise, the ability to make high-quality decisions gets harder. Perspective narrows and all the issues and burning fires can start to conflate and soon after, even the most simple choices end up running around your mind in the same way a song on repeat plays over and over. Hence, wrapping yourself around your own axel. 

I use the fun/LTV framework as a circuit breaker for two reasons. 

First, to help founders remember that while starting and growing a company is serious business, you need to be having fun. It won’t all be fun, but the fun has to feature. 

Second, to remind founders that they have access to more choice than they think. While they are in a constant state of resource constraint, a startup’s significant advantage are the choices it can make to learn and out-manoeuvre incumbents and competition.

The good news is that this framework does help founders unwrap themselves from around their own axle. 

Art and science 

There is a method to the madness of including fun and LTV on this framework. And it’s underpinned by the idea that high-quality decision making is part art and part science.

To deconstruct this framework and make it more applicable, here is the scenario I was working through with my mentee. 

We were discussing how to allocate very limited resources to develop new customer relationships. There are a number of new customers wanting to engage simultaneously. This is an excellent problem to have, but it’s still a problem. When the team is small and product availability is limited, trying to service all prospective customers would almost inevitably end in disaster. 

We ended up ranking prospective customers by calculating potential LTV (science) and then examining how much ‘fun’ (art) could be had by working with each customer. 

Calculating LTV is relatively straightforward.

Determining ‘fun’ is more subjective. I think about it in terms of incentive alignment and customer advocacy potential.

A self-reinforcing cycle emerges between customer and supplier when both parties want to eliminate a significant pain-point (incentive alignment). This cycle strengthens when you invest time and interest in learning more about a customers’ business. Not only does this insight fuel product development, but it is also uncommon. 

So uncommon in fact that it is remarkable. Which, by definition, increases the likelihood of the customer becoming your advocate. 

These are the types of relationships that make doing business fun. 

By plotting where each potential customer lives in the two by two, it becomes clear how to prioritise limited customer development resources. 

However, prioritising doesn’t mean investing all of your effort in one relationship. Circumstances change with time, so it’s important to be in motion on developing customers, even if on first inspection they rate low on LTV and fun.

One last thing...

The primary role of this framework is to act as a circuit breaker. 

And remember that the reason ‘fun’ is subjective is that there might be other signals beyond incentive alignment and customer advocacy potential that might be important. Keeping a radar on to catch these signals is important. Because we’ve all lamented starting a relationship with a customer that we knew we shouldn’t have just for the sake of traction. 

by PhilHSC

PARTICIPATING IN THE PURCHASE

I often hear founders describe linear experiences when it comes to acquiring or the purchase pathway for new users and customers.

It’s something like, ‘they see our Instagram ad and when they arrive at our site and click the trial button, then they...’

Statements like this assume a lot about moving a person from being unaware of your product to becoming an evangelist.

The product and marketing steps to achieve this are well known. Increasing awareness usually starts with communications to friends and family, some ads and (hopefully) a well-designed referral program. It continues with retargeting prospective users and customers on social media. Then comes the sending of repeated emails and alerts in the hope that people who signed up will move to the next step in your funnel.

These tactics are the standard and while they work to some degree, they aren’t remarkable. Regardless of how clever the message is or how innovative the delivery medium, the message(s) remain a monologue. And unfortunately, despite a founder's best intentions, these tactics can easily be interpreted as pesky and overdone.

The subtle but essential nuance that often gets missed is how teams should participate in the purchase. In other words, how can founders and their teams take unusual (and sometimes unscalable) steps to move their sales process from the expected to unexpectedly awesome?

A mini purchase

Just over a decade ago I saw the remake of The Italian Job. It was brilliantly recreated and it was also the relaunch of the much loved Mini Cooper. At the time I was in the market for a new car. I hadn’t decided on what I wanted but that indecision vanished as soon as the film ended.

In the following week I, at 6’5”, developed confirmation bias for Mini Coopers. I was seeing them everywhere. And it wasn’t long before I made an enquiry at the local Mini Garage while visiting friends in another city.

While I didn’t live in that city, I often travelled there for work. On my first visit to the Mini Garage, the young sales manager and I talked about options and pricing. He loved them as much as I did and his enthusiasm was infectious. At the end of the meeting, he told me to be in touch when I was ready to make the purchase.

The likelihood of making the purchase in a different state was unlikely but that changed a fortnight later.

At the time LinkedIn had a product partnership with an app which allowed you to log your business travel. After submitting the details, the app would notify your connections and people looking at your LinkedIn profile of your travel dates. It had often inspired opportunistic meetings and I was beginning to warm to it.

Prior to travelling back to the city where I had visited the Mini Garage, I logged my business trip and thought nothing of it. When I landed I received an SMS from the Mini sales manager asking if I wanted to borrow a Mini for the weekend. I was completely surprised and delighted and the story ends with him getting my business.

