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5 Common Sales-Related Mistakes Startups Make

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5 Common Sales-Related Mistakes Startups Make

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Even though we broke down the sales process to the three main steps of prospecting, pitching and closing, as a person who has been selling within the African market for 20 years, I wish I can say the practicalities of day-to-day operations were as easy as they sound.

Because selling is a difficult skill to master, there are a lot of nuances that can trip startups if missed, and in this post, I’ll cover some of the sales-related mistakes being made within the ecosystem.

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  1. There is No Product to Sell

Sometimes what startups try to sell — mainly to investors — is the idea. Instead of taking time to build a prototype or a minimum viable product (MVP) using the resources they have, they jump from one investor meeting to another to sell them the idea.

They’ll present facts like what the potential size of the market is, and how their research shows the problem they’re trying to solve is a huge one, and how they’re well-placed to build the solution. However, investors would rather see an MVP that has already been tested in the market with relevant preliminary metrics (number of sales made, etc…).

This is not to say that selling an idea to investors with no product doesn’t work at all. We live at a time when it does — sometimes — but it shouldn’t, because it’s really hard to prove product-market fit with no product.

2. There is No Sales Team

It’s strange to walk into the offices of startups and discover there’s a tech team and a product team, but no sales team. If the startup is at its inception and it really, really, really cannot afford a sales team, then the founding team should dedicate a percentage of their time selling.

Unfortunately, co-founders/CEO’s tend to value meeting investors rather than potential clients even though a strong sales record would help present evidence so the company could receive funding.

3. Selling to the non-decision makers

Just because a company is a prospective client doesn’t mean your point of contact within that company is a decision maker. Ideally, as a sales representative, you would want to bring in the decision-maker to the first meeting, and determine if your solution is within their budget. However, that’s not always possible because of hierarchical charts within organizations so you might need to meet and pitch to several other people before you reach the decision-maker.

4. Targeting non-consumers to pay for consumers

This is interesting and while it’s commonly seen within a diverse group of startups, we’ll use Edtech to illustrate. Products are built for potential students, but then instead of investing in a sales team to sell the product to schools and students, the sales team goes to the CSR department of corporates to sponsor hundreds of students at one go.

Similar to the “sell company to investor” path, this is seen as a path of least resistance. However, even if it appears lucrative in the short-term, it’s ineffective in the long-term because it’s not sustainable.

This action may lead to deals being made and cheques being signed, but the startup isn’t capturing the market directly. Instead of selling to the students and relieving their pain, they sell to the CSR department to create more gain for them in terms of a good press release, etc. This leads to a disconnect from the actual market, because you’re selling to someone who doesn’t really need to use your product.

Also, not many corporations have CSR programs to begin with, and just because a company paid for your program once doesn’t mean they’ll pay again. When it comes to CSR projects, companies like to vary them from year to year, or else they become monotonous.

5. Not following up with clients

Startups think the selling process ends with closing. However, following up with clients to understand their satisfaction with your product or service.

Selling to the market directly is hard.

It’s slow and time consuming but it is the best long-term strategy for any startup. It provides useful market research and as a startup you’ll be informed early on if there’s product-market fit for your product.

Co-written with Amina Islam

 

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