The Entrepreneurial Selling Process Bill Collins 10/11/2015Bill Collins EFP Caltech1

Selling Process Phases  Phase I – “Education Phase”  Set your success pattern  “Invent” your customer  Establish “Lead” customers  Phase II – Volume Sales  Repeat your success pattern  “Mass produce” your customer  Establish predictable sales funnel 10/11/2015Bill Collins EFP Caltech2

Selling Process Phases  Phase I – “Education Phase”  Set your success pattern  “Invent” your customer  Establish “Lead” customers  Phase II – Volume Sales  Repeat your success pattern  “Mass produce” your customer  Establish predictable sales funnel 10/11/2015Bill Collins EFP Caltech3

Quiz: Why do Fish School? 10/11/2015Bill Collins EFP Caltech4

Adoption Challenge 10/11/2015Bill Collins EFP Caltech5 Potential Customers You You are faced with a host of valid initial customers – how do you proceed? CN Rail PGE Xcel Energy Duke Energy Texaco Chevron Exxon Verizon Sprint BNSF Union Pacific AT&T GeoDigital

Phase I Overview 10/11/2015Bill Collins EFP Caltech6 Education Potential Customers You In Phase I, you pick out a few reference-able customers of the same type to win Education intensive – both directions Make “alterations” to fit Allows “characterization” of sale

Phase I Overview 10/11/2015Bill Collins EFP Caltech7 Education Potential Customers In Phase I, you pick out a few reference-able customers of the same type to win Education intensive – both directions Make “alterations” to fit Allows “characterization” of sale PGE Xcel Energy Duke Energy GeoDigital

Portfolio Examples CompanySolutionMkt OptionsChoice/Lead Cust GeoDigital3D Laser Mapping Utility, pipeline, telecom, roads Utility/PGE, Xcel, Duke Energy, SoCo iRiseInt’net SW Finance, Health, Retail, Gov’t Finance/Schwab, VISA, First Am Title, Wells Case StackOuts Logist Consumer Pkg, Food, Furniture, Electronics Consumer pkg goods/Lea & Perrins, Hansens, Celestial 10/11/2015Bill Collins EFP Caltech8

Phase II Overview 10/11/2015Bill Collins EFP Caltech9 Education Recognition In Phase II, you the leverage lead customers to help similar ones recognize the value, rapidly adopt Establish repeatable process Make revenue predictable Pacificorp PSE Arizona PS BPA WAPA

Momentum 10/11/2015Bill Collins EFP Caltech10 Education Recognition Additional types then require less education and have faster recognition based on initial success AT&TCN Rail

Alternate Approach 10/11/2015Bill Collins EFP Caltech11 Education…. Recognition Addressing multiple types at the beginning May feel faster, but is actually slower Education spread too thin Longer for specific types to recognize Recognition still tends to be by one type at a time Education….

Process Benefits  Phase I enables market recognition  Enable market analysts to position you  Enable target company interest in you  Enable funding community to put a value on you  Phase II enables predictability  Financial risk reduced Return on assets can be projected Operational investments scale an established model  Solidify your value to funding community, acquirers Equity, debt, purchase 10/11/2015Bill Collins EFP Caltech12

When Should I Start Selling My Solution and Who Should Sell It? The Short Answers….. Now and You! 10/11/2015Bill Collins EFP Caltech13

Lead Customer Pre-Requisites 1.Reference-ability to rest of target market 2.Location allowing intensive interaction 3.Looking for competitive advantage 4.Have both pain that can’t be solved by others and a specific compelling project or event necessitating solution 5.Sponsorship from customer manager(s) that control priorities and budgets 6.Willingness to engage a start-up company (this is by definition a small percentage) 10/11/2015Bill Collins EFP Caltech14

Ways To Reach Initial Customer Most success comes through relationships In order of effectiveness…… 1. Customer helps found company/is early investor 2. Founder/CEO/CXO has relationship already 3. Engage established partner(s) with privileged access 4. Engage established sales person with privileged access 5. Leverage referral from close mutual associate 6. Leverage referral from distant mutual associate 7. Cold call 10/11/2015Bill Collins EFP Caltech15

When is Phase I Complete?  When you have a credible answer to: “What have you done successfully for someone just like me?”  Complete ~ 5 sales.  Make ~ 5 installations, demonstrate value.  Know why they bought it.  Get at least 2 to be references for value.  Be ready to deliver in production form. 10/11/2015Bill Collins EFP Caltech16