Notwithstanding how organised he was as a relatively young sales manage, he participated in the purchase. He did his homework and created an unscalable and by definition, remarkable experience.

A pre-purchase tactic

You might think that tactics like my Mini experience are reserved for luxury goods or only suited for business-to-business (B2B) relationship management.

They’re not. I think participating in purchases can (and should) happen in all business models.

I am not suggesting that every customer is subjected to special pre-purchase attention. That would be impossible. It should, however, be part of a venture’s plan to acquire customers.

Delivering adjacent value

When I think about strengthening a relationship, the first thing that comes to mind is finding ways to accelerate the other parties position. In other words, I think about their motivations and incentives and try to find ways to help them secure their incentive.

The best way to achieve this involves creating value which is adjacent to what you might want to sell them.

I do this for teammates and mentees as well as prospective customers, partners and investors.

And to be clear, this isn’t about procrastinating or leaving value on the table. It’s about playing the long game. It’s also about sometimes suspending the urge to lock down a short-term sale knowing that the value you derive will be much larger in the future.

There are a number of ways that you can create adjacent value and consequently participate in the purchase journey:

1. Provide access - This can play out in at least two ways. First, the CEO, co-founders and senior leaders can make calls to customers to see how they are enjoying the product and how they can improve it. It has always surprised me how excited customers are to receive a call from someone they never thought would take the time. Second, invite customers to events like webinars where they can learn and question specialists from your team about the problem you are solving.
2. Send product - The unexpected delivery of a product you might like and which you can try is one of the most potent ways of making a prospective customer stop and think about the effort you went to to surprise them
3. Offer service - Services-based companies can offer value in the form of a gift voucher for access to a defined amount of time eg a PR agency might offer 30 minutes of advice on a crisis management issue, redeemable anytime
4. Express gratitude - Calling a prospective customer to say thank you for considering your company (not if you can answer any questions or try to re-sell to them) will not only be unexpected but it demonstrates that the company felt them reach out
5. Recommend content - If you see content that you think is valuable to a customer (or partner or investor), send it. If you listen to podcasts and Reid Hoffman’s Masters of Scale Podcast, you will know how this plays out; he recommends other podcasts to start listening to
6. Direct to more mature providers - This one is more controversial but I have been surprised when in the interest of a long-term relationship, a business developer has recommended a more mature product (instead of their own) that will suit my companies needs

One last thing...

I usually ask myself three questions when it comes to delivering adjacent value.

Am I/we likely to derive long-term value?

Is this unscalable?

Am I/we likely to learn something from our prospective customer?

If the answer is YES for each question, the outcome is typically positive.

That’s how I approach participating in the purchase. How do you go about it?

by PhilHSC

INCREASING CONFERENCE ROI

I attended one conference this past year where I wasn’t speaking. There were two CEO’s I wanted to sell to, three people I wanted to meet and one presentation I thought would be interesting.

It was a two-day conference. It was expensive. And of the two days, I spent 45 minutes seated in the conference room, for the one presentation I wanted to see.

The rest of the conference was spent in corridors starting and doing deals. The return on investment (ROI) of that conference was positive and there are reasons why that was the case which I’d like to share with you. A third factor would have made for a higher ROI had LinkedIn released a new feature earlier than last week. More on that shortly.

There’s little doubt that speaking at conferences is a marketing force multiplier. And for those who pay to glean insights and network, their ROI is often a stack of business cards that join a growing pile in their office.

Hustle, network and new content

Conferences are expensive in terms of capital and opportunity cost. I can usually think of 10 other ways I could be investing time if I weren’t attending a conference. But from time to time, I can sell, network and learn from the speakers and if all three of these conditions are met, I buy a ticket.

The conference I mentioned earlier provided the opportunity to kill three birds with one stone but just turning up and hustling wasn’t the strategy.

Going into the conference I knew three things.

First, I was there to introduce and make B2B sales of a software service (inkl).

Second, people attending conferences are (usually) in sales mode. They are trying to put their best foot forward and because they are working to convince people of their value, they rarely expect to receive value.

And third, business cards are the standard form of initial value exchange, the first sign of mutual relationship.

Learn about who you want to know

I knew who I was there to sell to before I arrived and I was armed with three factors of mutual interest for each person I wanted to speak to. We either knew the same people, were connected through previous organisations or shared a love for a sport or humanitarian pursuit. Like me, those people weren’t interested in the conference content and spent much of their time in corridors on calls and doing business which made it easy to talk.

Deliver the unexpected

As far as rarely expecting to receive value is concerned, I worked with one of my fabulous team members to hatch a plan to deliver a personalised gift to each person I met and wanted to create a great first impression.

Here’s how it worked.

