These 3 words are music to VCs ears – Repeatable Sales Machinery. This is a phase that an organization enters once they have some product-market-channel-model fit.
There is tons of literature on this. I am going to be sharing my perspective. Battling initial chaos requires different skills. Acknowledging clarity is a skill. Seeing patterns that can scale is a gift. Orchestrating the patterns via team, process and tools is the holy trinity. There is a reason why only a few organizations achieve repeatability in their sales models. Let’s decode.
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We are going to look at a step-by-step guide to building repeatable sales machinery. Part of the puzzle of building a repeatable sales machinery is also reaching a stage in company’s life, which is called as the product market fit.
Let’s expand this to a product market channel model fit. And in this thing, we want to look at how to sense a product market fit. Plus, how to mature it out into a repeatable sales machinery. And we’re going to look at more of those psychological aspects of reaching this state. As a founder, do you have the temperament to reach the product market fit? And this is a very important question. And let me expand on this. You build a product; you take it to the market; market gives you the feedback. Now, you have those essential skills in place where you can understand, not what is told to you by the customer, about the product but are you continuously able to get the lever deeper consistently and discover the need of the customers. When you reach a point where you’re not building vitamins, but you’re building painkillers, it will solve a lasting problem for the user.
Do you really have that temperament to persist through that process? To iterate through that process, to keep on going level deeper, to approach the same situation from multiple perspectives. And reach to the root. Again, this can be a trained skill, but there is also a fair amount of temperament that is involved.
The second part over here is why I’m asking this question is that it iterations require you to do in part, incremental changes. And also, bold moves/ drastic changes. This requires a fair amount of operational freedom as a founder to operate in the ecosystem in the company, along with the other founders and the board.
So do you think as a founder, you can do that with the other founders and the board? And that’s a very understated. People believe that just because you are the founder, you have all the freedom and you can run with whichever way you want to do so.
And the second thing is this requires a certain amount of time doing the incremental updates and also the drastic changes in direction. So do you have the patience for incremental updates and be the courage for the bold updates?
The third is the design of experiments. And this may come across as very simple with respect to as a quantitative discipline, where you’re able to design the experiments with respect to testing out certain hypothesis And then coming back. So when you’re doing some of those things, designing experiments establishing their success or failure criteria and then putting a check mark or a cross mark against a particular hypothesis, this all requires certain skills, which require you to look at the situation, not just from as this current situation, but how will it look from 12 months down the road situation. How will it look from a revenue situation? How scalable the market is? It requires you to go after and understand some of those nuances.
The last thing, persistence, many times you take time to understand the structure of the market. How to access the market? What are the most effective channels? Market is essentially made up of people, personalities and eccentricities, unlocking them, discovering their true motivations, building out your products, which will cater to your customer, their personalities, and their eccentricities, essentially takes a lot of time. Then it has to be married with the right channel. And it has to have the right revenue and business models with it. And this takes a fair amount of time, discretion, and you may end up getting on the road, which is a dead end. So booking your losses, putting a stop loss, and once again, restarting the journey requires a fair amount of awareness about your business and self-awareness.
So that’s where I raised this very critical question. As a founder, do you have the temperament to reach the market channel model fit? And it’s a question of temperament. I think people with mediocre skills can crack the puzzle provided they have the temperament with this. Skill is a secondary; temperament is the primary.
Is it a binary threshold crossover? Or is it some sort of continuum? Or is it some sort of loop which has to be exhausted a certain number of times? Now things are becoming friction free and they’re flowing easily.
So, the number one thing is that there are no discrete stages in product market fit. Now you’re unfit and now you’re fit, there is no discrete transition or a stage or a binary yes or no. It is a loop. You will find that your product is getting some amount of traction. It is getting sold. You’re getting certain margins, but you’re not there either the sales effort is extraordinarily high or the margins are very, very low or the ease of delivery is not there. And you need to work on different aspects of the value chain to establish that you have a product market fit.
