Last year I took Technology Sales and Sales Management, one of the best classes at MIT Sloan. The class was taught by Howard Anderson, the founder and former president of The Yankee Group, who also co-founded Battery Ventures (Battery has raised $3B and has invested in companies such as Akamai, Fore Systems, Friendster or Ruckus).
To Howard, "sales are important because nothing happens until a sale is made. The entrepreneur must not only understand the sales process, but also embrace the fact that the ability to sell is the single most critical success factor of any new enterprise. In a larger sense, the entrepreneur has to "sell" his vision to prospective employees, to angel and venture investors, and to strategic partners. While all true and all necessary, the course focused directly on selling to customers, whether that is through a direct salesforce, a channel salesforce, or building an OEM relationship."
After reading back my class notes, I would like to share some bullet points of basic tips he shared in class:
- Type of sales people (you need to know who you recruit): Hunters vs farmers:
- Hunters: good at generating new leads
- Farmers: good at maintaining relations
- Basic advice:
- Convince your customer that you have a common enemy and you are going to fight together against him: the competition. Scare him out.
- Convert your product into an opportunity for the customer
- Make people try your product so they can communicate the experience to others
- In any business, there is always a switching cost. So customers will never switch to your product if the price and benefits are the same.
- Share the enthusiasm
- Steps: present features, benefits and advantage; prove it; demonstrate; do not overload your prospect with product info
- Understand how your prospect is evaluated (how he is promoted and compensated)
- Try to make the direct manager of your prospect look good
- WHEN TALKING ABOUT THE COMPETITION
- Compliment the competition about things that do not make the difference (e.g., packaging)
- Don't insult your prospect! if he is using a product of the competition, explain him that at the time it was a good decision but technology has changed and your product is what he needs now.
- ABOUT CLOSING DEALS
- You do not need to close a deal in the first meeting. Just get closer and closer in each meeting.
- Good sales people are good closers
- If you do everthing right but you do not close, you belong to marketing
- When customers ask the price, they are ready to buy
- TIPS FOR SALES MANAGERS
- Recruit sales people that want to drive Ferrari's and their wives are high spenders. Not people that want to save lives (although those are good profiles for other positions).
- Recruit people with high egos that can handle 90% rejection
- Act like Jack Welch: he regularly fires the bottom 10% performers