Let’s look at some of the different forms of sales. Not everything will apply to you but it’s worth exploring because there are strategic concepts here that might influence how you sell your solutions.
Direct Sales
Direct to consumer. Not to be confused with “direct marketing”. Direct selling takes place when salespeople reach out directly to prospects, whereas direct marketing involves a company marketing directly to the prospect without going through an agent/consultant/retail outlet.
E.g. Peddling/1-on-1 Demo/Website
The benefit of direct selling is you control the process and branding. You have a full say on what your SDRs can or can’t do and how they should or shouldn’t position your offerings. They can be categorized as:
Single level: Buy from A, sell to B.
Multi-level (a.k.a. MLM or network marketing): Buy from A, sell to B, and earn commission from the sales of recruited salespeople below them.
MLM is still considered “Direct” as they are working directly for you, not a separate 3rd-party selling on your behalf.
There’s a lot of negativity associated with MLM. The structure itself isn’t good or bad, poor implementation is the problem. I’ve seen organizations do MLM well with the proper structure and training. MLM is also an internal term, feel free to call it something else if there’s too much negative baggage associated with it.
Channel Sales
When you have a 3rd-party selling on your behalf.
E.g. Franchising/reseller/dealer
| Pros | Cons |
|---|---|
| • Lower overhead, let them do the selling for you. • They already have a network of prospects (that you might not have easy access to) + distribution figured out. ◦ Allows for massive expansion and increased exposure. | • You have less control over your prospect’s buying experience. • The reseller has their own best interest in mind, not yours. ◦ Their bottom line is profit. • Slow to start as they have different priorities and need to be convinced of the ROI: not only monetary (if they have to purchase inventory) but also time + effort needed to train and familiarize their SDRs with your offerings. |
A good and strategic channel partner should ideally sell similar solutions to similar buyers and align with your values and your brand identity.
If channel selling is your intended distribution model, I still highly encourage starting with direct selling. Why? Direct selling will help you:
- Understand your sales model, who to target (the right decision-makers to approach), and how to best articulate your offerings. Don’t expect a channel partner to hit the ground running, you should be equipped to train them on the above.
- Gauge product-market fit. Amazing partnerships won’t save you if your solution isn’t what prospects are looking for. If you’ve already proved product-market fit before approaching channel partners, it makes the ROI conversation a lot more convincing as they can readily see how your solution will increase their profits too. It’s less risky for them to sell an offering with strong demand vs. one that is unproven in the market.
Remember, their priority is selling, not creating demand. You still have to do marketing and drive traffic to them.
Once you’ve decided to pursue channel partnerships, ensure you commit to it. Don’t compete with your partners. It can be tempting to also sell your own solution, but channel partners don’t like it when you’re competing with them and become less committed to promoting your solution(s) or might even discontinue their partnership. Doing so gives short-term revenue but works against building the leverage of the channel. Instead, invest in supporting your partners by providing them with training, tools, news, updates, and resources that will help them better sell your solutions.
B2C
If your solution is low-priced, low-margin, or consumer-centric, your activities should be weighted more toward marketing rather than sales. Why? Because, as I’ve mentioned, sales is resource intensive.
That said, even if you have the above, you can still benefit from selling. Affiliate/referral partnerships, wholesaling to retail or distributors, and MLM (recruiting commissioned salespeople) are sales activities you can explore even if you’re B2C. It’s harder to control results that come from marketing, whilst you can directly control the volume of your sales activities and will usually see immediate results from it. Like Channel Sales, do Direct Sales to start before leveraging 3rd-party resellers.
B2B
Consider H2H (Human to Human). Remember, even if companies are paying, people are the ones doing the buying. There are 2 main ways to approach it, neither is “wrong” or “right”:
- Some B2B solutions are sold at a high price.
- While others directly target individual users within an organization and are priced lower to facilitate quicker conversion and higher volume of purchase.
For the former, there is an added layer of complexity because organizations have more complicated purchasing processes. Approval generally requires more stakeholders and it takes longer to build relationships with all of them. Unsurprisingly, there’s also a smaller pool of leads if you’re going after organizations instead of individuals. Implementation and adoption are more complicated as you’re trying to create bigger change or have multiple people learn something new and adjust their existing workflows.
Some quick B2B tips:
Get acknowledgment of where they are (timing) and the problem(s) they are facing.
Some prospects aren’t aware that they have a problem or are missing out on opportunities. Educate them on the industry, what their competitors are doing, and what milestones should look like relative to similar businesses at a similar stage of growth. Show them that they’re falling behind (if that’s the case). Highlight how you can help bring them to the next level.
Don’t underestimate the power of relationships.
Know your target stakeholders and their personal motivations (e.g. getting a promotion, recognition for a new initiative, saving time, etc.); appeal to these motivations.
ASSIGNMENT
- What should “good” milestones look like for your prospects? Identifying these will give you a benchmark to assess if your prospect is “below average”.
- What questions can you ask to evaluate their timing and where they’re currently at?
