The secret to succesful B2B selling

By Thomas Klem Andersen, December 4th 2015

Explain why it matters

It’s often a challenge to explain what we do and why it matters to people. When it comes to our selves we tend to focus on function/role and when it comes to our products we tend to focus on features and we forget to explain why those are super interesting. Variations on this refrain is “I’m an accountant…” or “This computer has 1,2 GHz…”. Boring right? What you are really selling is the value that this role or these features provides. They will let you do something cheaper, faster, smarter, different, less, etc.

The product itself is not interesting to people. More often than not, they will be too busy or too absorbed in habitual ways of doing things to bother listen to you.

Your target customer doesn’t care if your fancy plate is round or square as long as it is full!

You need to convince your potential customer that the ground is burning underneath her feet and that you can provide a preferred alternative!

Help your customer to succeed

You don’t want to let your selling proces be driven by hunger or neediness. You don’t want it to to be driven by manipulation either, which might happen if your main focus is you and how you’ll meet your sales KPI´s. Rather your selling process should be driven by your ambition to help your customers to success. If that is your outset your sales meetings will be about the customer, the customer’s needs and whether your solution might be the right one to help your customer meet them. Your meetings will be much more calm and honest. You’ll earn more and feel better at the same time.

Your primary initial objective will be to ask your customer to help you help them by clarifying their needs.  

Spend your time well and involve the right people

Let’s get into the nitty gritty of the actual sales process. So you have the customer meeting scheduled… It’s important that you stay in control of the process. This is the trick to close the deal.

In order to do this you should divide the customer meeting in two. On the first meeting you talk to the stakeholder who owns a particular problem and on the second meeting you present your solution to the problem owner AND the decision maker!

On the first meeting you go through two phases:

1. The gentleman’s phase

Like a true gentleman you honsetly present yourself but without neglecting your merits. This is when you establish trust and earn your position as potential partner. You make it clear to your customer that you are here to help them:

”My ambition today is in colaboration with you to assess what the right solution is for your company. To this aim I’d like to begin with asking a few questions. Is that alright with you?”

1.1 The opportunity phase

The questions you ask you can structure in accordance with the CORE model:

• Context: Get the big picture and start a dialogue about relevant problem areas.
• Obstructions: Explore potential problems and evaluate whether the problems that you can provide solutions for are present. What are the related costs?
• Results: Determine the specific consequences of the identified problems.
• Expressed Needs: Let the customer confirm that it would be valuable to solve the problem.

Nice and slowly you build a business case and get your customer to describe a problem for which you can offer a valuable solution.

Your success criteria is to schedule a second meeting where the key decision makers can participate. This second meeting is crucial, because a written proposal or a telephone conversation can easily give rise to misunderstandings and jeopardize the communication at a critical stage.

”I won’t send you a written proposal, but I will prepare a presentation for you and others who will have to take part in this decision. It’s an important decision and we need to make sure that it make the right one.”

The mindset you’ll need to have in order to secure this second meeting is that you are both equally important partners in a negotiation and therefore you need to frame it accordingly. They need to comit as do you. Your time is equally valuable.

”At this point we also need something from you… We need a ”go” from your boss or whoever will have to make the final decision, that your company is interested in seeing a solution proposal for this particular problem.”

If it is not possible to have the decision maker at this second meeting you need to seriously consider if you want to buy this lottery ticket by sending a proposal or spend your time somewhere else. This of course depends on how many interesting leads you have.

”What is holding you back from saying yes to this? …so if we can fix this such and such will you arrange the meeting or buy the solution?”

Respect the three essential principles of selling

Thoughout this entire process, in order to to sell well, you need to keep an eye on three essential principples for selling. These are the fire triangle of selling:

With all this in mind, you should consider inverting the traditional sales process. Traditionally you spend the most time presenting your product and closing the deal. With the explorative mindset described above in which the ambition is to help your customer to success you’ll have to divide your time like this and in the following order: Introducing (40%), exploring (30%), presenting (20%), closing (10%).

Now go help your costumers be successful!

Test commercial feasibility and do the easy stuff first

By Thomas Klem Andersen, Published on september 14th 2015

This week Jakob Svagin from Scion DTU and Andreas Cleve Lohmann from Copenhagen Lean Startup circle are challenging the participating hardware startups in Danish Tech Challenge on their value propositions and market assumptions. Here are some insights from the kick off talk yesterday when the lean-rubber hit the road.

Running lean is different than “just doing it” (a mystic approach to entrepreneurship based on intuition) and the approach of traditional innovation management (an approach based on plans, specs and waterfall processes with way too long feedback loops). Running lean is neither about chance or planning rather it’s about optimizing learning under circumstances characterized by extreme uncertainty.

You have to build to test. And there’s a bunch of things you can do without even building anything because it’s crucial that you test your entire business model and not just the technical feasibility. Sure you need to test your technical solution. But you need to conduct commercial experiments and generate commercial data as well. 

Recognize that your big vision is based on assumptions and they all need to be tested. Test your value hypothesis, your market hypothesis, your growth hypothesis – which include sales channels, partners and customers. These are all part of the uncertain context which your technical innovation needs to adapt to in order to achieve problem-solution fit and product-market fit.

You should build minimum viable products (MVP’s) of your actual product. But you should also build and hack MVP’s for how you interact with key partners, suppliers, users and customers. You can do that very early on and long time before you finish your product development (if you ever do). It’s never fun to be sold a bad product, but it’s always fun to be part of building something that can become big, so have an inclusive mindset from the start.

Most likely your potential customers aren’t out there actively looking for you. So the questions you need to ask yourselves are:

•          How can you make them care?
•          Why is your product valuable to them?
•          Do you know their criteria for buying?