It is not about the saying that – okay, this is a product that people want and I have this product and I know what it is and I can sell it, but it is about smoothening out the entire value chain, lubricating the whole value chain. A lot of times the product market fit is viewed from a very limited scope, where you’re only looking at the go to market or customer acquisition. But you need to take the complete value chain perspective, but it is not just that you can have a repeatable set of tactics that you can exhaust to acquire customers. But you have those one of mechanisms where you can boost the sales, you can keep on optimising/ fine tuning your engine so that it becomes better. It is not that the process end with the sale. The process begins with the sale. The product market fit should not be looked from a transactional perspective that this is only for the sale, but this is from the delivery value chain perspective.
If the nature of your business is such that you are you are delivering value over a period, then your product market fit needs to be established regarding the efficacy across the value chain and not just the entry point or the sale. You can you can take the value chain perspective over here and start putting those green-red-amber checks against each of that components in value chain. So that’s where the whole thing comes into play.
Of course, there are some quantitative aspects of product market fit, where you can administer certain surveys try to understand and there are some very popular, well-published questionnaires that will help you understand in a broader direction, where your product is, it is getting lapped up. And then there are quantitative aspects where you know, you have people coming on your website, certain percentage of people are converting OR certain percentage of people are expressing interest.
It requires extraordinary awareness of where your business is and where you needs to be. Being n the moment, listening to the customer, and also abstracting out the teachings regarding what this customer truly and really wants. And then being able to see the same things from hot-air balloon, which is 20,000 feet up and just look at the same transaction that is happening. And then you have to extrapolate and marry both these visions being in the moment and being detached from the moment and able to see the same act in progress.
Breaking down this into a rule, or saying that this is something that can be practiced. This is equally an art as much as a science, Second, luck does play a role. I will come to a part where the harder you work, the luckier you get. But there are iteration paths where certain experiments click sooner, faster, better. And luck plays a part over there.
One question that you should be constantly asking yourself –
What is it that is holding us back?
What is it that is stopping us from establishing a product market fit? Why we don’t have the product market fit yet? Another question, which many founders ask – how do I take my company forward in the next 24 hours?
Why conviction is necessary?
We spoke about, being able to sense an opportunity, see the opportunity, bringing in quantitative measures to be able to understand what the opportunity is all about. One of the critical things is – you need to have the courage to seize the opportunity. You need to have the conviction. And conviction is something that is very difficult to quantify. How much conviction do you have? How do you answer that question? You can’t answer that question. So, having the courage to act on the opportunity that is in front of you, a pivot that lies ahead of you – This can be change of clause in agreement, change of process, change of pricing. So that requires courage to letting go of things important.
And the fact of life is I’ve seen founders lose track, lose their sense of journey, lose patience. So having that conviction to act and consistently probe is something very, very important.
Understanding why things sell is very important. Number one question that we need to ask is, is it repeatable?
Is the revenue that you are proposing/ building is attributable?
Second, is the revenue scalable?
By repeatable, we mean that will the customer come back again, to you to consume more of the same product? Will the customer come back and consume a different product from your product line? Will upsell? will they upgrade? What is the repeatability part of it? More service more features, more usage? All of those things? Is it scalable? The offering that you have? Does it have a market large enough that you can tap into? Can reach the audience and translate into some meaningful revenue?
Third, is the cost of acquiring customer (CAC) is defined? If you’re acquiring customer at 60% of the unit economics – then are you acquiring a customers or are you buying customers?
Fourth, is the customer feedback channel established. Many times you’re seeing certain sales, picking up some phenomenon click. It can be temporary. It can have seasonality effects. You’re riding a larger or a different appeal. So are you really listening to your customer often enough in a very measured way? So that you have a right insight, that is the feedback channel very well established with the customer.
Fifth, is your sales is driven because of incentives, discounts, all you constantly need to signal out some sort of offer for people to come back and consume your product. Please note, this does not mean that you’re not doing price skimming or there is not that Amazon pricing effect that you’re bringing into place. But essentially, you need to be constantly giving discounts, coupons waters, some sort of SOPs for people to keep on coming back and consuming your product without them the product essentially does not self sustain. So, the price point that you have is artificially established that you can still have repeatability in your sales, but this indicates a very significant problem. And this may actually hamper the repeatability once the current cycle has been out once the customer or the dynamics of the market has shifted.
