We’ve recently started talking to venture capital firms. We weren’t really sure, when we started, if we had much to offer. But there’s one thing nice about venture capital firms:
They are always searching for an objective viewpoint to help them decide on how to grow their businesses—both within their own companies and those that they are looking to purchase.
As you may or may not know, most venture capital firms operate around EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization). EBITDA is calculated by taking operating income and adding back to it depreciation and amortization expenses.
EBITDA is used to analyze a company’s operating profitability before non-operating expenses (such as interest and “other” non-core expenses) and non-cash charges (depreciation and amortization).
While a lot of this may be out of the control of a sales team, what’s not is the revenue and profit that goes into the earnings portion of the EBITDA equation. I know, without a doubt, that what we do can positively affect that!
So, what are the biggest problems that cost companies money? We have found that the biggest offender is not having a sound, comprehensive sales strategy.
The sales strategy is made up of 3 things:
1. Your company’s Philosophy
2. Your company’s Orientation
3. Your team’s skills in the Sales Process
What is Your Company’s Philosophy?
If you set out to sell to any warm body, and not with high intent (operating in the best interest of your prospect, regardless of outcome), you are wasting money. You should be working with people that have identified a problem that they believe can/should be fixed, they have the money to fix it, and they want YOU to help them fix it. If any of these things don’t exist, walk away.
What is Your Company’s Orientation?
If you think you can sell on the great “features and benefits” of your product, you’re wrong. You need to be excellent at identifying and communicating the value of what you do and who you are.
What are the specific problems that you solve for your clients and what is the impact of solving them? That is what brings you value. Only then can you relate your value to the “pain” that exists within your client’s world.
When you have an orientation that is focused on you (the selling company), then there is no space for the prospect’s pain to come forward. We have a saying. It’s not very clever but it works: Solve big pain, make big $$.
Is Your Team Skilled in the Sales Process?
I guess I should ask, first of all, if you have a sales process? Our experience is that most sales people “wing it.” They don’t have a consistent method that they follow to lead their client from opening dialogue to implementation.
This is the root of many evils. Without a consistent method, we tend to use too many resources to chase deals—deals that will never happen. Without a consistent method, your salespeople often feel the pressure of not knowing what’s next or how to handle pressure situations.
If your sales team is confident in their process, they operate with confidence, they communicate the value message better, they call higher, and they sell at a premium.
If you are a business owner, don’t fall into the trap of thinking your sales team is “broken.” It might not be that they need to call on more people, have more appointments.
The problem might be that they are not effective in the calls and appointments that they have. What are you arming them with? Our belief is that arming them with a comprehensive sales strategy directly affects your bottom line and will exponentially increase your business.
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Thanks for the wake-up call. md