101. Decoding Startup Sales Strategy 🧐 Michael Regnier Interview

Introduction

Sales strategy is often a neglected aspect of many tech startups, especially those led by technical founders who may not see sales and marketing as their core strengths. However, integrating a sound sales strategy into your business operations can greatly impact your startup's success. This article encapsulates the strategic approach to sales based on a conversation with Mike Regnier, a sales strategy expert from Sales Design and Delivery. 

Mike Regnier has been an executive sales manager for small companies for twenty-five years and has helped many entrepreneurs "crack the code" in unlocking their rapid and sustained growth.  As a result of his successful exits, he was encouraged by several Private Equity and VC groups to create Sales Design & Delivery, his sales-scaling consulting firm, in 2012 and has been helping small companies achieve their potential ever since.

Defining Sales Strategy

Sales Strategy is an approach to selling your product or service. It involves identifying your target audience and determining the best approach to reach them. It includes mapping your go-to-market message, the value proposition of your service or product, and the pricing model. Understanding your audience and how to capture their attention, along with iterating your sales plan, plays a key role in crafting a valuable and effective sales strategy.

Targeting Customers and Finding Champions

The sales process begins with identifying the right person or decisionmaker within a company. Conducting proper research and interacting with the target audience is key to understanding their needs and expectations. Start by hypothesizing who might be interested in your value proposition. Then, with each interaction, systematically identify and reach out to other potential decisionmakers within the organization. This ensures you're not solely reliant on one individual and allows you to cover more ground within the company.

Making the Sales Pitch

First impressions matter enormously in a sales pitch. Showcasing a deep understanding of the prospect's needs, and demonstrating how your offering can address those needs, is crucial. Avoid focusing too much on your product's features, instead, emphasize its benefits and value to the potential client. Use credible data and compelling narratives in your pitch to quantify the value your solution offers.

Gaining Traction

Breaking down barriers can be hard, especially with potential clients who've put up walls to avoid unsolicited sales pitches. To get around this, consider two strategies. First, be creative and rise above traditional communication channels. Attend trade shows and conventions where you can interact with decisionmakers face-to-face. Secondly, leverage personalized outreach techniques to capture potential clients’ attention

Moving Forward

The sales process is not simply about convincing your potential client to buy from you. It involves helping your prospective buyer navigate their approval process. Providing an approval kit or materials that equip the potential buyer in pitching your product to their team can be quite effective. This often involves outlining the potential return-on-investment and suggesting an implementation timeline, among other key aspects.

Final Thoughts

Building a comprehensive sales strategy as a tech startup isn't easy. But with these pointers, you're better equipped to take on the sales-hunt journey. This includes defining your sales strategy, identifying your target audience, refining your sales pitch, and walking your prospective buyer through their approval process. Remember to keep iterating your approach based on the feedback you receive. As reiterated in the conversation between Mike and Lance, no matter how good you are, you're at least 20 percent wrong.

Understanding that customers' feedback is priceless and implementing changes based on this feedback is what differentiates successful tech startups from the less successful ones. Embrace a controlled approach, be patient, and keep iterating your sales strategy until you hit the right market fit.

Listen to the Podcast https://ftb.bz/Podcast

Mike's Website https://salesdesigndelivery.com

Interview Transcript

Lance: Michael, welcome to feel the boot.

Mike: Hey, thanks for having me on.

Lance: So we were talking a while back about sales strategy, and that's really why I wanted to have you on is I thought it would be an excellent topic for a lot of the founders who are out there, especially technical founders where that's not really their specialty.

But maybe we want to start by defining some terms. So what do you mean when you talk about sales strategy?

Mike: You know, it's really kind of a kit because, you know, at a high level, it's it's going to encompass your go to market messaging. So what is it that you created and what are you trying to articulate to the market? But you really have to kind of, you know, divide that out a little bit and say, Okay, given that, who is your target audience?

Who do you really want to be out there delivering that message to? And how do you intend to try and reach that audience? How do you, you know, how do you get a moment in time where you can capture their attention? And as a subset of that, what type of rep are you going to need to be able to make those connections and articulate the value proposition?

And then, you know, even beneath that, you know, what's your pricing and your delivery model? Really, as, as a startup company, those things all have to be fleshed out, not necessarily before you get started because some of that you can iterate on. Yeah, I've been with some companies that literally started as, as a day one angel funded kind of situation where we said, Hey, the funding came through, get on the phones and start talking to folks.

And we did and we learned and we'd literally meet daily to say, okay, you know, this seemed to land well, this seems to need. iteration. But I think those are kind of the top five things that I'd consider on the front end of starting going to market.

Lance: Yeah, I mean, I think as with many things in startups, it's always a working process and an evolution rather than a finished answer. Like, okay, this is the perfect answer for exactly how we're going to go to market. Now, you started off by talking about who your target customer is and who your target is inside that customer.

