So you’ve moved beyond proof of concept. You have a product that’s earned validation in the market and now it’s time to start ramping up your sales efforts and start building a business. So how is that going?
Sales is the lifeblood of business. Without sales your startup is just a good idea that failed to launch. And as the saying goes, it’s not the idea it’s the execution. So how are you selling your product or service?
What is your sales strategy? How are you going to market? What’s your positioning? How will you market your business? What’s the competition doing? Are the founders or CEO managing sales activity or have you hired someone to do that?
Sure, a capital investment will carry you through the early launch phase, but as many investors will tell you they want to invest in companies that are already showing traction so their money contributes to accelerated growth not science projects.
As a founder, keeping your eye on early sales activity and gauging its success will help you avoid going down the wrong rabbit hole. Going after the wrong target market will not only consume precious time and resources but it can set your business on a dangerous course if your competitors get it right out of the gate.
As you build your business you are going to hear a lot of tall sales tales. Stories of how CEOs singlehandedly build multi-million dollar businesses with nothing but a phone and single minded purpose are legion. There’s no doubt that some CEOs get lucky and there are many that have great charisma and personal networks that help launch amazingly successful businesses.
I’m a big believer in doing the work. Sales is strategic. Sales is tactical. Sales is a process. Sales is methodology. Successful sales systems require hands-on management. Sometimes you get lucky but you don’t build a successful sales program based on luck.
The sooner you start building a sales system the sooner your business will succeed.
Let’s assume that you are Software-as-a-Service (SaaS) business. There are three key metrics you should track and measure all your sales activity against:
- Customer acquisition
- Customer churn
- Lifetime customer value
How your customers pay you (monthly or annual) and how your revenue model works (how you license your product—by user/department/organization) will determine the inputs for your model and indicate goals you need to monitor. The sooner you start tracking these metrics and reporting against them the better.
Remember—hope is not a strategy.