Tuesday, August 16, 2011
Overcoming the “Field of Dreams” approach
Through-out my 17 years of business development, I have seen many promising start-ups with great products fail. From my personal observations, I have determined that they fail most often due to lack of persistent sales. They assumed that if they built it, customers would come. Most of them ran their bank accounts dry before any significant business came their way.
I am now working with a new start-up accelerator in the Dallas - Fort Worth area. This motivated me to put my thoughts down in writing as I seek to save others from this common fate. Here are my thoughts.
Owners were busy developing the product and gave little thought as to how to reach a decision maker. They thought that simply being visible was going to generate business. People do not naturally assimilate general information and turn it into an understanding of how that will benefit them. They must be guided to this understanding and then encouraged to make a decision to buy.
Once start-ups realized that no one was seeking them out, they increased their visibility. They went to where the decision makers were looking for information. That was usually trade shows and conferences. After initial failure to attract adequate attention, they “idiot proofed” their message so it could not be missed.
Once a decision maker was reached and interest generated, there was too little follow up. They waited for the person to contact them. If they did go the extra step and tried to contact the decision maker, they failed to persist long enough to close the deal.
Seven Failures in the sales process of start-ups:
1) Expecting people to understand the significance of their product. Product developers were so excited about their product, they thought the benefits of it were clearly visible to others.
2) Failing to understand how far a prospect needs to be led before they understand enough to make a purchase decision. Being simply “interested” may mean that they were only entertained. Sometimes it requires more to bring them to the point where they decide to take further action.
3) “Further action” is not necessarily a decision to purchase. It is often an awareness that more information is required.
4) Failing to follow up. Both parties return to the office and get back into their routine. Unless “closing the deal” is part of someone's routine, chances are, nothing new will happen. You will go back to doing your day job and your prospect will go back to doing his day job.
5) Failing to be persistent. If you follow up, chances are, you will not get through the first time. You will have to repeatedly follow up. There is a sticking point beyond which you will need to progress before you develop a smooth working relationship which generates income. Most people fail to be persistent enough to get past the sticking point.
6) Failing to persist through a lengthy purchase process. Multiple additional meetings at the customer's location may be required before they have all the justification they need to make the decision to buy. Additional people may need to be brought into the process who may have different criteria which need to be addressed. Most or all of the people you will meet will need to be satisfied before you close the deal. You must continue to persist because you are still in that sticky period.
7) Failing to persist when another prospect expresses interest. It is so easy to lose confidence that the deal is ever going to close. When that next great opportunity emerges, it is so hard to not chase it. I have seen this in myself. To continue calling a prospect and never getting through or to continue having conference calls were everyone seems to be finding reasons to not close the deal; it just seems like wasted effort. When another promising opportunity emerges, it feels so logical to put all your effort into making that new deal happen only to end up down the road 6 weeks later at the same point in the sales process.
I suggest new entrepreneurs form accountability groups with other new entrepreneurs. Your accountability partners need to hold you accountable to persist until you close a deal. And on the flip side, they should be able to help you see when a promising deal is never going to materialize. They are not as close to it as you are. It will be easier for them to remain logical.
James Snider is the Business Development Director for Accelerant Marketing Alliance, LLC of Grapevine, Texas. www.accelerantmktg.com “Corporate Marketing Department ... one hour at a time.”