When building my influencer marketing startup Trigami, our idea was simple: we build a self-service marketplace, customers will come on their own, and we will be in the middle, collecting our fees. Simple.
The reality turned out different. Our customers wanted someone to guide them, do as little work as possible, and reap the wonderful results.
So we had a startup, basically no revenue, and cash-hungry influencers.
What to do? We had to learn Business-to-Business (B2B) sales.
And we made all the mistakes in the book:
- We targeted the wrong customers: We focused on cash-poor startups, instead of companies with juicy marketing budgets
- We didn’t define a minimum campaign budget: While our competitors required a €10k minimum, we sold campaigns for as little as €300
- Too small gross margin: We transferred our “marketplace model” to our manual “agency model”, charging way too little for our service
- We didn’t have a clear sales process and sales funnel
- And worst of all, waiting 18 months to hire our first sales manager, leaving me as the only sales person
It was leading nowhere. So basically we had two options: (1) go out of business, (2) learn how to sell. We chose option two, and quadrupled our revenue in the next 12 months.
Here is what I learned:
First, give this topic the right importance. If you want to survive, you need revenue. If you want to make a profit, you need revenue. If you don’t want to depend on investors, you need revenue.
Revenue, and profit, are the oxygen of each small business. You can have the best product and the best employees in the world, if you don’t manage to make more than you spend, you’re going out of business.
It’s so easy to get distracted when you start a startup. You have a million things to do. Everything seems important.
But nothing is as important as revenue. So at least one co-founder needs to take charge, and be responsible for it. In our case, it was me.
Read the books, go to the seminars
If you’re like me who never built a B2B sales process before, I recommend you start at the very beginning. Go to Amazon and find the three best books on the topic, and read them.
In my case, I found Umberto Saxer and went deep. I read his book, I listened to his audio programs, I purchased his video programs, and I went to his seminars.
Other books I recommend:
This gave me a strong foundation for the next step.
Hire the right people
Next, we hired our first sales manager. We were lucky. He was an excellent choice.
Unfortunately it’s not possible to know how well a candidate will perform on the job. Most of the time, we simply followed our gut feeling about who to hire.
We made some good hires, and some bad. That’s part of the game.
Invest in education
We invested a lot into education. We sent every sales manager to an Umberto Saxer seminar, and provided books and audio programs on various topics, from self-development, to productivity, to sales.
We built a culture of lifelong learning and encouraged all team members to constantly improve themselves, providing time and budget to do it.
Fire the wrong people
A new sales manager produces tangible results in the first month or two. If they don’t, they never will.
We made this mistake so many times. You wait. You hope. There’s always a reason why next month will be better. It’s deeply frustrating for both the employee as well as yourself.
There’s only one solution: When in doubt, make the cut. It’s hard, I know. But waiting doesn’t make it better.
The job of a sales manager is to sell. If they can’t, you need to find somebody who can. Or else you’re on the way to getting out of business.
Have a lead-generation flywheel
A sales organization cannot be effective without strong lead generation. If all you do is cold sales, you likely won’t get very far. You need qualified prospects and hot leads.
Here we had an advantage.
Our core product was sponsored posts on blogs. To not be misleading, we required every blogger to label their sponsored posts. And not only label them with something like „This is a sponsored post“.
Instead, we branded the label with our company name, and most importantly, included a link to our website. So each campaign for our clients, be it NIKE or RedBull or Disney, turned out to be a free campaign for ourselves. It was a marketing flywheel. And it was our #1 lead generation source.
There are many different ways to generate leads. You can purchase Google or Facebook ads. You can have a dedicated person doing outreach to new prospects (more on this in Predictable Revenue). Or you can integrate it into your core product like we did.
We achieved the best conversion rate by including our “get a free quote” form right on the homepage on the center of the screen.
You’re the key account manager
As the co-founder who is responsible for sales, you are the key account manager. Building relationships with key clients, and smoothing out relationships that face the risk to turn sour.
The cool thing is: customers love to speak to a founder. You are a VIP and a mini-celebrity. Make use of this influence.
Constantly improve the sales process
It’s important to constantly experiment and find ways to improve the sales process. Keep what works, discard what doesn’t. That’s the only way how to get better and better.
Our process was optimized for direct customers. A customer would request a free quote. We would call them by phone to learn what they really needed. Then we’d prepare and send a campaign proposal by email, and follow up by phone, until the sale was confirmed. It was quite efficient. No physical meetings required.
One of the most important decisions was to require up-front payment for all campaigns. We did this from day one. That way, we never had cashflow problems and never needed to create a money collection process. Simple and straight-forward.
One thing we weren’t good at is selling to media agencies, and to win them as partners. This would have required a completely different process, which we were never able to build.
Have a strict CRM policy
To be able to improve your sales process, you need data. From the beginning, we had a super strict CRM policy. Every customer interaction had to be documented. The rule was: if it’s not in the CRM, you won’t receive a commission.
How to compensate sales managers
This was a difficult topic for us, and to be honest, one we haven’t found a final solution for. So treat my comments below as ideas, not instructions.
We ended up paying a modest fixed salary, plus an attractive sales commission.
But as the sales team was the only team that received a commission, this caused conflicts with the other team members.
The underlying problem was that for our sales managers to be effective, they needed the support of the rest of the team. But they were the only ones getting “a cut”, which didn’t seem fair.
We were not profitable yet, so our general compensation level was below average. Maybe this was the underlying problem, and being able to raise our salaries to market rates (or above) would have solved it for us.
One idea is to find a way to incentivize the whole team, to align the interests of everyone, not just the sales team.
I like the philosophy of Basecamp. They don’t employ any sales people, and they are an established and profitable business, so it clearly doesn’t apply for everyone. If their total profits grow year over year, they distribute 25 percent of that growth to all employees, equally, not tied to role. This seems like a fairer solution.
Our model ended up creating two cultures: A sales culture, and the rest of the company. It’s better when the whole company is geared towards sales, and everyone is tasked to help the sales team as much as possible.
Whatever you choose, keep the compensation models as simple as possible. We created a complicated monster that was an administration nightmare.
I also recommend avoiding “rainmaker” deals: hiring someone who works 100% on commission. It never worked out for us.
We 4x our revenue in the first 12 months, and achieved 1 million CHF in revenue after two years.
Without learning how to sell, and actually doing it, we likely would have gone out of business.
Thanks to Marc Hauser and Silvan Krähenbühl for reading drafts of this and providing feedback.