How do you think about how to work that out? How to discover what that right, you know, target is in the right fit.

Mike: You know, I think you know what I've done. I've worked with a lot of small companies over the last 30 years, and the first place I start as a sales professional. It's just plumbing the thinking of the founders to say, Hey, you know, what is it that you've created here and where do you see the value and who do you think in our, you know, in our marketplace is gonna align with your vision for that value?

Because I'm sure folks that have actually started the company have some, some indication of that. But often that needs to be refined these days because it's interesting. You know, 20 years ago, you know, research indicates that there were a lot of products that could be Signed for by a single VP level type of person, you know, VP of marketing, VP of operations, et cetera.

And actually back in the 2008 financial crisis, business really changed dramatically to the point where now research indicates that there's an average of 5. 2 decision makers in any given product purchase. And so it's great to start with the founders ideas on who you might want to talk to, but very often you're going to need to go a little deeper than that to say, okay.

We'll talk to, you know, that, that initial target person, but there's probably three or four or five different ancillary folks that are going to be part of the decision making. And there's a concept in sales called single threading, where you don't want to have all of your discussions just transpiring with one contact.

You typically want to go get your champion, but then you want to use that champion to determine who else will be part of the decision making process, and then kind of systematically go after those target audiences as well.

Lance: And so how do you suggest a founder go about finding those champions? Is it a matter of sort of just working with different people in the company until you feel? that kind of traction with someone and then getting them excited? Or is there a more systematic way that you look at finding who the champion is going to be?

Mike: Yeah, what I've done in partnering with founders is take our best educated guess as to who it would be that we'd want to be delivering the value proposition to, and then actually, as you deliver that value proposition, you know, ask that person for guidance to say, Hey, you know, does this really fall in your area of responsibility?

If so, who else is involved in this process? Yes. If not, who else should I be directing this to? And so a lot of times, when you're coming at an organization with something new, you've, you've gotta do a little bit of investigative reporting, if you will.

Lance: Yeah, you're sort of working the network of people within the organization to, to get references to find that right person.

Mike: Yep, yep. And the beauty of that, as I say, is that you want to do that anyway. You know, even if you know that you've got the right person, it's a pretty dangerous thing as a new company to hang your entire sales process on that one person, because, you know, I've always Had more success worrying about the 10 percent of the deal that may not be done yet than celebrating the 90 percent that seems to be going great.

And so it's always a good idea to kind of look behind trees and see if there might be a bear or two waiting for you, you know?

Lance: Absolutely. I remember when I was doing a lot of government sales I kept running into the situation where there was only one person who could say yes, but There were like eight people who could say no and were all lurking around in the shadows and you had to sort of work out who they were, why they were going to say no, what would motivate them to say yes, and try to try to keep things moving forward or any of them might, might torpedo you.

Mike: Now, it's interesting too, as you say that, one of the things that, you know, Challenger Inc. is a research company that actually used to be owned by Gartner, and they research just exactly what you're saying. And not only have they found, as they say, that there's an average of 5. 2 decision makers in any given large purchase, but most of those people get into the process of making a group decision and find that it's not going to go entirely their way.

At which point they start to become a little apathetic to the process and just say, I'm not going to really get what I want out of this process, so let's just buy the cheapest product. And so you really do have to be on guard, not only to make sure you're getting to folks, but that you're getting to folks and helping them understand that your solution is the most capable of, you know, meeting their needs while meeting the needs of the other people in the decision process.

Lance: So that, that brings up an interesting conundrum that I, I have come up in my advising calls all the time where the founder understands they need to be going out meeting with these people. They think they've identified who they are. But getting their foot in the door, actually being able to get contact with that person and have the opportunity to start talking, talking with them is the real impediment.

So what's your thinking about how do you, how do you break through the barrier that so many of these decision makers put up? I mean, they're intentionally building a wall there to try to avoid people coming through and stealing their time.

Mike: Yeah, no, I think you're exactly right. And I think that's gotten a lot worse in the last five or 10 years. Just with the advent of, you know, automated marketing tools and things that just automatically ping somebody 17 times the world has gotten so noisy that a lot of decision makers have just kind of opted out of the traditional communication channels.

And so there's two things I've done with startups that have been very successful. One is to try and Go where I, where I like to say to the natural habitat of the people you're trying to capture. So, you know, trade shows are a terrific one. And, you know, there's actually specific kind of speed dating shows where you can pay a certain amount of money and be guaranteed 20, 10 minute meetings with the decision makers that you're trying to reach out to.

And so those are some kind of commercial ideas for being able to, to get out and get in front of folks. The other is just getting more creative than your competition about rising above the noise. You know, there's, there's actually a woman by the name of Beck Holland started a company called Flip the Script.

