According to recent reports, top tech companies like Apple, Google, and Microsoft spend anywhere between 6-22 percent of their revenue on sales and marketing.
“One of the biggest mistakes entrepreneurs make is they focus very little on sales and marketing,” Watson says. “Fifty percent of your funding should be going into product development and dev ops. Fifty percent should be going into sales and marketing.”
Watson specializes in helping businesses and startups build and scale sales processes and profits. He says establishing an effective sales and marketing strategy is key to sales acceleration and securing a second round of funding when the time comes.
“One of the biggest mistakes startups make is they have a great idea. They sell someone on the idea. They get money for it and then they can’t cash the check,” Watson says. “Eight months down the line, they don’t know how they’re going to hit their sales goals.
“That’s where a lot of companies stall or fail. They get their first round based on a unique idea. The CEO is charismatic and they have a patent on some great technology. That works for a while. But when that runs out, you need a sales foundation that gives you predictable and repeatable processes. That’s critical. That’s what investors want.”
Here are Watson’s top three tips for sales acceleration in 2022.One of the biggest mistakes entrepreneurs make is they focus very little on sales and marketing. Click To Tweet
Refine your value prop
While it might seem like a no-brainer, Watson says establishing a unique value proposition is critical to success. No matter what stage of the game you’re at, having a refined value prop can be the defining factor in closing your next deal or securing an investment.
“It should be unique and it needs to be something that improves the lives of others,” Watson says. “It’s not just about making money.”
Watson says your value proposition should also include your “why story”–what motivated you to do what you’re doing and how you got here. Once you have a refined value proposition, it should then be customized for different audiences including social situations, elevator pitches and investor meetings.
“The first thing you really have to do is establish your company’s value propositions and come up with different levels of pitches that are appropriate for different situations,” Watson says. “Sometimes you’ll get a minute and sometimes you’ll get ten seconds. So it’s important to have all of those things in place.”The first thing you really have to do is establish your company’s value propositions and come up with different levels of pitches that are appropriate for different situations. Click To Tweet
The value of CRM
Watson says having an effective client relationship management system is key to achieving your sales objectives.
“It’s critical to have a CRM in place that is simple to use and allows you to measure results and establish the KPIs and metrics needed for each sales person,” Watson says.
CRM analytics can help companies identify important metrics like the ratio of calls to meetings, ratio of meetings to deals, average deal size, and the time it takes to close. Having this information allows companies to establish quotas and determine how many sales people to hire to achieve sales objectives.
“What are your sales objectives?” Watson says. “Start with the end in mind and then reverse engineer back based on those metrics to uncover what is a reasonable quota and how many people you are going to need in place to hit your target.”Oftentimes startups don’t have the sales processes in place and founders can’t execute the plan because they’re not sales people. Click To Tweet
Establishing a foundation
Sales acceleration starts with establishing the right sales foundation.
“You need a foundation,” Watson says. “You have to come up with a sales playbook, hire the right people, and onboard those people, which is a process. That’s the biggest challenge a lot of these founders face.”
Despite the importance of establishing a sales foundation, Watson says founders aren’t always equipped to manage this task because they lack the sales background necessary for managing sales processes. Instead of taking on sales management themselves, Watson says founders should spend their resources hiring the right people to drive the sales process.
“Oftentimes startups don’t have the sales processes in place and founders can’t execute the plan because they’re not sales people,” Watson says. “They’re going to run into a brick wall inevitably and a lot of them won’t get their next round of funding, which is why you have 90 percent of businesses failing.”
Want to learn more? Tune in to Fire-Up Connect’s new radio show on Jan. 15, 2022 where Watson will discuss the fundamentals of scaling sales processes. Additionally, on Jan. 13, 2022, Watson will be hosting a joint webinar with LTS Accelerator called “All About Startups.”