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B2B sales for startups / SMEs should be strategic - not operational

Every entrepreneur understands how important sales are for the survival and growth of their company. Without sales and customers they can't grow.


But that is equally true for operations, finance and human resource management. All of those are crucial for the survival and growth of a company. Without operations there won't be a product or service to sell. Without human resource management there are no people to produce or sell. So why stress the strategic importance of sales?


It's all about the customer's problem


Even though I run the danger of sounding like a broken record, again, it is all about your ability to solve your customers' problems. If you can show that you can solve customer problems that have a large enough impact on the customer's business results - you have a sale.


And without a sale you have no reason to produce or to hire people.


Therefore your (B2B) sales efforts need to be at the core of your management efforts. That means that someone in your core management team has to have regular sales contact with core customers - to ensure that actual and direct customer understanding is constantly present when making management decisions.


In many larger corporations this is no longer the case. The managers representing sales only have indirect customer knowledge as they are too busy managing the large sales organisation to visit customers themselves. And while there are modern management techniques, like sales centric organisations, which allow sufficient customer insights to flow through the entire organisation, this is often not the case.


Customer understanding has to drive your development


But for a startup or SME is would be a death sentence. Only through constant contact with your customers can you fully understand your customers' problems. And how they differ from customer to customer - because no two customers have exactly the same problem. Their operational needs might be the same, but their impact and their "why" will always differ. And often that requires slightly different solutions.


Keenan in his must read B2B sales book "Gap Selling" is giving a great theoretical example of two managers looking for a remote management software to be able to work more from home. One of the managers requires it because she hates the commute. It doesn't matter to her that the software is a bit more time consuming. The other wants it because he wants to spend more time with his family and is requiring something more efficient.


This type of customer insight has to drive your product or service development. In other cases like the one I am describing below, it has to drive your operations. But in either case, it is crucial that the customer insights sit at the management table - always!


Strategic understanding should drive sales deals


In my very first sales role I was managing sales for a "cuckoo clock" giftware startup. And we were financed through several credit card overdrafts with a disastrous cash cycle getting crushed between large suppliers, either demanding payment ex warehouse or even advance payment, and large customers having 90 days upon delivery as standard terms.


But I found out that for some of our customers payment terms were just a standard clause, not something of importance in their decision matrix, they had significantly positive cash-flows.


Therefore in one case I was able to negotiate payment upon delivery in return for expedited shipment. The customer was planning a large promotion and the buyer thought our product would fit perfectly but they needed it soon. We had to re-plan our production schedule and smooth out some shipping issues for this. In another case I negotiated a significant discount for quarterly forecasts and advance payments.


In both cases we took significant hits to our deal margin - but by cutting the cash cycle 90 and 120 days short, we were able to do additional sales, sales we otherwise would not have had the liquidity to finance. So while our margin tanked, our return on investment rose significantly and we all went home with a lot more money. All while our market share grew and our customers were perfectly happy to get deals, which solved their unique business needs.


Therefore the people actually closing sales have to be present(ed) at the management table in order to:

  • Provide customer insight to drive management decisions

  • Have the insights and understanding to make deals which serve both the customer's and the company's needs

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