And she's, you know, completely dedicated her career to personalization and finding ways to reach out to people so that you can make a meaningful connection, so that you can earn the right to give them 90 seconds of what's on your mind. And, uh, so there's, there's some pretty neat research in. How you can do that outreach in a way that actually will, will land.

But to your point, it, it takes a lot of hard work these days. Yeah.

Lance: trying to avoid the hard work by using A. I. To do this personalization. Um, usually, obviously, right? Most of the time, it's very clear that the system doesn't actually really understand who you are. Maybe it works with people who have very obvious titles. Um, I think I don't fit very well into the models they built.

But I think it's really interesting what you were saying about the trade shows and these Speed dating things because those are contexts in which these people have opted in to this kind of contact, right? They've put on their schedule. Here's a chunk of time for me to go talk to these vendors in a controlled setting.

Uh, so they're, they're in a mode to be hearing these pitches.

Mike: No, exactly. And there's, there's a concept I've used, you know, I call if I were you selling, and I just always try and do some analysis with the senior management of the companies I'm working with to say, you know, if we were our target audience. What would we need to hear from us to make a valuable conversation occur and you kind of back into it and try and put yourself in their shoes to say, hey, these are the problems they're trying to solve.

These are the things that are keeping them awake at night. Let's try and communicate to them at a trade show or at a speed dating conference or via personalized outreach that we've got a solution and we understand where they're living. And to your point, it really doesn't take A ton of AI or anything to come up with the messaging.

It's funny how just some nominal personal connection, you know, the fact that, you know, somebody's spouse went to the same college, or, you know, somebody's son is researching something for their senior thesis that's in and around their area of specialization, anything to your point that seems to be real and on target that makes it seem like you're an actual human being that has some understanding of what they're trying to accomplish.

It can really be all you need to kind of penetrate the noise that's out there.

Lance: Now, you talked about understanding, you know, uh, what they value and what they need, what their requirements are. And I think that's something I see all the time where people because they've spent so much time building their solution, they want to sell the features of the solution rather than the benefits to the customer.

How do you go about drilling in to get that kind of nuanced understanding of the needs that they have and how they perceive the value of this solution and maybe in comparison to other options that are out there. Got it.

Mike: you know, it's interesting. I'll share a story because the short answer is I try and put myself in their shoes as we've talked about, and I try and understand where they are as a professional. And then I take my best stab at presenting as though I was the kind of the decision maker and the value that I would see in my messaging.

And then I ask how I'm doing. So I had an opportunity to present to the Chief Technology Officer of General Motors years ago. And to be honest, I didn't realize until I got to General Motors World Headquarters that I was presenting to the CTO. I thought it was just kind of a IT person that, uh, I'd gotten plugged into by the Chief Information Officer.

And, uh, so I wasn't fully prepared to be meeting with, you know, the top five executive at General Motors. But, I stayed true to this approach that we're talking about, and I said, you know, Mr. Scott, you know, knowing what you guys are doing as an organization and doing market research and so forth, I would believe this tool that we have that assesses real time opinions could be very handy at some of the new product introduction shows you do and auto shows, etc.,

because you could get real time feedback from the audience as to what they think of the new Corvette, etc. And I gave them a couple other examples like that, but I said, Am I thinking of that correctly? And he said, you know, you absolutely are. And I appreciate the fact that you've obviously given this some thought.

You're only about 70 percent right, but because you took the time and the initiative to try and think of this from my perspective, I'm going to kind of clue you in on the other 30 percent that I'd really use this for. And so that happened over 20 years ago, and I've used that ever since, because I really do think that people value the fact that you stepped back and you tried to put yourself in their shoes and you tried to map your business value to their needs and requirements for a solution.

And even if you get it half wrong, they tend to recognize the fact that you're a little different from the competition because at least you took your best stab at understanding where they're living. And then they'll very often take you under their wing and give you some guidance as to what you should be saying to them and their peers.

Lance: So you're really trying to frame this very specifically to to your hypothesis of what they need. But you're also treating it kind of in a Socratic way and having the humility to admit that you may be wrong about that and kind of asking for their input.

Mike: Exactly. And the other thing too, I think you and I had talked about when we first met is when I got out of school 30 years ago, I was very excited to go to work with entrepreneurs because I had the vision that they had just, you know, woken up one day and said, I'm going to create the iPhone or whatever it is.

And what you realize when you work with startups is that you start out heading due north and you end up probably south by southeast. And that's what your product becomes because you iterate along the way. So you have an idea what the value is, but very often the market will coach you that it's something a little different than what you're thinking.

In fact, sometimes it's a lot different and a lot of very large, successful companies ended up in a place they didn't realize they were gonna when they started out. So iterating and asking good questions as you go seems to be kind of a requirement for startups, you know?

