Sales Strategy · B2B

Sales tactics for corporate clients want things faster than possible to deliver?

Alison Lewis CEO/Creative Director

May 22nd, 2016

Ok. The background: Our stuff is almost always used for PR campaigns or activations. It's hardware based with a software component.

I have done up to 10 proposals to potential clients in the past year. All of them want the dang product in less than 2 months or in 6 weeks or something similar. And, I mean ALL OF THEM. It's good to know it's a trend. 

Who can complain, right? I mean obviously people want what we are making but a little cheaper and faster with a few personalized touches. We can do it, but not in that timeline.

It's a hardware start-up. These timelines are only possible with everything pre-ordered and on the shelf and ready to assemble. To do that will cost $500k or $1.6M if you really want us to be prepped. 

What investors say "tell me when someone signs an agreement" and I'm like "that can only happen if we are prepared to deliver on time and budget, put in the cash and let's make this happen."  Their response is SILENCE. I don't have time to chase them for 3 months to get the money and then loose a client. And frankly, we want angel investors who are awesome risk takers like us and like to support real vision and not just numbers. That's hard to find in SV; it's really a conservative place.

I digress. We've been stuck in this crappy catch 22 for a year at least and it's getting old.

Who has had this issue?  How the hell do we get around it and get one of these corporate people to bite or extend a deadline or activation? What's missing to make it clear the timelines and still get the job?

I'm a not a sales person, I am an innovator, so I am sure there is something I could learn here. Totally open.  

Mike Moran Senior Strategist at Converseon

May 23rd, 2016

I think Shel's idea is an interesting one, too. Provide equity but retain control.

Kevin said what I was trying to say a lot more succinctly. Clients who can't wait aren't your clients. 

Mike Moran Senior Strategist at Converseon

May 23rd, 2016

Hi Allison,

You might need to change your idea of what a sale is. 

I can't be sure from your description, but I think that I have been in this position with many of my startup clients. When you say that they want what you are making, what you really mean is that they would want what you are making if you actually had it--which you don't, at least now when they want it. So, you need to differentiate between whether you just need one or two early clients to get you over the hump or whether this is an endemic problem to your business that won't go away.

So, ask yourself this, "If you had already delivered this to one (or two or three) clients, would you still have this problem?" Is this investment and delivery cost a startup problem where you need to get over the hump or is this something that faces you for each and every client forever?

If it is the latter, you obviously need a strategic investor and you will need to give away a significant part of your company pre-revenue to get that. But if this is a one-time problem, you might need to change the idea of what a sale is.

In that case, a sale is not to get a client to accept a proposal for what you wish you had. A sale is to get a client to buy what you actually have, which is an expensive, slow solution to this problem. I know that once you get over the hump that you will be able to sell it cheaper and faster, and that your experience with the proposals so far might give you a waiting audience, which bodes well for your business.

But your first (or first few) sales have to be focused on the problem at hand, not the going business you hope to later have. It's all about cash flow. So, you need to start looking for different clients than you have written proposals for and you need to write a proposal for the $500K or (gasp) $1.6M that you really need. That means that you are looking for:
  - A big company
  - A company who is dying from the problem you solve
  - A company for whom solving this problem is worth multi-millions
  - A company for whom solving this problem is a competitive advantage

And you need to treat them more as a partner than as a client. It could be that you need to actually make them a partner in your company, but maybe not. You might be able to get away with giving them exclusive use of your product for three years within their industry or giving them a list of other companies you agree not to sell to withing that time frame or something else that gives them the advantage that they need.

In other words, you need to find a company for whom the pain is so bad that they will put up the money you need and wait the time you need. It doesn't matter that you have found companies that will buy when you are a going business. What matters is that you need to find a company who will buy what you can actually sell now. Perhaps you could go back to a few of the 10 companies you approached in the past to see if they would be willing to split the startup costs and wait if they each get some kind of exclusive in their industry. Or maybe you could find a company who is a channel for the companies that you eventually want as clients--if you are selling a PR solution, perhaps you need to find a big PR agency that is willing to sell you into several of their clients in return for an exclusive for a few years.

But I think you need to change the way you are thinking to match the proverbial vegetable guy. Each day he sells what he has on the truck today. He doesn't tell people he will have avocados next week. He sells the cucumbers he has on the truck today. 