After they provided me with their business card, I told them they would receive a gift subscription to inkl in the next 10 minutes. When we moved on to new conversations, I sent a photo of the business card via Slack to my teammate. She immediately organised the gift and sent the recipient a welcome email.

Seven of the nine people who received a gift came back to me during the conference surprised that the gift had arrived at all and sealed the deal on first impressions.

The point here is that while I had a team member to help with the process and we had a gift that we would send virtually, you can easily achieve a similar outcome using a virtual assistant. As far as the gift is concerned, it could be exclusive content or an invitation to try your product for free.

Authentic surprise and delight mean a lot to people, especially when they least expect it.

Say goodbye to business cards

“I don’t do business cards.”

I haven’t done business cards for years.

When someone offers me a card, I offer to send them an email so they have my details. Nine times out of ten, if I want to engage with them in the future, I send an SMS thanking them for their time instead. Their number is now in my phone and my number is in theirs. And you’d be surprised how many people end up calling me to be in touch instead of sending me an email which saves time. Obviously, sending an SMS is a judgement call. There are some people I’d prefer didn’t have my number and I’m sure the reverse use case is true.

Each of these steps brings you closer to customers and influencers and consequently increases conference ROI.

As of last week, however, LinkedIn launched a feature which takes no more business cards to the next level. Here’s how it works:

1. Download the latest version of LinkedIn for iOS or Android.

2. Look for the QR code icon in the search box and press it.

3. Ask the person meeting if they have LinkedIn and ask them to do the same

4. Ask them to select ‘My Code’ and hover over it with your LinkedIn app while you’re in scan mode

5. Let the magic happen! Their profile will appear and then you send them an invite.

How good is that?!

One last thing...

There are those who consider conferences a short vacation away from family and the office. I don’t.

If you can sell, network and learn (in that order), then go but go with a plan to maximise the ROI.

And take a look at LinkedIn's new feature, it's brilliant!

by PhilHSC

HIRING YOUR FIRST SALES LEADER

Hiring someone who specialises in selling is tricky. They can create wonder from ordinary ideas and convince people to act in ways they wouldn’t ordinarily consider. They (I mean we) are known as hustlers because they can’t help but see and get excited by opportunities.

Most you can see coming a mile away while. They are urgent. Their bravado and ego overwhelm and polarise audiences. They fuel the used car salesman persona.

And there are those people who balance the delicate tension between nurturing relationships and closing sales. They also balance urgency with patience. They look, sound and act nothing like a used car salesman or woman.

In both cases, however, their gift of the gab can land them in situations where they don’t live up to the expectation they consciously (or inadvertently) set.

This isn’t a beat up on salespeople because I’m one of them. The truth is hiring the first ten roles in a startup is fraught with risk. Making a mistake with any one of them can be terminal for a business. This is as true for hiring the Chief Technology Officer as it is the first sales leader.

But don’t take my word for it. The 2017 First Round Capital State of Startup's survey has this to say:

For the first time, sales leaders take the title of hardest to hire.

In 2015 and 2016, engineering leaders were far and away the hardest executive hires to make. But this year, the tables turned, and sales leaders became the most coveted and difficult hires (with 26% saying sales was the hardest vs. 24% saying engineering). This looks like the start of a sea change as more enterprise companies enter the fray, compete for talent, and see firsthand how costly a bad VP of Sales hire can be.

I have been thinking about hiring plans a lot lately for a number of reasons. Here is the framework I use to think about hiring sales and business development people in a growing venture. I have shared this with mentees this past month and I hope it helps you too.

We need a salesperson

Accelerating momentum is the main reason why founders start the hiring process to find a sales leader. The reality is that one of three underlying circumstances trigger the decision to start looking. And each one should be understood because it informs the type of sales leader you’re trying to find.

First, the product is stable and the founder who has led sales to date needs to focus on market-facing activities. These might include opening new markets, strategic partnerships and managing investor relations. Second, the founders are deeply technical and need help convincing the market of their product’s value through sales. Third, previous sales hires haven’t lived up to expectations but there is still a need to build out a sales organisation to support growth.

Each reason is legitimate.

What happens next is a flurry of controllable activities.

Job ads are written (and by written I mean drafted based on other companies’ ads for similar roles), posted online and then the vetting begins.

Some applicants may come from professional networks who saw you share the post on LinkedIn but for the most part, you’ll be running the ruler over quick-to-respond albeit under-qualified candidates.

I call these actions controllable (and the outcome relatively predictable) because each step is known and can be executed with ease.

The uncontrollable aspects of hiring a sales leader are the unpredictable factors, the ones that if not carefully understood can bring a business to its knees.

The following nine factors help move these factors from the unpredictable column to the predictable one.

1. Why?

Do you know why you’re hiring a sales leader? No, really. Do you?

The punchline is that growth and momentum come from different inputs. Sales is one of them but it’s not the only one.