Your technical product development might take six months or longer. But testing commercial feasibility can be done in a matter of days and is essential to developing a sustainable business model. So go do the easy stuff first!

Our Dangerous Obsession With The MVP

TechCrunch blog post March 1, 2014 by Bill Aulet (@BillAulet)

Editor’s note: Bill Aulet is the managing director of the Martin Trust Center for MIT Entrepreneurship and a senior lecturer at the MIT Sloan School of Management. He is the author of the recently released book, Disciplined Entrepreneurship: 24 Steps to a Successful Startup.

Building stuff does not make you a startup.

“But don’t we need to build stuff and iterate quickly?” I get asked a lot.

Well, sure. Once upon a time, when companies used the “old-school” waterfall model to develop products, pushing entrepreneurs to think in terms of building a minimum viable product as quickly as possible made sense. It substantially accelerated the development process. By narrowing the product scope to core features, you start the customer feedback loop quicker and you can more rapidly iterate based on that feedback.

But the pendulum has swung too far toward building stuff and away from spending some time getting to know your customer first. And the result is that more startups are building blindly, without focus, as well as falling victim to the “IKEA effect.”

The IKEA effect, coined by Michael Norton, Daniel Mochon, and Dan Ariely, is that when you make something yourself, you value it way more than you should. The trio did tests showing that amateur origami makers valued their creations as equal to those made by experts – even though the expert-created pieces were objectively of a much higher quality. The phrase is named after the well-known Swedish furniture chain where “some assembly required” is an understatement. As a result, as soon as we build something, we all tend to move increasingly from inquiry mode to advocacy mode at the very time where the former is needed and the latter can blind us.

As soon as we build something, we all tend to move increasingly from inquiry mode to advocacy mode at the very time where the former is needed and the latter can blind us.

One of our recent alumni teams, who will remain nameless for reasons you’ll quickly see, is absolutely in love with the technology they have created. They have developed some impressive award-winning technology which has the promise to significantly improve the Human Computer Interface. They have built a demo that is in high demand, and each time someone expresses interest in a piece of their technology, they get excited and add some more to address the interested party’s desire. With their demo and impressive technological skills, they have gotten money from business plan competitions and investors, which I think is possibly the worst thing that could have happened to them.

Neither the “someone” watching their demo at a conference nor the business plan judges nor the investors are paying customers. What the team calls an “MVP” is simply a sexy proof of concept. They say they are testing hypotheses, but the hypotheses they are testing relate to technological feasibility. They claim they are “pivoting” – which means they have run out of business ideas but not money – on a regular basis. And as a result, they’re not making progress.

Why are they devoting all their time and money to building when, as a startup, they have precious few resources? Because they built it themselves, and they love it, and they’ll be darned if you tell them their MVP isn’t attracting any paying customers and that they should instead focus on an honest dialogue about customer needs. They are too beholden to the IKEA effect. They claim to be in inquiry mode but really are much more in advocacy mode for what they have developed.

Compare this to another recent alumni team, FINsix. The company won recognition and a slew of awards last month at CES for its product, a miniature laptop power adapter that is a quarter the size of today’s power bricks.

But when they first showed up in my class, they only had a promising technology from the labs. I’m sure that power supply geeks will be impressed by Very High Frequency (VHF) switching that is 1000x faster and with a 10x reduction in converter size. “The elimination of heavy components, like magnetic core transformers, enables superior resistance to mechanical shock and vibration,” according to their website, which sounds like a good thing, too.

However, none of that helps a well-defined group of customers address a pain that they’re willing to pay money to address. FINsix recognized that, and so rather than build, build, build, they took some time to learn about customer needs.

“We were able to test the [VHF switching] concept with many different markets using an electronic brochure and extensive surveying to determine our beachhead market of laptop power suppliers,” co-founder and CEO Vanessa Green told me. A brochure.

There is a lot less emotional investment in an electronic brochure than an MVP that the engineers build. And their analysis allowed them to consider a range of markets, from cell phones to LED lighting, before determining that laptop power adapters were the best way to gain a core group of paying customers that would sustain the company so that it can develop more products.

You can’t develop the right product for your customer if you fall in love with a prototype that nobody wants to buy.

Had they fallen in love with their technology, or the first prototype they built, they may never have gotten to the point of selling a consumer laptop charger. Think that app makers are immune to the dangers of an MVP? Sure, an app has less initial investment required, but otherwise, a business is a business. It’s easier to spin the roulette wheel when you don’t need as much upfront or sustaining capital, but that doesn’t mean you have a solid startup.

You can’t build great products in the dark, without a well-defined customer. And you can’t develop the right product for your customer if you fall in love with a prototype that nobody wants to buy.

So unless your end game is hoping that before the money runs out a competitor will buy you for your engineers or technology, you need to stop obsessively building, and start an honest dialogue with potential customers about their needs. It may not be as fun as tinkering with a “product,” but it is far less stressful than playing the acquisition lottery. That is what we call “disciplined entrepreneurship” where you can have both great technology and great marketing, leading to epic products. It is a false dichotomy to think you can only have great technology or great marketing, as some commenters have recently claimed in a myopic comparison of Stanford and MIT graduates.

Think I’m a conservative East Coast entrepreneurship instructor who’s behind the times? Last week when I was in San Francisco and chatted with David Bergeron of T3 Advisors and Cory Sistrunk and Ed Hall of Rapt Studio, they were right on the same page. “The MVP mentality has unintentionally taken us away from ‘user-centered design’ and a focus on the customer,” they told me. “We have to focus on the WHY before we can focus on the HOW and WHAT.”

For the entrepreneur, stop obsessing about your MVP.  Your first question, before HOW and WHAT, has to be “FOR WHOM?”