Startups fail for all sorts of reasons. But they all come down to the same thing: no sales = no revenue = out business.
If you're not closing deals, you're going out of business.
And creating an effective sales program in a B2B startup is especially difficult. There are lots of mistakes you can fall into that seriously hurt your sales. These are common mistakes, and they can put a big dent in your revenue.
Fortunately, they're easy to avoid. You just have to know what to look out for.
Here are six common B2B sales mistakes that can take a big toll on startups, and what you can do to avoid them:
1. Targeting the wrong customer profile
This is especially common among new founders. If you have a great startup idea, you probably have a clear picture of your target market. You know who needs your product.
So why are you selling to other markets?
We see this a lot with small B2B startups. Closing a deal with an enterprise customer is hard. It takes a long time. It requires multiple meetings, tons of emails and phone calls, and a lot of patience.
Some founders try to bypass this process with shortcuts. They sell to smaller clients hoping to close deals quickly. Or they avoid pitching big companies because they know it's going to be a grueling process that probably ends in a "no."
But targeting the wrong kind of customer isn't going to help you. Even if you close the deal, you're not going to meet that customer's needs as well as you'd like, because you're not set up to sell to that kind of company.
If you have a solid customer profile, great. You're ahead of the game. Use it to run your outbound sales program.
What if you don't have a customer profile?
Then you have work to do. You need a detailed, accurate, and useful ideal customer profile. Don't confuse this with a buyer persona; it's not the same. It's more data-driven and less speculative. You don't need a name like Pauline Purchaser. You don't need to say that Pauline is an avid rock climber.
What you need is data and a framework for summarizing that data. We have an extensive walkthrough of how to create a useful ideal customer profile. If you're not sure where to start, start there.
2. Wasting time pitching gatekeepers
Mistake #1 is usually perpetrated by founders. Sometimes sales managers do it, too. But mistake #2 comes down to salespeople.
When you finally get someone on the phone, you want to make the sale before they can hang up—so you start the pitch. Sometimes this strategy works.
But if you use this method, you run into a fatal mistake: pitching the wrong person.
In B2B sales, the first person to pick up the phone (or maybe answer an email) is rarely the person who makes a buying decision. It might be the decision maker's assistant or maybe a specialist below them. Or an office manager. Even someone in the purchasing department might not be the person with the authority to say "yes" to your sale.
More likely is that this person answers the phone so they can say "no" to salespeople. They get calls like yours all the time, and they're practiced in keeping people like you from talking to the decision maker.
Can you blame them? If the decision maker took every sales call, they'd never get anything done.
So you have to get past the gatekeeper.
One of the best ways to do this is to not start your pitch right away. Just ask to be connected to the decision maker if you know who it is. If you don't, ask politely. Even something as simple as "Could you tell me who makes the decisions on software purchasing, please?" can work.
(Note: that "please" is crucial. Being polite gets you places.)
Some gatekeepers will pass you through right away. Others will be more aggressive and ask what you're calling about or if they can help you. This is where it gets tricky, and every salesperson will have their own way to deal with this situation.
For example, some use the "I'll send something over, but first I'd like to see if it's something that [decision maker] is interested in. Could you let them know I'm on hold, please?" tactic.
Others will go with "Before I start sending lots of emails, I'd like to see if [decision maker] is even interested in a deal like this. It'll save us all a lot of time. Would you connect us, please?"
There are all kinds of ways to deal with this situation.
But the point is that when you find yourself talking to a gatekeeper, you need to get through to the decision maker as fast as you can. Gatekeepers don't close deals. Stop wasting your time talking to them.
We cover some more tips on reaching the decision maker in The Ins and Outs of Effective Outbound Sales Calling. Be sure to check it out.
3. Focusing on your company
Lots of new salespeople make this mistake. But it's not just sales newbies. It's founders, managers, and marketers, too. And it's understandable. Your company does awesome things, and you want to tell people what you can do for them.
But that's the wrong way to go about it.
Sales is about the customer. It's about the problems they face, the issues they need to solve, and how they can benefit from your product.
Too many salespeople focus on the features of what they're selling. But customers don't care that your email automation solution syncs with Gmail 2% faster than any competitor out there. They care that their salespeople get slowed down by waiting for attachment downloads.
This is why you need to take the time to get to know your prospects and their problems. If you're spouting off features and benefits, you sound like every other salesperson out there.