B2B ventures face long sales cycles with a relatively small number of potential customers. In the early years of a venture, founders handle these deals and relationships. B2B sales also attract the label of complex sales because of the number of stakeholders that need to be understood and corralled to get deals done. A sales leader might be able to engage with each of these people more effectively and engage with more clients but could a founder(s) do that if they were a little more organised?   

A sales leader may not be the right choice for a B2C business facing shorter sales cycles and customers with a potentially shorter lifetime value and higher churn rate. In this case, and particularly in software businesses, a growth leader who can bring analytics and marketing to the challenge is a better choice.

Alternatively, the founders may be poor at sales and business development and want to focus on their strengths. In doing so they bring in a sales leader who quickly establishes sales disciplines, begins attracting new customers and stems attrition.

The point is to know why you’re hiring a sales leader. You may not need one for now. If you do, it’s important the person you’re introducing into the business knows why they are there.

2. Rate of momentum

How much momentum a sales hire can add to the business in their first 30, 60 and 90 days will be telling. And depending on the business, this may or may not involve a closing sales to match your spreadsheet that demands exponential growth. Momentum should equal sales but it can also include the rate of:

• Assessing current sales processes
• Introducing sales disciplines eg establishing sales and CRM processes and providing visibility of sales activities across the business
• Learning through sales experiments e.g. cold calling vs email campaigns   
• Learning through customer relationships e.g. engaging with customers. This is particularly important in B2B businesses where customer perspectives may not have been updated for some time
• Filling the funnel e.g number of new leads for an existing product as well as a new product.

I also look at how quickly the new sales leader starts getting in front of customers by themselves. The quicker the better.

3. Discipline in execution

It’s one thing to plan sales activities. It’s quite another to do them and follow up leads to their natural conclusion (which is hopefully a sale).

I can tell a lot from the follow-up tempo of a sales leader. It takes discipline, skill and organisation to follow up a large universe of leads and engage with them appropriately and personally given their stage on the decision journey. It’s different for B2B, B2C and direct to consumer businesses but ask each candidate for their philosophy and concrete examples of how they have managed follow-up.

4. Sales and business development are different

Salespeople sell products. Business development people create relationships to open new businesses. Both require expert relationship management and resilience. But each one demands a different psychology.

Salespeople (often) follow a well-established method to identify, approach and convince prospective customers. There is an expectation that a proven method will deliver results in a relatively short timeframe. The approach to business development is more opaque as you navigate uncertainty to identify and open industries that will buy your product. This requires playing the long game. And while it can be slow going to generate results in both sales and business development, it is often frustratingly slow in business development due to the lead-time in building and capitalising relationships.

The same person can do both sales and business development but they will often prefer one over the other. Understanding this early is important to reduce lost time.

5. Crowd-vet talent

Key hires, including sales leaders, should be vetted by people outside the business. Ask board members and investors to meet with people who are nearing the end of the hiring process. At least one board member or investor should have deep sales and business development experience. Use them to identify the pretenders.

6. Focus on a number

The business, regardless of business model, should have a clear idea of forecast annual revenues. That might sound obvious but I always find it amazing how many new sales hires enter a business not knowing what they’re up for.

The bottom line is that sales leader candidates should be aware of these targets as you vet them and as they size you up. This is because the quantum of the targets will attract (and dissuade) people from applying. And those who express an interest are likely to be in the capability ballpark.     

7. Have a clear proposition

The best sales leaders are excellent at soliciting customer needs but they aren’t there to manage product development, their job is closing sales and partnerships. In other words, make sure you have a clear product to sell before you bring on a sales leader. Otherwise, the business runs the risk of losing focus on sales while the product evolves.

8. Understand incentives

Know why the sales leader is deciding to apply and join your team. There will be the obvious reasons like career development and developing skills or credentials in a new industry.

Look beyond those reasons. Appreciate their ‘why’ because that’s where their incentives live. As Charlie Munger says, incentives are a superpower. Understanding why someone is doing something is the quickest way to develop an alliance.

‘You’ll be get paid and get access to equity and you’ll have a chance to be a key part of our mission, but what’s really behind you wanting to join [company]?’

I often ask this of candidates, and particularly sales candidates who have tried to convince me of their suitability using an elegant explanation. I’m asking them to be vulnerable. Not to be uncomfortable because at this point they almost have the job. I want to know their incentives for joining me and the team.

And for the most part, this question unlocks a conversation about how they are trying to get their mojo back after a business they were leading failed. Other explanations can include they were let go due to their performance or that they are trying to find their way and they have skills, they just don’t know exactly how to apply them but they are drawn to the company’s vision.

These reasons could be cause not to proceed with the appointment but that’s not my perspective.

