I’ve seen more startup pitches than I can remember for new ideas seeking funding. And it seems it is time to review the one key success indicator that causes more startups to fail. Sales Traction.
What is Sales Traction?
Sales traction is often sales or revenue; but it isn’t always. For a startup, traction is generally a convincing and real set of business proof points that a market of customers is interested and that some customers are committed to buy when the product or service is available in the form they expect.
Beyond that, it’s a measure of intensity and timing. How strong is demand in terms of customer interest and when will positive cash flowas a result of the demand.
Key to Traction
The path to traction is sales. Startups need to have one person, often one of the founders, who can effectively communicate with customers and demonstrate the product. Communicating is not spewing of technical features and capabilities at a captive customer , but the natural listening and clarifying of the customer’s needs in order to develop a customer-specific use case and workflow which shows the company’s product and how it uniquely satisfies the customer need. This discussion dialog is in the customer’s language, not in the language of the company or its product terminology.
This person also must be able to naturally, yet aggressively ask for the sale or close the deal.
The resulting startup deal may a commitment by the customer to buy now. Or that the customer commits to work together to complete the product offering or fill capability gaps to more fully satisfy the customer’s need culminating in a purchase. There are other solid and realistic commitment examples that demonstrate traction, but one common thread is they are based on trust built during the selling process so that they are not easily switched out for a competitor.
Let me make that list again. As a startup, your sales person must have the ability to:
- Understand the product
- Have the ability to listen, more than talk
- Ask probing questions to clarify the customer’s need
- Avoid talking about features and product capabilities
- Quickly synthesize one or more work-flows and use cases where the product satisfies the customer need and articulate that in the customer’s language
- Demonstrate the workflow, using the product and the language of the customer
- Ask for the deal, close the sale or gain a written commitment
- Shut-up, (that’s right) be silent and allow the customer to think and make a decision
The Art of Listening and Its Effect on Sales Traction
If your sales person does more talking than listening, you must find a new sales person. Communicators are not talkers. Communicators speak clearly and with purpose, and are silent with purpose. Talkers fill every gap of silence with words that distract and prevent the customer from building trust with your company.
A talker is the worst kind of sales person a startup can have.
It’s imperative that the prospective customer think over what he just heard and saw. Customers need silence to consider the benefits which are not yet fully understood or articulated in a startup. Startup marketing is learning what the true positioning and value proposition is from these early customers, and it requires listening to learn what that is. Learning the value proposition from these early customers by listening is invaluable to the next sale, and so on.
A good sales person knows to be silent, so trust is built, commitment comes, traction is generated, investors will invest and then Marketing can build better positioning, messages, pitches. It truly does happen in that order.
Friction Indicates a Problem
The opposite of traction is effort that breaks the coefficient of friction– the kind that burns up lots of energy, but somehow slows down progress. If your sales person spends lots of energy that seems to be generating friction in the business development process, your company has a problem. This costs you time, money and opportunity. Fix this FAST.
Some obvious indicators that you have a traction problem are when your sales person:
- Won’t or can’t work independently
- Won’t learn the product enough to do a demo
- Asks to build out a sales team before he/she can start to sell
- Asks to hire a demo jock, or a sales application engineer to demonstrate the product
- Says they need to stop, invest and set up a CRM before they can generate any sales
- Spends most of the week perfecting elegant PowerPoint slides about their activity in tables and rows of fictitious customers called “highly qualified prospects”
- Doesn’t spend much time on the phone calling prospects
- Doesn’t get out of the office and in front of customers
- Never invites peers or the CEO on a sales call
- Won’t let you speak to any of the customers directly
- Says that they need more marketing support
- Doesn’t use, or effectively use, the marketing tools they have
- Can’t state the positioning, marketing messages or value proposition that Marketing has created.
- Asks for better leads (come on, in a startup, your sales guy better know how to generate leads!)
- Asks to take a developer into sales calls with him or her (which means that precious resource is not coding!)
That last one is the ultimate failure, because it means that the sales person doesn’t recognize or feel a sense of urgency nor do they understand the affect their taking another person’s time, a product developer, has on the rest of the team, its morale, and product delivery schedule.
Startups can’t allow anyone to slow the organization down, which lowers morale across the organization. If you see any one of these signs at your startup, you have the wrong sales person and need to act quickly.
Reality is Easy to See
Your sales person needs to be generating TRACTION in the market place. That means named customers, with written and substantiated-to-the-CEO, commitments to engage with your product or service now or very soon. You know the traction is real because it will be obvious and public. You will be able to feel it, touch it, and speak to it. Your sales person’s number one goal is to develop committed relationships with as many named customers as possible and then quantify them in a way that demonstrates:
- the intensity of the interest and demand in the market
- the timing of the demand for your product or service
To your investors, traction is gold. They will want to call talk to these customers and understand their commitment in detail. No smoke and mirrors are allowed in this part of the game. If you see smoke and mirrors so will investors. See the point above about “building elegant PowerPoints” to show company logos and fake activity obviously trying fabricate “traction.”
You Got It, Now Make It Happen
By now you should have this concept. If you are thinking of refuting this discussion – you may not be a good startup sales person. Traction is not activity. Activity may drive traction, if it is the right activity. Like everything in a startup, move fast, fail fast, learn fast, succeed fast. If you are slow to correct a sales problem, you give the market to the competition.
’nuf said. Any stories to tell? leave them in the comments below.
Image credits: Yokahama and Wikimedia.
