The TechAviv meetup at Stanford University last night sparked a conversation around how to shorten sales cycles. Shahar Nechmad, founder - CEO of NuConomy put this question to the attendees. I have been dealing with sales cycles for quite some time and would like to offer these observations on how to shorten sales cycles for founders like Shahar. In NuConomy's case, as with most startups the goal is to get a smaller company's "stuff" onto a larger company's platform. The "close" is identified as the moment the smaller company's "stuff" (read code, tags, API calls etc.) actually gets installed on the pages of the larger company's site. The mistake most BD and sales people make is to think there is just one sales cycle. This is simply not true. Often there are multiple cycles that need to be overcome to win an account and truly shorten the time it takes to get your "stuff" integrated. For technology sales, even if the product is free as is the case with many tech startups, there are often three distinct sales cycles that need to be identified.
First is the sales cycle of getting buy-in from the senior business officials. This process involves standard sales practices of setting meetings, giving presentations and creating a sense of urgency to act. This is usually not where the delays come that cause sales cycles to extend unnecessarily.
The second cycle often comes from selling senior ranking product folks who also need to be convinced to act from a platform perspective. More and more companies are moving to an internal opt-in basis, as business units inside large companies can make their own choices on what to adopt or not. That said, senior product folks need to "bless" the idea before individual business units can have the choice to opt in or not. Working through this sales cycle requires a different set of selling points. The mistake here is to use the same tactics and collateral with product folks as you might use on the senior business folks. As a general rule, product folks must look out for the enterprise platform, so by nature they are in a more protective mode. To answer these concerns, materials and pitches that deal with safety, security and stability will greatly shorten the evaluation period.
Third is the sales cycle of getting the actual programmer or developer to integrate the code on the page. After senior officials and product leads say ok, the last step often lies with the developer. Often times this is where startups lose control and watch months pass without getting installed or integrated. It happens to all of us, without exception. First, a sales or BD person must treat this sales cycle with the same care and attention as they do with the other constituents. This is where big mistakes are made. Sales and BD folks tend to think that once they get to the developer level they have the power to "tell" the developer how it's going to go. This is a blunder that can cost you in months, not days from getting installed. Second, developers do not want to be sold, and the thought of being contacted by a sales or BD person is most often sickening to them. To avoid this find out asap the best way to communicate with the developer who may have your "stuff" on their list of todos. Often times developers do not want to be called, but rather prefer only email. If you find this out early, you can shorten the sales cycle without doubt. Third, when you get emails from developers look at the time stamp on the emails. Often times you will see email sent at off-hours. This is a clue as to when is a good time to send an email that will be looked at and maybe replied to immediately. Often times, a simple reminder or inquiry to the progress of an installation is enough for a developer to squeeze your code into the next item on the todo list. Lastly, don't forget who helped you. Once installed send a personal thank you to the technical team for installing your "stuff." Usually there aren't a lot of thanks going around in the back offices of IT or R&D of a big company, so let them know you appreciate the effort. It will go a long way when it comes time to expand the installation or get recommended to another business unit.
Although there can be three sales cycles within one deal, a sales or BD person does not have to follow the above order. In fact, one can shorten a sales cycle drastically by starting the deal with a developer level contact or a product person. These folks have the power to put a piece of code on a page, and this is the first step in proving your worth. However, tread carefully as this approach does have its risks as senior business people don't like to play catch up so keep this in mind.
Any other good suggestions please comment and I will post an update on further best practices for shortening sales cycles if warranted.
Overall this is one of the biggest challenges for BD folks and startups in general and one that I quite enjoy working on. This is actually a good panel topic for a future talk. If you are interested in exploring ping me.
Thanks to Yaron Samid, founder of TechAviv for another great event.