These explanations form the basis for how I can build incentives with a new ally. And the logic is simple. We (and the company) will be more successful if we can help one another achieve their ambitions over a two to a three-year term. This simply won’t happen if the normal financial incentives are offered.

Incentives are powerful. Get to know them for each of your people and anyone thinking of joining the team.

9. Go with paid auditions

There’s an excellent chance you won’t get this hiring process right the first time. I’m a big fan of getting really good at paid auditions and here’s why.

One last thing …

Don’t underestimate the importance of great sales and business development leaders. And never underestimate how difficult they are to hire. Take time to understand pedigree, incentives and fit. It will help your business accelerate momentum while saving it from making decisions that could be terminal.

by PhilHSC

6 STEPS TO REPAIR CUSTOMER RELATIONSHIPS

I hate losing customers.

And it’s one thing to lose customers if you sell to consumers where the universe of potential customers is high and attrition is expected. It’s quite another if your business sells to other businesses. In these companies, a relatively small group of customers create the majority of the value and it can take months, if not years, to develop those relationships.

Losing one of these customers can be devastating. And in worse case scenarios losing a customer can start a chain of events that can be terminal.

This issue came up in my slack channel where I support 37 entrepreneurs.

The loss of the customer came about through a growing company experimenting with using sub-contracted talent to scale the delivery of its work to customers.

When done well, this can be a very effective solution but in this case, the result was damaging to the companies brand and they had lost the customer.

I have been in this situation before. Many have too. Losing a customer comes with shock, disbelief and a grieving process. These emotions also (usually) come with a lack of perspective as the founders are left to quickly diagnose and repair the issue by themselves.

That didn’t happen this time.

In a matter of hours, members of the slack community contributed valuable insights to quell concern, exercise compassion and set the founders on a path to repair the customer relationship.

Pre-repair thinking

The community offered three observations as part of level-setting before we talked about the repair process.

First, it’s happened to all of us (and we're here to help).

Second, it is impossible to understand all the contextual and environmental factors that led to the customer disengaging. It is easy for founders to believe they are the singular point of failure (which is exacerbated by processing the event of loss by themselves in an echo-chamber). The reality is that this is often not the case.

And third, some customer relationships cannot be repaired. Be OK with this.

Repairing customer relationships 

Here are the six battle-tested steps I shared with the founder whose business had been impacted.

1. Identify how far short you've fallen

A lack of perspective makes it easy to think we have fallen a lot further short than is actually the case. As a result, conversations that can unlock perspective with people at the customer organisation is the essential first step.

The effectiveness of these fact-finding conversations hinges on asking carefully crafted questions, for example:

I understand that we may have dropped the ball. I'm here to help take your [talent/process/product/technology] to the next level. How can we help you and your team with that?

From your perspective, what would you like to see from my company as the next step?

2. Apologise and acknowledge that you've fallen short

Once you understand how short your product or team has fallen, offer an authentic apology. Apple does this well, and personally.

Here is an example.

3. Own it

There might not be a way to repair a customer relationship but I’ve found that to rarely be the case if founders act quickly to re-establish credibility.

This comes down to proposing a detailed strategy to rectify the issue. And by strategy I mean doing (re)work for free that is hyper-clear, specific, time-bound and measurable.

4. Get stuck in immediately

Issues aren't like wine, they don't age well with time. Move to understand the context (step 1) and exercise the plan (step 3) as quickly as possible. Delaying will only put the customer relationship further at risk.

This step is usually where people stop. Don’t stop here because you’ll be leaving value on the table.

5. Add adjacent value

Making amends for whatever the issue is will help but make sure you're adding other value to the people impacted by whatever the shortfall was. This will help your true value and values shine through and help them be reminded of why your team or product are awesome.

This can involve sharing content, providing specific advice (for free) about topics that are important to them based on your domain expertise and inviting them to events as your guest, to name a few.

6. Get the issue out of your head

You don't have to post it publicly but write about the issue, how and why it came to be and the steps you're taking to sort it out.

The consequence of not doing this is that it will fester in your mind and you will be the only one who learns from it.

And IF you do decide to publicly post it somewhere, it will help others to avoid the same mistake. And it might just help your client see how humbling the experience has been for you.

One last thing …

Losing a customer is hard but don’t lose them alone. Ask for help in repairing the relationship regardless of whether it is B2C or B2B.

We have all been there. At the very least you will learn from the experience. At best, you will recover the relationship, generate more value (for them and you) and turn that customer into an advocate.

by PhilHSC

GROWTH THROUGH AFTER SALES SERVICE

When it comes to sales entrepreneurs and salespeople often have the wrong end game in mind.

Their focus is on closing deals. And if in a startup, their end game is to close those deals as quickly as possible to develop enough momentum to convince investors to back them at the next financing round.

This is the right thing to do for the time. Well, sort of.

When a startup cracks to sales code for their target market, sales processes can scale and that means much-needed revenue can be generated.

