The art of selling in early-stage B2B software ventures
February 14, 2023
Martin Ward of Waypoint Partners
The ability to sell is the lifeblood of any enterprise and for early-stage software ventures it’s an acutely existential topic: low sales means slow or no growth, making it hard to raise capital and attract talent. This creates a vicious cycle, which eventually leads to stagnation and, in the worst case, business failure. And yet founders are often not experienced sales people; they are deep domain or technical experts. After all, these are the very capabilities that led to their business being founded!
Many early-stage ventures search for a star sales person who has the proven skills and experience to drive the pipeline and secure new business deals. Such a sales presence is of course hugely valuable, and perhaps essential to every aspiring venture, but it’s only part of the story.
If you reframe the challenge of selling, there’s much that can be done to make sales a joyful task, and I use this language advisedly. If you get it right, your product should sell itself, with every sales engagement being a positive exercise in giving the customer exactly what they need and want.
How do you reframe selling?
The key is to view the task of winning customers as less about selling your product and more about making it easy to buy. If you walk a mile in the shoes of your prospect, there are some crucial ingredients that will change the selling game:
- An engaging story that resonates with their situation, demonstrates your understanding of the challenge and explains the value of your offer in resolving it.
- A compelling and relevant business case for buying (and moreover for buying now)
- A simple and low risk, or even risk free, way of taking the first step on the journey
And yet what do many ventures do? They try to explain in their sales pitch why their product and its features are the best and why you should buy what they’re offering, saying little about the world of the buyer and their challenges. They reference a host of generic benefits, leaving the prospective customer to figure out what the real value is for them. They then offer an array of possible next steps, essentially delegating the decision about what to do next to the buyer. The bottom line is the customer is forced to do all of the work, translating features into value and justifying to themselves why and how they should buy.
Now imagine a different approach. You explain to the buyer your understanding of their world their challenges and pains and how you can make things significantly better for them. You explain what makes you outstanding and show them a tailored business case that gives them a reason to act, and act now, with a clear way forward that makes it easy and low risk to buy. This is a recipe for a very different sales outcome.
This customer-centric approach to selling boils down to three basic factors:
1. The story you tell
Making it easy to buy means building a deep emotional connection with your buyer. This comes from talking about them, empathising with their world, acknowledging its challenges and explaining how you can make things better through your unique offering. It means acknowledging what choices they have without you, painting a picture of an ideal world, and explaining how you can uniquely deliver this for them.
Whilst it’s important to make the story largely about them, not you, the one exception is making your market positioning clear early on as this sets a frame of reference for everything you go on to say. April Dunford, a globally recognised expert in tech market positioning, explains that your audience will naturally and quickly seek to position you in a frame of reference which they understand. It’s human nature. This so called default positioning can be a big problem if you’re trying to sell a highly disruptive solution that creates a new market category and doesn’t fit into an existing box, which is of course exactly what many software ventures are trying to do.
2. The case you build
Surprisingly, few early-stage software ventures articulate fully the value they create for the customers they’re trying to hook, getting stuck on features and ‘what they do’.
Here’s the rub: all the customer really cares about is the value you bring to them. The less you articulate this value, the more you rely on the customer to do the hard work and this creates risk: they may not make the leap from features and benefits to value, or may get the leap wrong. If you do it for them, you make the job of buying so much easier.
Value can of course be direct (revenue uplift, cost and time savings) or indirect, leading to revenue and cost improvements, for example by improving customer experience. The more you can show direct value, and how your indirect value leads to direct value, the better your case will be. This becomes even stronger if you can quantify the direct value in percentage or hard cash terms.
Finally, giving a well-structured generic value case is important. But if you can make this specific to the individual customer it’s a lot more compelling. This is where exemplary customer research really does pay dividends. Many companies don’t do this, as they try to aim for too many opportunities at once and forego what is an essential activity. This is a huge a mistake.
3. The forward path you create
If the prospect connects with your offering and there’s a compelling business case, the final piece of the jigsaw is to make it easy and low risk to move from prospect to customer.
Key to this is a clear and definitive next step. I’ve seen many sales pitches which just end. Full stop. The presenter feels like it’s a job well done but the customer is left hanging. What’s next? Leaving it to chance, or to the customer’s whim, can be counter-productive and lead to an endless sales process.
A definitive next step comes across as both purposeful and professional. It also gives you a great opportunity to qualify the customer, because you can design this step to require active customer investment (effort and resource) which is a useful test of their real level of interest. If the customer won’t commit any effort, there’s a decent chance they’re not that serious. It’s also a great way to get the ear of an executive sponsor, which can be requested as part of the customer’s commitment.
There’s no generic best-practice ‘next step’; a lot depends on the nature of your proposition. What is crucial however, is that the process is simple and minimises risk for the buyer. Put yourself in their shoes – as an early-stage venture, you’re a risk. The buyer may be wondering whether you can deliver, if they will end up looking silly or even get fired for hiring you if it goes wrong. On the flipside, your story has sold them your solution, so your next steps needs to be simple and minimise any perceived buyer risk.
Here are some common options to consider:
- Proof of Concept. This can work for many software ventures provided you don’t have significant set-up costs and your product can deliver tangible results fairly quickly. A key point is that the POC should have a defined timeline and an expected result. Without these bounds, there is a risk on the buying decision. It can feel great to get your software into a customer with a POC, but if it’s loosely defined it can be a recipe for disappointment.
- Business Case. Working collaboratively with the customer to build a tailored business case can be an excellent way to move beyond an arms-length sales relationship into a more consultative mode in which you can build trust. You may get access to information that the customer would not ordinarily share, and they may also reveal details about their business which will enable you to connect with them at a deeper level.
- Commercial guarantee. This sounds scary but it doesn’t have to be. If you understand the customer scenario and are confident in the value you can deliver, you can offer the customer some form of commercial guarantee linked to results. The good news is that your marginal cost is likely to be quite low as you have a digital product at the heart of your offer, so your commercial risk in providing a guarantee may also be low, but it can have huge psychological value for a customer.
Bringing it all together
Having a superstar sales person in the team can be worth its weight in gold, but there’s a lot that founders can do to create the ideal conditions, assets and process for successful sales while they’re on the hunt for that person.
Maybe the story, the business case and the frictionless low risk process you design mean you can sell without a super star. Either way, it will make their job a lot easier when they do finally arrive. Then the fun can really start.