Today’s ever-growing startup ecosystem is, for better or worse, also riddled with fierce competition. Every entrepreneur knows that the ultimate aim of starting a business is to make profits. Thus, from brainstorming great ideas to implementing unique strategies, businesses are competing to outperform each other in terms of making sales.
If you have just joined the startup bandwagon with a killer idea and a compelling marketing plan, you should know that your budget is the limited resource at this point in time. As a matter of fact, while marketing is all about increasing your brand’s visibility, a well-defined sales strategy gives you quantifiable profits. Which means, to a certain extent, sales and marketing strategies are chalk and cheese. Sales outreach, in general, is narrow and deep, whereas marketing is broad and shallow. In view of this fact, successful startups almost always start narrow and deep.
No matter how good your products or services are, if you can’t convince people to make a purchase, you will have to shut your shop. Being a startup founder, one thing you should be proficient at is selling. Turns out, at every stage of your entrepreneurial journey, you have to constantly sell one thing or another. For instance, selling your idea to investors; selling your company culture to potential hires; selling your products or services to prospects; and selling your vision to your employees.
An effective sales strategy addresses three key aspects:
- How to acquire new customers
- How to strengthen the relationship with existing customers
- How to sell more
That said, here are five reasons why your startup should focus on sales:
1. Sales maintain the cashflow of your business
As we mentioned earlier, a budget is one of the biggest hurdles on the journey of a startup. You might also be managing all your processes on a tight ship. At any point in time, you may be forced to purchase items that are essential to keep your business alive. Making sales at this stage can help you offset all these impacts of limited starting budget. With early sales, you can easily maintain the necessary cashflow of your business.
To run your business successfully, you have to allocate expenses for research, product development & improvement, web servers, computers, furniture, etc. Thus a steady cashflow from sales will address all these essentials without throwing you into debt. Early sales mean achieving early stability. As a result, employees will be happier, and you will be less financially stressed.
2. Sales is an interface between your business and customers
Your sales department or sales representatives interact directly to the customers, so they act as a bridge or interface. Through excellent customer service and other means, your sales reps can push your customers to the point of liking you and trusting you, and ultimately to buy from you. This camaraderie can also help you upsell more expensive items to your customers. Not only that, ones you win your customers early on, you can cross-sell them by offering additional products or services that go along with the previous ones.
The point is once you get your known customers to buy more frequently, you put your business on the growth trajectory even before you might have thought. The truth is it is much easier to sell to a satisfied customer than it is to advertise, promote, and sell to a new customer.
3. Sales determine how successfully you can scale your business
Being able to make your customers willingly to pay for your products or services demonstrates that your company is climbing the charts of being valuable. For any business, profit and growth complement each other. So if both of them come in the initial days of your entrepreneurial journey, then you can successfully scale your business at the right time.
By providing you with the sufficient revenue stream from the start, the sole purpose of your sales team is to put your company on the growth curve. Whether you want to scale in terms of technology, the number of users, or the amount of profits coming in, sales gives you the required leverage to do so. In other words, sales have the power to take your product or service from the SMB segment to the enterprise segment.
4. A good sales strategy helps address the needs of customers
At every stage of your business’s journey, an effective sales strategy allows you to address the genuine needs of your valuable customers. It goes a long way to step up your customer acquisition efforts. There are different approaches to assist new and existing customers. New customers normally need to be educated about product features and functionality, while existing customers are happy to be assisted with technical support.
A well-defined sales strategy helps you build a loyal customer base by addressing their pain points. You can also do this by having a proper system or tools in place that can give you a good insight. For example, reward point extension allows you to reward your customers for registrations, product reviews, purchases, referring a friend who makes his/her first purchase or get them a gift from the store. Thus, your happy customers will further become your brand advocates and spread a word of mouth.
5. Sales bring more investors
Of every metric in the book, a tangible growth in sales is hardest for anyone to ignore. So if your business is making proper sales, you can anytime say “there is definitely something for you here” to your potential investors. Other key aspects of sales such as website visitors, customer retention, and user engagement will also make your startup more attractive to investors. A good growth in sales figures will help you negotiate from the position of strength. Thus, you will cut a winning deal by dictating the terms, which will benefit your business in the long run.
When you start treading the path of building a business, you create value, which is only realized by initial profits. This happens when your revenue is more than your costs, else it becomes a real uphill task to break the metaphorical barriers. That is why you have to focus on early sales as a startup.