The only issue is that most sales operations that have this endgame in mind (scaled or not), leave value on the table.

The punchline is that they miss out, forget about or de-prioritise the final step of selling: Turning each new customer into an advocate.

Word-of-mouth marketing is born at this step.

I think about it like this: Close a deal means you get paid. Closing a deal and turning a new customer into an advocate instantly increases the likelihood of another sale.

How to create customer advocates

I use two principles to create customer advocates. They are grounded in genuine concern for the success of my customer because I know my success and that of my company is inextricably linked to my customer’s success.

The first principle is to go all-in on after sales service. The objective is to make customers so overwhelmed with prompt and convenience-rich service that they can’t help but talk about you and your product. In practice this means:

• Laying out a rapid path to show that the product I’m selling lives up to the promise
• Widening the group of people working to implement the product (beyond the person who did the deal on the customer side) to create relationships and communication channels that will help me, help them be successful
• Being available 24/7 via phone to answer questions and provide support

The second principle is more an accidental habit. I enjoy learning about the people with whom I do business. And I know that work is one part of life and for most of us, there is family and also a hobby, interest or side-hustle.

I invest time asking questions to learn about these things. Because while the product we’re discussing is interesting and will no-doubt create value, there is always more to life.

Many salespeople won’t reach out to wish a customer happy birthday, send them a YouTube video about their hobby that will make them smile or offer to connect them with another relationship that might add a new dimension of value to their life.

I do because I enjoy it. And because it’s essential to building trust and sustaining relationships.    

Case in point - WorkInc

A great example of these principles in action is WorkInc, the company that operates inkl’s Sydney office.

The Saturday before I officially joined inkl I needed to find an office. At 7:30 am on the following Monday I called the three co-working spaces I had researched on the weekend. Only one had a mobile phone number on their website.

The first one didn’t answer (and did not have a voicemail service)

The second one didn’t answer (but I left a message)

The third one had a mobile number on their website. I SMS’d the number and outlined my needs.

Four minutes later I had a reply and by 8:45 am on the same day I was in an office. By 9:00 am I could access Wi-Fi, 24/7 fingerprint access was sorted and I was joining the daily standup.

During that week Tom, the General Manager, took me for coffee to learn more about inkl. He also learned about my side hustle and offered to find me a place to record my podcast.

I became a huge advocate for WorkInc and have introduced a number of new customers to Tom as a result.

Starting at the beginning with new salespeople

As I was writing this post and thinking about customer advocates I was asked why people are afraid of working in sales.

Starting in sales is an obvious precursor to growing in sales and creating customer advocates.

So why are people afraid of working in sales?

I think there are four reasons.

First, they have never been shown how to create value for another person or experienced the exhilaration when that person appreciates that value.

Second, they are scared of being told no.

Third, they haven’t found something they would love to sell.

Fourth, they equate being in sales as being a used car, snake oils salesman.

Let’s do some myth busting.

On creating value

Look back on the last time you did something for a friend, colleague or family member that genuinely helped them.

Their reaction was genuine, one of surprise and gratitude.

You might have saved them time, moved them further away from fear or closer to happiness.

They may or may not have expected it but it was you who did it.

You met a need.

This is the heart of great sales.

On being told ‘No’

You will always hear more No than Yes in sales.

No of it is personal and there will be factors you can see and those you can’t which influence a ‘thanks, but no thanks’.

Sales can be a grind and it’s made more difficult when your expectations are unrealistic. I expect on my run rate business to be told ‘No’ 200 times for every ‘Yes’. I expect to hear No 50 times for every yes on strategic deals.

Does it play out that way?

No.

But the mindset is important to help push through the grind.

On loving what you sell

If you’re not 110% bought into the product you’re selling, stop selling it and move on.

It’s that simple.

And don’t mistake fatigue for not loving the product. We all get tired. The grind takes its toll.

BUT if you stand up a little taller and talk a little faster when you’re pitching the product, no matter how tired you are, you still love the product.

Turn off your devices.

Get some sleep.

Exercise.

Eat good food.

And show up the next day.

On how you perceive sales

I wrote about how I felt when a manager first told me I thought I was a sales guy. It’s not an exaggeration to say I freaked out.

Many people hold onto the persona of a used car, snake oils salesman as what salespeople are like.

The best salespeople are focused on their customer's long-term success and doing whatever is necessary to turn them into their advocates.

Because their success depends on it.