Lance: Yeah. Now, what do you think about, in fact, really starting this well before the sales process where you're initially engaging with potential customers? Exclusively on that kind of discussion basis to try to understand their problem set and sort of not putting a sales face on that at all.

Mike: Yeah, no, I think that's really important because as you say, there's, There's other research I had read where, where there was a gentleman who actually had been VP of product development for a large technology company. And he expressed that he couldn't wait to get the new, you know, version out so he could run out and tell people about the new bells and the new whistles and the new buttons.

And, and then he eventually worked his way up to CEO of that same company and he realized how far off the mark he had been by talking about bells and whistles. instead of, as you say, mapping it to problems and solutions. And so, you're exactly right that, uh, it's, it's critical to, to have those conversations and to put in that legwork because I don't think in this marketplace there's any such thing as pegging it exactly right the first time around.

You've got to go out in humility and say, this is our hypothesis, we've got some intelligent people that have designed this. Here's where we're shooting, but tell us if we need to tweak that a little bit to garner a real serious audience with you. And very often they'll give you direction because they probably do see the potential in where you're going, but they probably would be willing to tell you that you're 30 percent off the mark one way or the other, you know?

Yeah.

Lance: that that approach also makes it feel like you're an easy person to work with. You're not the sleazy salesman in the checkered suit trying to high pressure them. It is much more of a partnership kind of approach. You really are sincerely trying to understand what their problems are.

And people, I think in that scenario, want to help you help them. Right there that they're willing to be in a more collaborative mode. wasn't

Mike: but um, there's, there's actually a book called Selling to Veto, with Veto being the very important top official. And the premise of that is a concept they call equal stature selling. And the classic example, you know, I used to sell hypoallergenic latex project, products to, to surgeons. And it was intimidating, you know, because you talk to a neurosurgeon who'd gone to school for 20 years, you know, after college.

And you started to realize that you didn't have to acquiesce to that because I was actually more of an expert than that surgeon was. in hypoallergenic products and the impact of that and the surgery they were doing. And so, you certainly wouldn't be arrogant but you can kind of comport yourself in a way that you command their respect by just saying, Hey, if you give me two minutes, I'm an expert in this little slice of the world and I think I can deliver value to you.

And to your point, folks generally respect that and say that's, that's terrific. You know, I, I don't know everything about everything and if you've really studied up on this little sliver of the world. that I probably should speak with you. So that's an important thing as you start to look at what kind of salesperson you're gonna have for your organization, is that they're able to kinda play at that level.

Because, you know, it's interesting. I've got a concept I call closers versus exposers. And, you know, there are products like the iPhone that all you'd have to do is take it out of your pocket and hand it to you, Lance, and say, push a couple of those buttons and you'd fall in love and say, Oh, I'll take a hundred of them and don't worry about it.

I'll, I'll take it from here. This is awesome. And there's other things that are much more conceptual that you're actually going to have to walk them through the value and why it is they're going to want to have it and how it is that they're going to get it approved and so forth. And, uh, and there's room for both kinds of salespeople in the world, but you want to pick the right flavor for the kind of company you've got, you know.

Lance: exactly. And so you think that's just sort of having some introspection on the kind of product that you have to understand what type of salesperson. You should be getting. And what other sorts of things should be thinking? Should founders be thinking about when they're considering who to hire into a role like this, particularly if they don't have a background in sales, and it's it's a little bit of, you know, terra incognita for them.

Mike: Yeah, no, I, I think first and foremost, I mean, that's, that's why I started sales design and delivery 10 years ago, as I had a lot of private equity and venture groups say, that's a hard thing to figure out. So we'd like to have somebody with your experience, Mike, come in and kind of make these initial forays out to test the value prop and to ask these questions of our target audience, because that way you're in a kind of controlled setting where.

We can sit down here and you've got, you know, some of your, your, you know, development people. We can lock ourselves in the conference room and say, okay, this is what we've got. This is what we think the value is. Mike, go on out and talk to the VP of IT at this company and say this and then report back.

And I can go out and kind of articulate what we agreed and then bring it back and say, you know, 65 percent of that landed pretty well. 35 percent they said was pretty off the mark. So, let's iterate on that and let's go out and try it again. So, I've actually done that for a lot of small companies, but I've also done it for some multi billion dollar companies like J& J and Wolters Kluwer Health, et cetera, where they didn't want to turn 200 salespeople loose, helter skelter.

They wanted to have a very controlled, let's, let's send one person out that we know can articulate this. And that can come back and report what went right and what went wrong, so we can all decide how to iterate and keep mapping our value to something that's actually going to be marketable.