But if you understand your prospect's problems and present not just features and benefits, but the solutions to those problems, you're going to get through. That's what people need to hear.
Here's another thing that gets in the way of understanding your prospect: trying too hard to move the sale forward.
This is easy to do when you're a new startup. You're excited about making a sale and bringing in revenue. I get it—that's an exciting time. But pushing the sale forward too quickly won't help you.
When your prospect starts sounding interested in your product, don't jump immediately to pricing. You'll scare people off before you get the chance to convince them that your product will make their life better.
Just take it slow. Get to know your prospect and see what they're struggling with. Take the time to figure out how you can really help them, not just add them to your customer list.
4. Rushing to offer a discount
What do you do when a customer says that they can't afford your product? Or that it's more expensive than one of your competitors' products?
If you immediately offer a discount, you're not doing yourself or your company any favors.
Discounting is an easy strategy. When you can provide a better product and a better price, how could a prospect say no?
Unfortunately, that's a bad way to do business. It might feel like a good sales tactic, but it's almost never the right way to go. Why? Three reasons:
1. You're reducing the customer's lifetime value before you even make a sale. If you use subscription pricing, you could be losing tens or hundreds of thousands of dollars over the customer's lifetime. That's a serious hit to your bottom line.
2. If you need to offer a discount to close a deal, you're selling to the wrong client. Your ideal customers make buying decisions based on value, not price. And as a salesperson, you need to be able to present that value in a compelling way.
3. Once you start offering discounts, you'll probably make it a regular practice. And then you run into problem #1 again. And again. And again. You're bringing in revenue—but not nearly as much as you could be.
Mark Hunter says that salespeople who offer discounts aren't salespeople at all. That might seem harsh, but it's worth keeping in mind. Don't offer discounts. And if you do offer them, make sure to not rush into it. Do everything you can to close the deal at full price first.
5. Overloading salespeople
What should your salespeople be doing? This isn't a trick question.
They should be selling. That's what they do best. And it's how they help your company the most. You already know this—that's why you hired them in the first place.
So why are you asking them to do so many other things?
B2B salespeople do all kinds of things other than selling. They generate leads, prospect, qualify, follow up, and sometimes even work through the implementation process. But that's not what they do best. And it's not a good use of their time.
You could hire more people to do all of that work. But that's not reasonable for most B2B startups. Bringing on a bunch of new specialized employees requires a ton of resources. (And hiring SDRs is often not a great business decision.)
That's where outsourcing comes in.
You can hire an outsourcing firm to handle research, lead generation, appointment setting, and more. Highly trained, effective outsourced sales development reps can get more done than a new lead gen specialist that's still learning the ropes at your company. And your salespeople can concentrate on selling.
When you only have a couple salespeople at your startup, it's tempting to have them run the entire sales process. And they can do it—but it's really inefficient. It's a terrible use of time. And it's a waste of your money.
Hire someone else to take care of the things that are sucking up your salespeople's time. Let your salespeople do what they're good at.
6. Not using a CRM
At what point in your company's life should you buy a sales-focused CRM?
This one is a trick question. Because every organization that's selling should use a CRM. More established organizations know this. 91% of companies with 11 or more employees were using a CRM.
But don't wait until you hit that number to invest in a CRM. You need one now. If you're selling and you don't have a CRM, you're missing out.
A CRM has a huge number of wide-ranging benefits for your company. Here are just a few basic ones:
- Contact histories make handoffs between salespeople (not to mention different groups) easier.
- Email automation saves sales reps dozens of hours.
- Automatic dialing makes calling easier and more efficient.
- Pipeline analytics help you accurately forecast sales.
- Metrics show you which salespeople are performing so you can capitalize.
A CRM comes with lots of high-level benefits, too. Your entire marketing and sales group can use it to align their efforts on account-based or traditional tactics. And it's a valuable source of a ton of information that you can use to improve your sales process.
It might seem like an extraneous expense when you're just getting started. But it's an invaluable tool that will deliver huge returns.
How do you choose a CRM? Don't worry, we have a guide for that.
Focus, focus, focus
All of these points are built around focus. Keep your salespeople focused on selling. Focus on the right customers. Focus on explaining and delivering value.
If you stay focused on what matters, you'll make sales and grow your company from a B2B startup to an established enterprise. It just takes some patience—and good selling.