You will find these 8 characteristics in the best salespeople:

1. Use data to form compelling pitches
2. Understand the value of time (and don’t waste any of the customer’s time and they optimise their own)
3. Deliver value three or four times before a sale is made
4. Do the unscalable (like keeping an eye out for insight and resources that will make their prospective customers’ life easier or travelling 20 hours to make an important meeting)
5. Respond quickly to questions and issues
6. Teach their techniques and communicate lessons learned to their teams and organisations to a) bring the voice of the customer closer to product development, and b) increase the number of minds that can help get a prospective customer over the line
7. Excel at after sales service by personally being involved in implementation, investing time to talk with junior people using the product at customer organisations (to answer questions and address issues) and being available to answer questions. On this last one, everyone at my customer organisations has my cell number and they can call it anytime, no matter where I am in the world.
8. Look nothing like a used car salesman

Two last things…

The best online course I’ve ever done to brush up on sales tactics was created by Scott Britton. You can find it on Udemy here.

If you’re looking for sales coaching from one of the best in the business, reach out to Sidney Minassian at Sales Native.

I highly recommend both resources and I hope they help.

by PhilHSC

HOW TO INCREASE SPEED TO 'YES' OR 'NO' IN SALES

There is only one thing I like more about sales than closing deals. It’s getting a quick ‘thanks, but no thanks’.

And when I say closing deals, I’m not just talking about revenue and partnerships, I’m talking about achieving buy-in from colleagues for decisions on internal projects.

Over the last five years, I have honed a technique to help get to a quick YES or NO from potential customers, investors and colleagues. A colleague overheard me using it this week and twigged to the fact I was using it regularly to good effect so I thought I would share it.

It is not rocket science but it has taken practice. On reflection, I started using this tactic because I found myself in countless meetings with people who didn’t know how to ask the right questions to close deals.

As I dug deeper into why this was happening, it seemed that the people I was meeting had lukewarm interest in engaging in a sale or had received no real training in how to have sales conversations. Either way, they were leaving it to me to drive the meeting.

I wanted to learn why people were saying ‘No’ so I could evolve the pitch and product. And as I’ve written about before time is my most precious resource and I wanted it back.

I had more people to pitch and while developing relationships is essential, wasting time to talk about unrelated topics before getting to business in the last 10 minutes of a one-hour meeting was (and is!) a waste of time.

Increasing the speed to YES or NO in sales

Here are the four steps to the tactic I use.

Step 1

Constrain meetings to signal more will be achieved in less time. If your default meeting duration is one hour, make it 45 minutes. If the default ‘short’ meeting is 30 minutes, make it 15.   

Step 2

Open each and every meeting with ‘This meeting will be successful if…’ and list the desired outcomes. I learned this from Jeff Weiner (CEO at LinkedIn).

Step 3

Say this:

‘Thank you for taking the time to meet today.

I know your time is valuable and I’m sure you would like to respect mine as well.

The reason we are meeting today is the discuss [insert topic].

We would love to work and partner with you.

If you feel the same I would like to understand the steps we need to take to start creating value for both of our businesses.

If you don’t think we can work together, let’s talk about why that is.’

Step 4

If business is to be done, specify and agree on the date to finalise the next immediate step in the process. Diarise it and nail it.

There will undoubtedly be other steps but get the people in the meeting focused on the next step and the rest will follow.

If business won’t be done, thank them for their time and then do the unexpected.

In two weeks time from that meeting, send them some value. It might be a study, an article or a video you found that they will benefit from.

Why do this?

Because 'No' only means no, today and by extending value, your stock just went up a couple of points in their mind.

Two last things …

First, in reading these steps you might think that this tactic is too abrupt. I can assure you that investors and seasoned sales and business development people respect this approach because they also understand the value of time.

Second, when people talk about increasing sales they usually mean increasing the momentum of sales. This means widening the universe of people and companies that are prospective customers, partners and influencers.

Momentum comes from rapidly understanding why people will or won’t buy, invest or partner.

Increase that momentum by giving that universe of prospective customers and partners permission to be candid and start generating value or move onto the next thing. Either way, this will accelerate how quickly you can sell and evolve your pitch and product.

And at the end of the day, people get time back in their day, something we all want more of.

by PhilHSC

THE PYRAMIDS AREN'T AS TALL AS YOU THINK

The moral of this story is that you can reach just about anyone online.

This is an important idea when you're developing a business. It doesn't guarantee access, nor does it mean that everyone you want to speak with will want to speak with you. It means that you can accurately identify and start plotting paths towards people who you can add value to whatever you're creating.

This is particularly useful if you want to reach titans of your industry. Their track record speaks for itself and a moment of their time can change the trajectory of new companies.

From the outside, it’s difficult to tell how they tip the scales for previously unknown companies. It might be their experience, network, capital or a combination of all three.

And as they become known for helping these companies, it can seem as though your chances of connecting with them decrease. That’s true but that doesn’t mean it becomes impossible.

I’ll never forget one of my closest friends saying ‘the pyramids aren’t as tall as you think’ after we walked out of a series of meetings with people we considered titans. Some were entrepreneurs, some investors, while others were friends of friends of friends. The one characteristic they share is that they're at the top of their craft. They are at the top of the pyramid.