Sell what's on the truck. That is when you find out how good a salesperson you are. It's easy to feel like a good salesperson when you just offer people what they want. It's harder to sell what you actually have. When you do, I think your problem is solved.

Good luck.

Sandeep Patel Accelerate Your Products' Time-to-Market through Automation | Industrial Automation | Custom Automation

May 23rd, 2016

Have you considered asking the clients for deposit upfront? Depending on your product, you may be able to take up to 50% deposit with the purchase order.

Peter MAICD Peter Strohkorb | Helping you boost Sales through Smarketing® | International Speaker | Author | Executive Mentor

May 22nd, 2016

Hello Alison,

Have you considered crowd sourcing through a a Kickstarter campaign ?

Bill Lennan Red Rope Social - everyone is an influencer.

May 22nd, 2016

Hi Alison,
first I recommend reading Dan Pink's book "To sell is human". It completely changed how I think of sales. 

second - is your hardware buyer a consumer or a business? can you Kickstarter it? or license the IP to a hardware company? or get a loan based on having enough sales contracts to cover the loan amount?

Personally, I like selling an MVP and then use that as a springboard. 

Shel Horowitz I help organizations thrive by building social transformation into your products, your services, and your marketing

May 23rd, 2016

One more variable. Mike said "Perhaps you could go back to a few of the 10 companies you approached in the past to see if they would be willing to split the startup costs and wait if they each get some kind of exclusive in their industry."

That got me thinking, if your serious prospects are not direct competitors with each other, maybe each of them could kick in 10-20% of what you need (with rewards down the line, obviously)--and then, even if you're providing some kind of equity stake, no one stakeholder has control.

Eric Sullivan CEO at FoundationLab

May 24th, 2016

Hey Alison, I spent a little time years ago consulting for some enterprise software companies backed by VC's like Accel. The reason I kept ending my contracts early was because of their sales tactics and I know a lot of companies do this but I find it ethically wrong. Client signs on for a large contract while the company would be promising that everything is ready to go, yet they have not built that solution specific to that client. Yes it gets you the deal and gives you some runway but boy does it create a lot of stress for everyone on the team. I was in marketing and we felt the heat coming down from the CEO and CTO. But then again I have seen many companies do this. Your call just some insight.

Rob G

May 24th, 2016

Alison, this could be tough to ferret out here, but something isn't adding up. Qualifying a prospect includes a lot of things including their need for your product and their ability to pay.  If a prospect wants a $1M home built in 6 weeks and only wants to pay $.5M then they are not qualified.   A qualified prospect will engage with you to resolve the issues standing between them and your solution to their problem.  It sounds to me like you have not found a truly qualified prospect yet. You say they want your product in 6-8 weeks and 'for cheaper'.  Can you share how long it would take you to provide your product and for how much "cheaper"? Are we talking about 12 weeks and $80 VS $100 or 12 months and $8k VS $100k? 

Alison Lewis CEO/Creative Director

May 22nd, 2016

Thanks for the book reference. I think I sell w/out thinking about it - because I love what I do sooo much! 

The buyers are usually business, but many put the product on consumers or sports people. How does one get a loan w/out putting up their own personal collateral?  Not in a position to do that at the moment. 

We are researching Kickstarter, it's not as straight forward as I'd like it to be and requires some R&D. But, yes, it's possible. 

David Pariseau

May 23rd, 2016

In light of the feedback have you revisited your assumptions on cost and timeline?  Are you convinced that your costs are as low as you can get them and your timelines as long as you state?  Is there anything you can do to reduce your costs or accelerate things?  If so, what are the trade-offs there?  It seems like this would be a first real sale for the company, so how stable is the product, has this been tested extensively?  What's the risk of getting this out to the market and having to recall or service/support that large an order?  Such an event might well be fatal, so how comfortable are you with the hardware/supply chain?  Does it have all the agency testing/certifications?  I'd be happy to spend a few hours to review what you have for free and share any insights, thoughts and suggestions with you if you'd like.  But, you should definitely assess the risk of your initial sale.  Ideally you'd run a limited trial before attempting an million dollar sale to work out kinks in your design or supply chain.   Finally, I would look to your supply chain as a potential source of investment, you may find them to be your best bet.