How startups attract their first customers

Current start-up dates

Why do some start-ups fail, while others later become global corporations like Apple, Facebook and Co.? One important reason for this is quickly stated: at some point the first-mentioned start-ups, no matter how innovative they were and how good their ideas were, ran out of money. The reasons for this? For what feels like 95 percent of start-ups, sales are the problem. You run out of financial resources and actually interesting business ideas disappear again because the sticking point of sales at these start-ups was given too little consideration or not considered at all in the planning. Reason enough to deal with the question of how to get to the customer. Here are the 15 ultimate sales truths for startups and young businesses.

1. Nobody has been waiting for you

Unfortunately, this is the most unpleasant truth or one of the biggest misjudgments when starting a business. Many startups mistakenly believe that the world was just waiting for their product or service. But it's exactly the other way around: Nobody was waiting for you. And there are a thousand reasons for this: We have never done it this way; it has always been like this; the old supplier is giving us something for Christmas; The current sender always has cookies in the package; then we have to re-enter all the data, etc. "

Prepare for the customer club, for the NO. And you will certainly hear this more often than you would like. And then it's not the fault of the customers who don't understand your product or service. You yourself are to blame for one simple reason: You did not convey the advantages to the customer in such a way that he can accept them and also understood them as advantages for himself.

2. Sales is a matter for the boss

This initially applies to all start-ups and young companies. Later, a manager takes over sales. But for the first year or two, sales have to be a matter for the boss. And the boss has to deal with it every day. Every day on which a start-up does nothing in terms of sales is a wasted day and a step towards the end of the company and not towards a successful prosperity. When talking to potential customers in particular, you will find out how the market is doing and what makes the customers tick. Perhaps the benefits you see in your product or service are not or not so important to the customer, and they have completely different problems. For CEOs of start-ups, that means only one thing: get out to the front!

3. Do not develop in a quiet room

The following case: A customer calls and asks me to market his new product. We make an appointment and my customer demands absolute silence. “I have developed a new product. This is going to be awesome. Nobody knows it yet, you are the first to show it to. Build up a sales organization for me. But we have to hurry, there isn't one on the market yet. ”Okay, admittedly, the product was interesting. A Google search did not find any hits at first. Accordingly, the target group was worked out first. Who needs the product? This point was done quickly. But lo and behold: Upon closer inspection of the target group, it quickly emerged that the product already existed. And even worse: There were actually already nine providers with a comparable solution. Bitter news for my customer. Six months of development time and a few thousand euros were thrown out the window.

Therefore, an iron rule should apply: Switch the sales department into development. Do not develop in a quiet little room, but, in addition to developing the product or service, go straight to the planning stage and ask the important questions: Who is my target group? Does this target group need the proposed solution? And just as important: talk to the target group.

4. Everyone starts sales and marketing too late

All start-ups start selling too late - and this is one of the reasons why many start-ups go bankrupt, not because of incorrect financial planning. Or, what is no less dramatic, they start with the wrong distribution. This in turn means: Do not start developing the product or service without including marketing. Already at the planning stage, it is important to consider again: What do the customers want? And how do you later bring the product or service to men and women? Remember: the larger the customer's company, the longer it takes to make decisions. I don't want to talk about authorities and public clients at all. Here you can count on the same amount of time as with large companies when it comes to decision-making processes.

But why is that so? The world can be divided into success seekers (entrepreneurs) and failure avoiders (employees in large corporations and authorities). And in dealing with the failure avoiders there is a great danger: Before they make a decision, they will run out of money. My assessment from many consultations with start-ups is therefore clear: It takes two to five times longer until the cash access is actually credited to the bank account than the cash inflow was previously factored in in the business plan.

In plain language this means: Thinking about marketing can never be too early, but it can often be too late.

5. Distribution costs money

An old saying goes: Death is free. And even that still costs your life. In plain English, this means that you should allow for a reasonable budget for sales when creating the business plan. Please immediately forget the idea that the sales force works on commission. That does not work. No good sales representative works on commission for a start-up with a new product or service. After all, it is he who has to sell a product that hardly anyone knows about and that customers often do not know whether they really need it at all. This is why it sometimes takes three to six months from making an appointment, via appointment, offer, order, delivery or execution to invoicing. And what should the good man or woman in the field then live on?

Ultimately, this means: The commission-dependent sales force will do something else relatively quickly - so that money comes into the till, and your product will consequently disappear into oblivion.

6. No success without a unique selling proposition

The USP (Using Selling Proposition) is the unique selling point of a product or service. One sentence has to suffice for the start-up to express the USP. That means: What is the unique selling point of my product, my service or my company? Every employee that I wake up at 4 a.m. after a night of partying must be able to recite this sentence to me like a shot from a pistol. And by no means a novel that lasts over half an hour and where the inclined listener begins to fall asleep. Buzzwords like customer-oriented, friendly or service have no place there - this goes without saying.

The rule is: No USP - no success. Otherwise you are like everyone else in the market. And then nobody needs you, because without the unique selling proposition there was already enough before you and there will be after you too.

