Reassess sales strategies at each stage of growth
5 Reasons to Re-Evaluate Your Sales Strategy Before Pursuing Funding
Startup sales don’t follow the “If it ain’t broke, don’t fix it” rule. The tactics that helped you get through your first phase of growth may not provide the momentum you need to take the next step. Before you go to investors, take some time to re-evaluate your sales strategy and consider whether a new approach might bring the results you need.
Don’t feel anxious about making changes right before you ask for money. Investors want to see you take the initiative to make something more of your business. People with deep pockets (and the experience to match) understand that founders who embrace change tend to succeed more often than founders who hesitate in the face of opportunity.
Watch for these warning signs to decide whether your sales strategy needs attention before you seek funding:
1. You don’t have a sales roadmap.
Conversations and coffee make for great sales tools in a business’s early days, but they don’t scale well. To get your products and services in front of more prospects, you need to know exactly how people find your business, what their consideration phase looks like, and how to take them through the final part of the funnel.
Your marketing team can handle the top of your funnel. With your sales and marketing teams aligned, you can see the entirety of your customer life cycle and identify opportunities to remove friction. This top-down view will help you make decisions with more context as you address the specifics of your sales strategy.
“Unfortunately, too many companies let marketing and sales operate as entirely separate entities,” says Sujan Patel, SaaS sales expert. “This is a huge oversight and missed opportunity, because together, they are so much more than the sum of their parts. They complement each other in a way nothing else can.”
2. You don’t focus enough on your existing customers.
Now that your startup has a bit of clout, transfer some of your energy from acquiring new business to start looking more closely at your current customer base.
“Existing customers are easier to sell to — by a long shot,” says Sophia Bernazzani of HubSpot. “You’re 60-70% likely to sell to an existing customer, compared to the 5-20% likelihood of selling to a new prospect. So if your company isn’t cross-selling and upselling, you’re just leaving money on the table.”
Show some love to your early adopters by putting more resources toward customer retention tactics like email marketing, active social media management, content marketing, loyalty programs, and referral rewards. Give people a reason to tell their friends about your brand. Pump out content that takes your relationships beyond a transactional level. The more connected your customers feel to your brand, the more your sales will reflect those positive feelings.
3. You’re facing new opposition from prospects.
You may be the market disruptor, but other companies won’t sit still while you move in on their territory. Existing market players and other startups in your arena will respond to the pressures of your growth by using new tactics to keep prospects away from you. As your sales environment evolves, find opportunities to provide answers for the questions your competitors may plant in prospects’ heads.
If you’re not sure where to begin, why not ask? Keep lines of communication open with your customers. Send out email surveys to find out more about why they chose your products over others. Talk to your bigger customers (and a few smaller ones, too) to see which parts of your business stood out to them. You may discover that the things you believe to be your market differentiators matter more to you than they do to your customers.
4. You rely on your abnormally high closing rates.
Good companies close more frequently than bad companies. That said, if your industry averages a closing rate of 18%, you shouldn’t assume that your market-disrupting 48% will stand the test of time. Sales will always be a numbers game, which means you and your salespeople need to get more sales meetings to set a solid foundation for growth.
Turn more of your preliminary conversations into closing opportunities by adding more personalization to your limited opportunities. Don’t just address prospects on a first-name basis and call it personalized communication, though. Instead, lean into technology to create customized pitches that will resonate with your target audiences.
“Innovative marketers are starting to refine persona-based tactics with the help of machine learning and AI,” says Ryan Myers of sales enablement company Regie.io. “Using natural language processing and generation, they can create more engaging and personalized email subject lines than most humans can.”
5. Your numbers are slowing down.
Declining growth should set off every alarm bell in an office. You should be growing quickly, both in users and in revenue. A slowdown could trace back to several causes — perhaps you burned through your small initial market, or mixed reviews made people question your quality control — and it’s up to you to figure it out.
Don’t be afraid to gamble on yourself. You found early success for a good reason, so if that success begins to falter, believe in your ability to stay ahead of the demands of your market. Talk to your mentors and investor partners about what they see in your future. Approach your growth with an insatiable hunger, and with enough digging, you’ll find a nest market opportunity to pursue.
Once you come up with a new sales plan, present it with pride to investors as you talk about the future of your business. If you get it right, the next phase of your growth could make your early days look slow by comparison.