They tipped the scales for us, as they had done for many others. And as excited as we were with the outcome, we had to work hard to create the opportunity to have these conversations. We had been actively practicing the 51% rule for some time. They didn’t just come to us.

The 51% Rule

The number one rule in relationship management is the 51% rule.

The essence of this rule is simple. In every meeting value is created. It's your job, in every meeting, to be the one delivering 51% of that value. In other words, your objective is to always create more value for the other person/people in the room than you receive.

Why? Because developing a business is a strategic pursuit built on the value you bring to relationships. And consistently delivering 51% of the value has a cumulative effect where over time a large proportion of those people you invest in end up returning the favour, oftentimes in unexpected ways.

Here's how I live the 51% rule:

• By helping. My opening gambit in every meeting is to ask 'How can I help?' and then do what I said within 24 hours.
• By listening. I practice being the last to speak in meetings so I have the best chance of understanding context and then adding value.
• By connecting. I'm quick reach out to someone new to cultivate a relationship when I'm certain I can offer them value. I'm also quick to connect people who I instinctively know will gain value from meeting one another. I'm even quicker to say 'thanks, but no thanks' so I don't waste someone else's time.
• By sharing. I constantly think about who in my network would benefit from content I'm consuming (articles, posts, podcasts) and sent it to them.
• By celebrating. I celebrate birthdays of people in my network because it's their day!

This rule also works in the opposite direction. Consistently being a net absorber of value means the likelihood of your network supporting you takes a nose dive. Don’t be that person.

The wrong way to climb pyramids takes little effort. And you don’t climb far.

It ignores the simple rule that humans engage and prosper through relationship.

These people cold-call and request value from others where a pre-existing relationship doesn’t exist. They do this in the hope a few will respond. If you've ever been on the receiving end of LinkedIn invitations which lack context or a reason for connecting, you know what I mean.

I don’t invest a moment thinking about the sender’s intent when they pressed the ‘invite’ button. I decline these invitations immediately and just in case you’re wondering what I’m thinking, it’s this: ‘My network is valuable. If you want access to those people, you can work for it’. That’s just the way it is.

The lesson here for people trying to climb the pyramid this way is that the internet and social media remove context and intent.

Online research might surface some insight about a person’s work history, relationships or hobbies but it will almost certainly be void of what’s happening in their life today, their context. And it’s for this reason that your intent, no matter how genuine, isn’t likely to mean much when you try and make contact.

5 rules of climbing pyramids the right way

Developing business isn’t rocket surgery but it does take patience and the built-in thirst to create value for customers and partners.

1. Until you meet in person, you’re a stranger.

Don't assume for a second that just because you can read about someone's experience online that they will want to engage with you. You're a stranger and in order to gain relevance among their priorities you need to dial up the 51% rule.

2. Piquing attention requires you to have something interesting to say

Time is everyone's most essential asset. If you have nothing to say, wait until you do. First impressions count and so does every one after that.

3. Relationships are the most important filter

Leverage LinkedIn to understand how your relationships can help you open conversations with people you don’t already know. A warm introduction is 10x more likely to result in a first meeting compared with a cold call.

4. No just means no today

Rejection is a big part of building a business as I wrote about recently (Expect To Be Told ‘No’ 500 Times Before You Make A Dollar). If you’re told ‘No’, understand why you got that answer and make a plan to re-engage in 8-12 weeks time. Rinse and repeat. This is resilience in the making.

5. Always be optimising the 51% rule.

Steal my tips for the 51% rule, create your own or blend them together. Which ever way you go, just make sure you are always the one creating more value. It pays dividends over the medium and long term. Ignore it at your peril.

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If you learned something let me know by leaving a comment, thanks!

by PhilHSC

EXPECT TO BE TOLD 'NO' 500 TIMES BEFORE YOU MAKE A DOLLAR

I count how many times I get told 'no'.

'No' from investors.

'No' from potential customers in B2C campaigns.

'No' from potential customers in B2B campaigns.

'No' from potential partners.

And here's what I've learned after pitching investors over 700 times and running more marketing campaigns than I can remember.

For every new business model you should expect to be told 'no' 500 times before you make your first dollar of monthly recurring revenue (MRR). 

500 no's for $1 MRR.

This isn't about getting someone to pay you once.

That's easy.

This is about consistently delivering repeatable value regardless of whether you're running free-to-play, freemium, subscription or any other model.

If you nail the first dollar of MRR before you reach 500 no's, you're onto something. If not, keep testing and evolving. And don't bother whinging about being rejected (like I heard three times today).

Building something new is a state of mind. It's hard, worthwhile and opt-in.

Remember the 'opt-in' bit.

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Please consider tipping if you learned something (every cent goes to Soldier On).

by PhilHSC