7. Specialist idiot kills customers

Don't knock all the details out of the customer's ears. When I buy a car, I don't want to know how the engine works either. Very important here: Don't let developers loose on customers. They explain the last line of the program or the smallest screw to the customer. Nobody needs that, especially not the potential customer whom you want to cast a spell and inspire for your product or service. The right sales person works the other way around. He asks the customer: What do you need, what is your problem, what do you expect from me?

The customer needs to understand you and doesn't want to be crammed with details. Otherwise, this not only reduces the desire to listen, but also the desire to buy!

8. Customers don't buy products, they buy solutions

This is old sales wisdom - but it still applies today. When customers buy, they are not buying product features, but benefits. They don't want to buy a drill, they want to hang up a picture, they don't want to buy vitamin tablets, they want to be fit and healthy, they don't want to take out insurance, they want to be protected in an emergency.

Solve the customer's problems and they will never leave you. This is the real secret of success for all companies.

9. You're targeting the wrong audience

I recently asked a start-up entrepreneur: who is your target group? The answer: everyone. Great, I replied, then stand on Ku'damm in Berlin and sell your product there. The decisive factor, however, is: who is the ideal target group for what I want to offer, and where exactly can I find it? In my experience, hardly any start-up thinks in depth about this (see also the point “Nobody has been waiting for you”).

Here, too, it must be made clear: the better I know my target group, the better I can advertise them. And that includes simply asking the question: Who is currently the “owner” of my target group? Maybe I can cooperate with this company. Incidentally, this can be a very interesting, inexpensive and at the same time effective sales channel, provided it is set up correctly.

10. Many sales channels lead to the goal

Have you already thought about all the ways? And then also tested them? It is important not only to think about SEO and SEM. Because there are tons of other sales channels: Affiliate, white label, wholesale, retail, platform sales, collaborations, behavior-based newsletters, etc.

It is essential for start-ups to deal intensively with these important areas of sales, and - as already mentioned - ideally before the actual development of the product or service begins.

11. 90% of the sales force are pickles

Unfortunately, even if this sounds harsh, it is. That is why it is particularly important for start-ups to be careful during the job interview. Because one thing is certain: good sales representatives ask and listen. Bad field workers, on the other hand, talk about their insane successes at previous companies. Here the question can simply be thrown in, why do they want to leave there when they are supposedly so successful there. But it is not just the job interview that is important. The sales representative should not be left to his own devices afterwards.

When you've found a sales representative, check them out. How? Once a week via ZDF = numbers - data - facts. And question everything - don't believe everything. Also by calling someone who is interested and asking how the conversation with the sales representative was. Because as I said: 90 percent are cucumbers, but the remaining 10 percent are worth gold!

12. Don't die in beauty

Unfortunately, a typical problem for many start-ups and especially for developers: The product or the page is never finished. There is always something to be done and a “corner to be repaired”. However, this 150 percent perfectionism is bad for business and brings with it almost the death sentence for a start-up. Perfectionism in and of itself is not a bad thought, of course, but in the meantime you will run out of money along the way. And mostly it is small things that are still being changed that the customer may not even be interested in or only slightly. And that are not necessary to solve the problem that the customer is actually talking about with the product.

Determining the right time naturally also requires a dose of courage: you have to decide that the product is now ready and ready to go on the market. Then it is time to turn on the turbo and ramp up sales.

13. Set and review goals

The ZDF formula already mentioned naturally also applies to the company itself. Or, as the saying goes, the Key Performance Indicators (KPIs), which can be used to measure the progress of important objectives. Set goals that are achievable. It is also important to set realistic intermediate goals. Check them continuously. I realize that setting sales goals is extremely difficult, especially for a start-up. But that is exactly what decides the battle in the end. And if you stray from the goal, react immediately. Rethink your sales strategy, test new ways, increase activities in the respective area.

But no matter what goals and intermediate goals are set, the important thing is: goals must be achievable, otherwise the start-up will quickly lose its breath and the whole store will run out of breath before the company has really started.

14. Develop the right pricing model

Finding the right price - that's an art. But finding the right pricing model is not easy either. Have you ever thought about giving away your service? It does not work? And what do companies like Facebook (advertising), Xing (premium offers) and their colleagues live on? A subscription model can also be considered. It does not work? And what are blacksocks.com (socks) and dailybread.eu (underwear) and other companies doing? For example, I can buy or rent software today.

So there are many ways to find the right pricing model for my product or service.

15. Don't give up

Distribution is not easy. A NO is part of the sale. And let's be honest: If all customers said YES, it wouldn't be fun anymore. Seriously: You have to have some masochistic traits in sales. You will also get a "bloody nose", for sure, if you go into cold calling.

The rule is: You don't have to give up, otherwise you can shut down the shop right from the start. Or to put it even more clearly: Then you don't even need to start!

The author Klaus Wächter has founded several start-ups, is active as a business angel and is a partner of the Wirges think group, which advises and accompanies companies from the start.