Phase II  Establish, characterize sales funnel  Stages of sale, Cycle-time, Attrition, Resources required, Selling costs  Use funnel to establish revenue plan  Assign quota by resource building blocks  Assume productivity & price changes, lead-times  Measure and drive key metrics  Tailored to your business  Get a professional to run this  Different from a Phase I activity 10/11/2015Bill Collins EFP Caltech17

Funnel Definitions 10/11/2015Bill Collins EFP Caltech18 ItemDefinition Suspect All possible customers who could use solution Target/Prospect Actively addressing to find potential pain, project & fit Lead Established, identified potential project & fit, working to identify opportunity: intent to buy, budget, decision maker, timing, competition Qualified Lead Opportunity confirmed, working to get invitation to present solution to decision maker Present Presentation made, working to get an invitation to formally quote/propose Propose Formal quote/proposal submitted, working to close Close You’ve got the business!

Example Funnel/Pipeline 10/11/2015Bill Collins EFP Caltech19 Target/Prospect Lead Qualified Lead Present Propose Close weeks Suspects 50 4 weeks 2 weeks 3 weeks 2 weeks 13 weeks total

Example Metrics  Choose the ones most important to your situation, such as:  Number of opportunities in each stage  Hot list of accounts at proposal stage  Close ratio  Time to qualify leads  Performance to quota  Actual ASP of deals closed 10/11/2015Bill Collins EFP Caltech20

Channels “Channels are NOT customers, they help you reach your customer” 10/11/2015Bill Collins EFP Caltech21

Why Are There Channels? “Channels enable quality sales time with the customer” 10/11/2015Bill Collins EFP Caltech22

Channel Comparison 10/11/2015Bill Collins EFP Caltech23 CHANNELREACH REQUIRED CAN SUPPORT FIXED COST EDUCATION NEEDED BEST FIT Direct Sales: Push LHH Big ticket items, heavy support, concentrated base VAR’s: Push LLH Mid-sized sales, heavy support, concentrated base Agents/reps: Push MLM Mid-sized sales, heavy support, mid-dispersed base Distributors / brokers:Push MLM Mid/small sales, mid-support, dispersed base Telesales: Push MML Small-sized sales, light support, dispersed base Consumer retail / dealer: Pull HLL Small-sized sales, light support, dispersed base TV / mail: Pull HHL Small-sized sales, no support, dispersed base Internet: Pull HLL Small-sized sales, light/no support, dispersed base, for customers who target you

Using Multiple Channels # Of Customers 10/11/2015Bill Collins EFP Caltech24 Gp A Customer Group C Group B Ch C Ch B Channel A $ Per Customer  You will typically end up using multiple channels  “One size” usually does not fit all

Sales Plan “Building Blocks” 10/11/2015Bill Collins EFP Caltech25 QuotasQ1Q2Q3Q4Y1Y2 Channel 1 Units Price $200K $300K $275K$300K Ch. 1 Revenue $400K $1.2M $2.9M$6M Ch. 2 Units Price $150K $200K $175K$200K Ch. 2 Revenue $600K $1.2M $3.6M$8M Total $ Revenue $1M $2.4M $6M$14M

Attracting & Motivating Sales Forces  Great salespeople / channel companies are looking for two things:  A great solution to sale  High variable compensation  Sales people / channel companies are highly motivated by contests 10/11/2015Bill Collins EFP Caltech26

Top Sales People 10/11/2015Bill Collins EFP Caltech27 SalesmanAct.jpg

Hiring Top Sales People  Top Sales people have common traits:  Have professional & personal relationships with your specific target customers  Each market has a “club” – they are in the club  Consistent high achievers to quota  Consistently number one or close to it  Consistently highly paid  Hire these people - pay a premium if required  Particularly for your early sales team  They are well worth the money!! 10/11/2015Bill Collins EFP Caltech28

Summary  The two-phase selling process drives a successful business  Set the pattern, repeat the pattern  It all starts by choosing similar customers  The key factors are education & recognition  Phase I enables recognition, Phase II predictability  Phase II is for “mass producing” customers  Top Sales people:  Want superior solution, high variable comp  Know your customers, have the track record  Pay them the money – they’re worth it! 10/11/2015Bill Collins EFP Caltech29

10/11/ Q&A

10/11/ Exercise Elevator Pitch