Lance: So how should a founder go about then finding maybe that first first person to start that process going to help hire the next set of sales guys? Because typically, you know, the very early stage, there's almost no budget for anything. How do you, how would you suggest someone start in evaluating whether or not a person is going to be a good fit as that first salesperson in house, and then maybe whether or not that person also has the skill to build the team around them, or whether you're then going to need to hire someone.

Who can actually kind of build the organization.

Mike: the one tool I've used is actually, you know, there have tools like Herman brain dominance, et cetera, where you can actually assess. Whether, you know, in this case, a salesperson has literally the, the mind to be able to do all that's involved because a lot of salespeople, their natural strength is kind of back slapping, you know, handshaking and relationship building kind of stuff, which is terrific, but a lot of what we're discussing is much more on the analytical side where it's like, okay, great, you need to get into the room and you need to have a firm handshake and you need to be friendly enough to have Hold the conversation, but then you have to be left brained enough to be able to understand what you should be presenting and kind of garner the respect through that equal stature selling that we talked about.

So there's, you know, I actually have been assessed with what they call a CEO profile where you've got, you know, kind of strength in all four quadrants of the, you know, interpersonal versus analytical and so forth. And I would look. for somebody like that. So that it's not just a sales guy trying to go out and glad hand some folks.

It's somebody who can do that and do the analytical side of things so that you as an organization can learn from these initial kind of iterative attempts. You know?

Lance: Got it. Yeah, I mean, when you're trying to do that peer level selling, there's nothing that, that fails harder than, uh, bullshitting on it, right? You, if you're going to come in and position yourself as an expert on this little thing. You'd better be an expert on that little tiny thing. It may be real small, but that has to be for

Mike: Exactly.

Lance: Yeah, I mean, I remember early on in my company, we weren't able to find people who could hit all of those things. And so we ended up with sort of a team selling approach where I would be the person who was there as the expert, but I had people who were much better at glad handing and doing the negotiation and doing the interpersonal stuff because that is not a particular strength of mine.

Um, and that, that ended up. Working very well, but it would have been convenient if we could have found that in in a single

Mike: Yeah. Interestingly, I think you raise a really good point because I I typically would use someone like you In that kind of instance, even if I knew as much as you knew about the subject, because you're the expert, you know, and so classic example is, you know, I've done a lot of work in health care and, you know, lots of discussion about I.

T. and, and, you know, kind of augmented intelligence and things that can help physicians identify potentially fatal conditions in the hospital via the computers that are at their disposal and monitoring the patients. Um, And I knew all kinds of stuff about what our technology could do to help him, but I wouldn't have that conversation.

I'd start the meeting, you know, and introduce all of our company and what we were there to discuss for the first eight or ten minutes. And then I would turn Dr. you know, X. Over to talk to the chief medical officer, whoever I was on site to present and didn't have to bring him with me. I just bring him, you know, remotely via zoom, etc.

But to your point, people generally would rather hear from a professional peer. So if I'm an engineer, I'd rather hear from you. About engineering. If you're an engineer, no matter how much I might know about it, because I'm just a sales guy. And so I think your model is a good one. Even if you find a salesperson, that's got lots of abilities to understand the analytics as well as the persuasive elements, because peers love to buy from peers, and I've always found that.

Subject matter experts are kind of a secret sales weapon because they're not really selling, they're just talking. They're saying, hey, you know, when I was in your position, Lance, and I, you know, ran this division for this company, I had these four problems. Is that what you're experiencing? And you're like, absolutely, that's what I'm experiencing.

And you say, and what I found in this product is that it solved three of those things right off the bat. And, you know, if I take you through these three, you know, will you give me some feedback as to whether that would solve it for you? And people just fall in love with each other during that 40 minutes where the peers are speaking together as kind of subject matter experts.

And then frankly as a sales professional, I just make sure that all of my subject matter experts know to quiet down in the last 8 minutes of the meeting so I can actually kind of grab it back and turn it into a business discussion again. Because otherwise everybody goes breathlessly until the 59th minute and say, well this has been awesome.

And Lance, you know, you're brilliant and it's so great to meet you and I'm excited to Someday do something with you, but you know how that goes in a noisy world. You really have to kind of step back and say, you know, from a best practice standpoint, you know, if you have this interest as you seem to, we generally recommend these three next steps.

Would that work for you, Lance? And so, you know, the sales guy is great for getting things going on the front end of the meeting, and they're great for closing out the meeting. But it's not a bad idea to do just what you did, to have subject matter experts that are kind of peer to peer. Get involved, you know, with that, the meat of the meeting as well.

Lance: So when we're early on in the process, you know, let's say this is the first meeting you're having with your target customer. What are your objectives for those sort of next action items?

Mike: You know, a lot of it is, you know, to get the ball as far down the field as you can. So I typically train my sales organizations to say the Holy Grail would be able to say, Hey, Lance, Lance got so interested in this that he's actually considering a purchase. And so I've typically, you know, kind of trained folks to give, give the decision maker a reason why they would want to continue in the near term.