Here are 2 key concepts that greatly impact B2B sales. They apply in B2C too but carry more weight for high-ticket (expensive) solutions which are more common in B2B. These concepts were taught to me by one of my mentors: Mike Winterfield, founder of Active Impact Investments, former COO of Traction on Demand (acquired by Salesforce), and former President of Randstad Canada. They’ll not only affect how you sell but more importantly, what you sell.
The Decision Threshold
is an arbitrary and subjective mental threshold, which if exceeded, will trigger the decision and motivation to make a change. Everyone’s threshold is different and influenced by their personal values, interests, and objectives which are also all weighted differently. It sounds complicated but it’s quite binary.
To put it simply, people change when:
This diagram should illustrate it better. Like a teeter-totter, if the cost of staying the same (left) outweighs the cost of changing (right), people are willing to make the switch. This isn’t a purely logical exercise; emotional perception also carries weight in this equation. Here are some factors that influence the
Cost of staying the same:
- Risk of competitors stealing their customers.
- Fines/penalties for non-compliance (which your solution helps them with).
- Frustration, challenges, and difficulty with their current method for solving the problem.
- Time wasted.
- The financial cost of doing it the old/manual/slow way.
- Lost opportunity.
Cost of changing:
- Price.
- Tedious approval process/chain.
- Learning curve while training employees to use the new solution.
- Resistance to adoption.
- Risk aversion.
- Fear of the unknown (or unfamiliar).
- Complications integrating with existing workflow, process, and tools.
Hence, to sell someone and get them to change, you can either
1. Emphasize and elaborate on the cost of staying the same.
- Uncover needs, highlight how pressing their problem is, their inconveniences, the cost of inaction, or missed opportunities. Show them how your solution will alleviate it.
- Alternatively, paint a picture that helps them envision how much better their situation could be (their ROI for switching).
Or,
2. Make it as easy as possible for them to change.
It’s often easier to focus on highlighting ROI (missed opportunities) or pain because it can be accomplished through adjustments in sales or marketing messaging. Although this is important, selling into a business can be expedited by minimizing the pain of changing instead of focusing solely on the pain of staying the same. Think about it: The lower the cost of change, the lower the required pain threshold to tip the scales. Minimizing the pain of changing, however, can be tricky if you are unable to influence executives or managers who ultimately define your offerings.
Now that we understand the Decision Threshold, we can discuss the closely related concept below which targets #2: Make it as easy as possible for them to change.
The Thin-Edge-Of-The-Wedge
Like a door wedge. What “small thing” can you offer to get your foot in the door? Explore how you can start a working relationship with your client in the quickest and simplest way possible without involving too many decision-makers. When the cost of changing (or it is low risk to try or sample) is low, they’ll require less persuasion to take the leap.
Below are some ideas and examples.
Ideas:
- Selling a smaller report/audit/assessment instead of a large implementation project.
- Offering a free trial.
- Lowering the risk of adoption with guarantees.
- Offering a more basic version of your solution.
- Doing a pilot program with a smaller department, region, or for a limited time, instead of rolling it out company-wide. Pilots reduce the risk by reducing the scope and scale of implementation. Give them a chance to see how this will play out in their organization first.
Real-world examples:
- Traction on Demand (acquired by Salesforce) sells Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) implementation services (primarily Salesforce). As you can imagine, CRM/ERP implementation is one of the most complex services to sell because migration requires tight integration with all other existing systems, organization-wide changes in behavior, comprehensive training to facilitate adoption, and is usually relatively expensive. Instead of opening a sales interaction by offering their implementation services, Traction offers their prospects a low-cost operations assessment report. This report would evaluate their existing processes, highlight recommendations and areas for improvement, and potential solutions or tools (including Salesforce) that aid with it. This report alone was valuable, even if they decided not to work with Traction for implementation. It contained practical insights that companies could use, was much cheaper than committing to an expensive, comprehensive implementation project, and could be more easily approved by an individual decision-maker. Over 80% of companies that got an assessment report would close into a more formal implementation project.
- RunGo, a turn-by-turn running app that provides directions for your route, recently pivoted its focus to hotels. They now offer it as a tool for hotel guests to explore the cities they are visiting. When Craig (the founder) was pitching to hotels, he discovered the ideal price was $5,000 and nothing more. Why? Exceeding this amount would require approval from the head office. This slowed down the sales process. At $5,000 or below, local branches could approve implementation without needing to escalate to higher management. Understand your customer’s buying process by collaborating with the advocate you’re speaking with so you can expedite the sale.
- Mailchimp, the popular email marketing platform offers a free tier if you have <1,500 contacts. Usage-based Pricing is tiered based on # of subscribers if you exceed it.
- Tempur-Pedic, one of the most highly recommended mattress brands in America, actually started with pillows. While this is an oversimplification of their origin story, these pillows were essentially miniaturized mattresses for your head!
- HubSpot offers their CRM for free and upsells HubSpot Marketing & Sales (which is also priced in tiers based on # of contacts in your CRM).
- Calendly offers freemium accounts where you can create 1 calendar type. Other premium features for team calendars are unlocked through upgrades.
ASSIGNMENT
Take a moment to evaluate your current offerings. How can you better highlight the cost of staying the same vs. reduce the cost of changing (think Thin-Edge-Of-The-Wedge) to make it easier for your prospects to convert?