Applying Lean Startup Principles to Your Sales Model

Book cover - Lean StartupCertain startups can only guess what type of sales model they will end up with once their ready-for-primetime product is released.  We are now conditioned to use the Lean Startup (order book here) concept of a minimum viable product (MVP) when it comes to our offering.  But why not extend this to the sales model as well?  Lean Startup principles extend to all aspect of your business model but few use it beyond the product.  The last thing you want to do in the early days of your company is overshoot your sales model with expensive hiring, tools and travel.  Of course, companies with mobile apps or other offerings that clearly leverage an e-commerce model don’t need to worry about this unless they later identify extensions of their offering that carry a more traditional sales requirement.

I’ll use a crawl-walk-run analogy to demonstrate a Lean approach to refining your sales model.  All steps along the way assume you are doing as much as efficiently possible to drive interested prospects to your website and making sure your site is properly enabling sales.  Let’s explore further.

Crawl (Very Light Touch) – The very light touch phase of selling involves the use of Website Chat tools.  Enable a chat feature for your website using LiveChat, Olark, WebsiteAlive or something similar.  If visitors are on your site for more than __ seconds, they are presented with a chat window as an opportunity to engage with the company.  You can having someone from the company login when available to multitask a bit and only then is the chat function enabled.  The questions and objections you get from chat participants will reflect the real world and this can help you with product feature priorities, pricing optimization, website design (to answer the common questions) and marketing items (messaging, positioning).  If the web chat feature seems to be sufficient to convert most of your interested prospects into a sale and the volume of activity increases to the point where the founders can’t handle it, then hire a low-cost sales-type employee to manage this for you.

Walk (Light Touch) – If web chat isn’t sufficient to address your sales needs for enough of the interested prospects, you’ll know.  The chat sessions will go longer than 3-5 minutes and truly interested prospects will ask to actually speak with someone.  At this stage you should add an inside sales rep.  The good news is they can also help staff the web chat function when they aren’t talking to a prospect on the phone.  These inside sales reps will proactively reach out to prospects that downloaded your trial and are only a few days away from expiration and they will also be the ones to respond to inbound leads and contact requests.  But they do everything over the phone.

Run (Full Touch) – At this phase you’ve got someone that drives or jumps on airplanes to visit interested prospects.  Hopefully your offering doesn’t require this level of sales effort and cost for all prospects.  If you’re lucky, your field sales reps will only focus on the most strategic accounts that are capable of paying the big bucks.  It’s also common to put an inside sales rep and a field sales rep on a team to split the workload and better optimize your costs.

At the end of it all you might find that you have a combination of all three sales approaches.  But using the Lean Startup principles, you can learn a lot from crawling and walking first and without overspending.  And please don’t hire a VP of Sales before at least learning a few things about what your ultimate sales model might need to look like.  In fact, if you want some help deciding what type of sales-related role to hire first, read my article titled “Hiring Your First Sales Professional“.

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Wait, there’s much more!!!

The information in this article is just a very small piece of what I cover in my Founders Academy Video Library, which includes more than 35 topic-specific modules and 6 themed compilations.

I’m talking about more than 14 hours of educational and advisory content to help you grow a great company.  Click Here to Learn More

“The way you convey the material is great and the examples you give makes things clear.” (startup founder)

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Author: Gordon Daugherty

Over the past 15 years Gordon has seen nearly 1,000 startup pitches, advised more than 200 entrepreneurs and been involved with raising over $45M in growth and venture capital. Throughout his 28 year career in high tech, serving twice as President and three times as CMO, Gordon has both an IPO and a $200M acquisition exit under his belt. Now his emphasis is purely focused on helping startups and early stage tech companies. Through his Shockwave Innovations advisory practice and as Managing Director for Austin’s Capital Factory startup accelerator, Gordon is an active angel investor, VC and startup advisor.

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