Because again. The biggest challenge in sales is getting people not to put you on their list of top 10, 15 things they want to get done, but to actually get to the five that they're going to do. You know, because lots of people say, this is awesome and we're going to get after this and holy cow, but you really need to help people take action because a lot of professionals are not great at prioritizing what they should do.

And so, first and foremost, I try and put together, you know, a proposal that says, you know, as an early adopter, we would actually give you an innovation partnership proposal, you know, we'd need to know that you would be able to proceed on this in the next 90 days, but we're very interested in working with companies of your stature to get this up and rolling.

So if you would want to participate in that program, we could get you a proposal that's about a 30 percent net savings or whatever, but you're giving them a reason to say, wow, This is something I should move to the top five things on my list instead of just letting it fall on my, yo, little spiral notebook full of things I'm going to do someday.

So the art of the deal is trying to ask for some kind of action from them. Very often they'll say, well, that's enticing and I'd like to know more about that, but I don't know that it's appropriate to start talking about a proposal. And in which case I train my reps to say, well, then it would sound like we probably want to get another meeting with your team to expose this to the other folks that would be part of that 4.

5 person committee. And you kind of know, because you do this 60 hours a week as a sales professional, what the process is going to be. Probably better than they do, because a lot of these people don't buy products that often. And so I've actually had reps work for me that considered their job not to sell a product.

But to get somebody interested in the product and then help that person work through their approval process. So they considered themselves professional Approval getters they literally tell them the prospect now that you're interested I will be working with you in the coming 60 90 days to go through the steps that you tell me need to be done to allow this to become something you can actuate and actually put into your facility.

And it's funny because people respond to that and say, well that's really interesting. Yeah, I mean, I guess we'll need to show my boss next. And you say, okay. So you map that out. And you say, and once we get done with your boss, who else would be involved in the process? It's like, well, we'll probably have to go to the VP of Operations.

And so you map that out and you can literally Turn the person that's now interested into a coach to help you get through the process with the other people that are going to be involved in bringing this in as a final decision.

Lance: I mean, it seems like often you're in this situation where you don't necessarily have direct access or not immediate access to the other people who are in that decision making team. Uh, and so the, the person that you're talking to actually has to carry the water to those other people and often are not necessarily good at it, right?

They're not your sales guy. They don't have all of that. And so. In this case, you're sort of coaching them and providing them the materials to make sure that they're able to do that successfully.

Mike: no, it's funny. I've coached my sales teams to do two things. One is to actually give the prospect an approval kit. So we actually generate the materials and we've gone so far as to literally provide them a script to say when you go to your leadership to get approval for this, These are the things you're going to want to outline for them, and we'll walk through it with them.

We'll say, you know, obviously you need to make this your own, but conceptually, do you agree that these are the three core return on investment type of points you want to make to them? And, you know, do you agree that this is probably the right implementation timeline? And you're basically giving them the business case that they're going to now turn around and go socialize with their leadership.

The other thing you can do is If you suspect that this person may actually not be willing to go do the work on that or they may not be particularly effective at doing the work we've actually then communicated to their leadership something positive to say, Hey, y'all wanted to let you know I met with Lance yesterday.

And we uncovered an opportunity to drive 270, 000 a year in revenue for your organization. And Lance and his team are doing a terrific job. I just wanted to make you aware of a really exciting opportunity and they'll be working with your team. And if there's anything I can do for Lance or anybody that reports up to you, please let me know.

And now, you've got a CEO or a CFO that's calling Lance and saying, Hey Lance! You know, what's up with the quarter million dollar thing? That's fantastic. Nice work. And so it's not going around anybody in a negative way. You're basically putting a feather in your prospect's little, you know, cap. But you're also now creating awareness at senior levels that there's a huge business opportunity that even if Lance isn't an effective person advocating for it, should be advocated for.

So that's been a tool that we've used just to kind of enhance that awareness so that Other people are a party to the strategic kind of aspects of what we're discussing.

Lance: Yeah, I like that, because it, it, it both gets the message where you need to get it, but also makes that person look like a hero as opposed to looking like they're sort of falling down a little bit, which, which they sort

Mike: Yeah, exactly, exactly.

Lance: Now, what's your feeling about things like, uh, proof of concept or paid or unpaid pilots as opposed to trying to go directly to a close of the, the actual

Mike: Yeah, no, it's interesting because first and foremost, there's a lot of research that indicates that people don't value free. So when you say, hey, you know, Lance, I'd be happy to give you, you know, 60 days of using this product at absolutely no charge. That tends to fail because people, A, wonder why you're willing to do that if you're, if you're as fabulous as you say you are and you've got this great ROI, why are you standing around giving stuff away for free?

But, two, I think, you know, they, they need to have a little skin in the game and so saying, hey, you know, we're going to put this together for you so, you know, instead of a free trial, you know, the term proof of concept tends to be more effective where it's like we're going to let you, Access this in three of your initial 10 enterprises and we will prove concept there.

And as soon as we hit these three key performance indicators, we'll schedule the other seven to roll out kind of thing. So you can get agreement on those types of things where people get a little bit of a try before you buy, but they don't have, you know, complete absence of skin in the game because as I say that that tends to just.

Be ignored and then they tend to blame you and your offering for not being successful when in truth It just never really got a fair shake. Does that make sense?

Lance: Yeah, absolutely. And it sounds like you're putting an if then on it, so that you're saying, we're going to let you try this and you're agreeing that if it achieves X, Y, and Z, hits whatever we've decided, agreed that are the success criteria, then you are moving forward, right? You sort

Mike: Exactly. We actually

Lance: got them to

Mike: write that into the agreements and, uh, and then it's terrific because then if people are a little bit less than effective on their side, you can actually write the agreement that things are going to transpire anyway because they didn't do their part. So one thing we've done a lot in recent days, you know, particularly with COVID kind of turning the world on its ear is it was very difficult to get anybody to stand up and take on.

Any new purchases because they considered that a project and, you know, staffing was difficult and they had lots on their plate and yet we had products that would very much help them through that very crisis and so we started to put together what we call gain sharing agreements where we'd say, listen, we are so certain Lance that this is going to have tremendous impact and solve the very problem that you're currently so, you know, immersed in that you can't take time for a new project.

Okay. We will basically guarantee it's going to fix that, and so we can give you, you know, 30 percent off the product, and you can deploy it today, and if it solves all the problems, then we'll end up actually capturing 130 percent of the normal list price, but if for some reason we don't deliver, then Then you're getting this at a ridiculously low price that's basically below our cost.

And what's interesting is that's a real display of confidence that they're not getting from other vendors. So they say, well, wow, you know, Mike, Mike's basically putting his company on the line here. If he doesn't do what he says his offering is going to do, he's not going to get paid. So that's pretty intriguing.

I mean, I really can't lose on that. And then they'll step into it, and to your point, when you start to write the terms and say, well yeah, but that presumes that you'll go live within the next 90 days, and it presumes that you will measure all the key performance indicators every 60 days for the following 6 months, and all that stuff, they'll very often step back and say, you know, I do want to buy your offering because you're so confident, and I believe you, that you're going to have this effect, but I don't think I want to do this gain share thing because, A, it sounds like you know how this movie is going to turn out, and I don't want to pay more than list price.

And B, I don't know that I can do all the measurement and all the stuff that you're talking about in the agreement. And so, 90 percent of the time, that type of approach will get you full list price, and it'll get you much more quickly because they see that upfront confidence that you have. Does that make sense?

Lance: I like that. I like that. That sounds, that's, that seems like a very effective kind of. Uh, it's a, it's a mental gymnastics trick. You know, you're, you're, you're working, working with, uh, the, the way people make decisions and think about loss aversion and, and things like

Mike: No, exactly.

Lance: And I guess that, that does help support the argument that you are providing an, uh, a solution that brings value.

That because you're willing to take this risk, obviously this must be a valuable solution. And I think I'm always looking for, how do you convince people of that? Because if I'm talking to a customer. Uh, and I tell them this is an amazing thing. It's this huge value proposition. They're always taking that with a grain of salt because I have a huge vested interest in telling them exactly that.

So what are some other approaches that you think of to help validate that value proposition when they won't believe you

Mike: Yeah, no, I think again, that's where I just spend some time with that if I were you selling concepts So the first the first thing I'd want to see if I was presenting to myself Is that the person believes in themselves well enough to put some skin in the game? So that's where the gain share comes in but to your point The second thing I'd want to know is, okay, you say this is so great, tell me about who else has done it and achieved what you're talking about.

And so very often I'll offer that up very, very much on the front end is to say, hey, we've worked with a couple of organizations very much like you. They've been early adopters and they've produced A, B, and C. And if you like, we can get you in touch with the VP of operations or the CTO or whomever is the right person.

So you can speak to them as peers because frankly, if I was sitting in your chair, Lance, I wouldn't believe a sales professional. I'd want to talk to a peer who's kind of walked in my moccasins. So, so that's, that's been another really effective way to go. Obviously, that presumes that you've got your first customer.

So I've always worked very hard with startups. To go in and buy hooker, buy crook, even if it's not a super profitable first encounter with a customer, you've gotta get some customers. I mean, somebody that can say, yeah, I've actually done something with these people and with their offering, and it produced something, and uh, then the world gets a lot easier.

You know, it's kind of the crossing the chasm.

Lance: Now, do you make that an actual quid pro quo to say that we're going to give you this insane deal as our first customer? Some on condition that you're willing to be used as a

Mike: Yeah, yeah, cause again, most of this People want to be set up to win. I mean, I've had a lot of C level executives say, I would absolutely be a reference for you because if you do what you say you're going to do, Mike, I'm going to look smart as hell. And so, I love looking smart to other people, and I love looking smart in press releases, so if you deliver what you're saying, I'll be a reference all over the place because not only are you going to help me with my business, you're going to help me with my career because I look like I know what I'm doing.

You know?

Lance: Exactly. So are there any other things that we've sort of missed in this, that you think are particularly important for early stage founders to understand about putting together a sales strategy?

Mike: well, two big things. One is, Avoid paralysis. I mean, there's, I've seen two extremes in the world of sales strategy and startups. One is that they go out and they spend a whole bunch of money hiring salespeople without knowing what kind of salespeople they really need. So they don't do that kind of test in a vacuum.

Let's, let's do kind of a controlled outreach with one or two sales resources we know are analytical enough to be trustworthy to make a business analysis. When they come back to the leadership team. So we all know how to iterate and keep, you know, producing something that the market wants. But the other end is to say, well, let's not invest in sales at all.

Let's just, you know, try and go it alone. And, you know, as, as you pointed out, sometimes the founders are the sales force for longer than they should be. And you miss your window of opportunity. And it's also psychologically difficult. Sometimes it's interesting. In the world of real estate, they've demonstrated that for sale by owner doesn't work very effectively.

Not because I don't love the house that you're trying to sell me, but because I don't want to tell you Lance that I don't like the drapes. And so I, I just don't want to hurt your feelings. And so that's just a natural human tendency where if you're talking to the founder of a company. And there might be just a little something that you need to tweak, but people don't want to talk to somebody who is, you know, beautiful baby is laying on their desk and say, well, your baby is just a little bit unattractive in this way, but they will do it with, with, you know, somebody like myself where you can say, Hey, you know, I'm trying to understand exactly what we can do from a market offering here.

This is what we believe, but tell me, does, does that resonate? And generally they'll say, yeah, you know, you're, you guys are smart enough. And progressive enough that you're about 70 percent there. But let me tell you about the 30 that you'd have to change to get me to do business with you. And that's, that's where you can really gain some ground.

And so my, my suggestion is kind of this controlled approach where you have a sales resource that's both good on the relationship side and on the analytics side. And you go out, and you take it to market, and you come back, and you get together as a team, internally, and review what worked well, and review what needs tweaking, tweak it, iterate, go back, find another person, pitch again, and just keep doing that over and over, and kind of fail fast.

So, that's, that's kind of where I see people being successful, is not making a gargantuan investment, and having six salespeople, and just go out with a big bang, because you may be just completely In a non controlled environment where you really don't end up getting any measurable feedback because you're just kind of all over the place.

And likewise, don't be so conservative that you wait two years to go out to the market and get a fair test of your messaging.

Lance: Got it. So you see some people who are actually just. Spending all of their time on the research and trying to perfect the message versus getting out there and getting kind of real world experience on how do people actually react to

Mike: No, and it's, it's funny because no matter how good you are, you're at least 20 percent wrong. So I mean, you know, whatever the vision is, and that's not any fault of any entrepreneur, that's just the world. And so, you come out with your vision as to what you think is, is needed. And the world's gonna probably tell you something otherwise, but the cool part is that they'll tell you exactly what the recipe needs to be, and then you can really kill it, you know?

Lance: Exactly. I actually, that is a fantastic play note to end on because I think that really does sum up the key essence of what we've been talking about. So if someone wants to learn more about you or potentially reach out and connect, how should they find you?

Mike: You know, I've got a website for my small consulting firm. It's called Sales Design and Delivery. And the reason that I named it that when the private equity and venture guys came to me 10 or 12 years ago after I'd been successful in helping them with some of their portfolio companies is that It's not just the design elements that we're talking about today where you're trying to map out go to market messaging and value props.

It's the delivery side, meaning you need to go out and actually make sales happen to help small companies fund the position of a person like me. And so I've been very deliberate about staying active in direct selling while I'm helping do sales strategy. And so you can go to my website, which is SalesDesignDelivery.

com. Or, we can catch you, my cell phone number is 952 454 5293 and I'd be happy to take a call from anybody that wanted to talk a little shop.

Lance: Fantastic. I really appreciate you putting that out there. I think that would be a fantastic resource for everyone. And thank you so much for coming on Feel the

Mike: No, I'm glad to be here and, uh, great to spend time with you and I look forward to working together in the future, okay?

Lance: Great, thanks.