Sixth, the value prop of your offering is stable. Value prop of your offering is easy to understand. And the value prop is also valuable for the customer. And it is stable, it does not change, you’re not constantly fluctuating and changing your promises.
Seventh, the sales enablement is strong. Sales enablement typically is a blanket term used to address a phenomenon where your team essentially gets ready to sell your products. Sales team is very easy to train. Sales team is very easy to train/ mobilise, because sales team can have a very high level of attrition. So can you enable them faster. If your product is such that does not require in-house sales team or outbound tele calling team or anything of that sort, still the sales enablement comes into play because you will need whether the sales is totally product driven.
Eighth, I will just point out a very minor factor which is seasonality. If the product that you have essentially has a couple of peak cycles in the year, two times the year that this product is in massive demand. And then there are those little cycles. Typically, if you’re in the education sector, you will have admission cycle. Admission cycles can be two or three in the year. So what do you do for the rest of the year? So a lot of these educational institutes for profit will have slightly diversified set of products, which will drive revenue throughout the year. They will cater to adjacent markets, they will cater to different customer base.
Sales is a process. So it is not something that happens because of heroics doesn’t happen because of a one-off thing. It has to be broken down into a process. There has to be a system of sales. Whether it is an online touchless method of selling. Whether it is an assisted way of selling, telesales driving people home, home visits, whatever it is trial based. There has to be your system of sales. Sales process is never set. Sales process is always in a state of active repair. That essentially means that your sales will continue to grow; sales process is constantly improving or is constantly deteriorating; it is never static. It is either improving process or declining process. So, that is a critical thing.
What are some key pillars of the sales repeatable sales process?
First thing that you have when you are trying to iterate and build for a product market fit or repeatability is to have a website which is very much easier said than done. Now, the website needs to be in a stack which is very easy to iterate it should be able to add pages, content, change border radius of your button easily. And it has to have quick turnaround times because that gives you the ability to iterate. Now, this is extremely true with landing pages. And hence a lot of landing page software’s are in fashion. These landing page software’s essentially help you act sooner, faster, better, and achieve the same agility. But I believe the website stack itself needs to be very fluid, very easy to work on. And this has tremendous business benefits. Your website is not your online digital brochure. Your website is a living entity, which is deeply integrated with your systems at the back end. It reflects you as an organisation online. Whether it is your CRM, whether it is your communications framework, or funnel, understanding where your customer is regarding their journey in the purchase process of your product. Your website is the starting point is the version of truth that you create for yourself as a business.
Second, is a CRM. And on the CRM front, we have a dedicated blog about how to select the CRM, what makes for a good CRM and what is stage appropriate CRM. CRM which can onboard your tele calling sales flow, a CRM, which can onboard the various stages of customer acquisition, especially if it requires inducing a trial. A CRM that is agile, models and fits easily with the real-world process. Real world sales process you are implementing or want to live in a CRM which brings in the discipline.
A sub part of a CRM, or a full fledged system can be the marketing automation. That is number three. And let me call it out separately. If you’re using a CRM integrated with marketing automation, awesome. There are some significant benefits of doing that. Because your lead scoring, engagement scoring and lead quality will be established in the CRM and basis of that you can trigger drive certain marketing automations. The reason being – you have to understand how you acquire the customer. You don’t convert the customer the first time you speak to your customer. Once they prospect you or you prospect them the first time the customer goes through multiple lost cycles. The customer has a digital journey where they are on your brand; they are on a competitor’s brand. It’s a competing journey in their mind, it’s a race that you have to win in their mind. And for that you need to be there in the customers consideration set, always a marketing automation essentially allows you to do that. A marketing automation essentially allows you to do that.
Lastly, and the number four thing is essentially what I call as the event framework or funnels. How do people come to your website, your mobile app, your product? From there, to where they get converted, there are different journeys that they have. And this can easily be mapped by some of the formal tools that you use. Like CleverTap, like SmartTech, a very elaborate event tracking mechanism needs to be implemented. Post which how these events translate into actionable insights for you, essentially needs to be built. And that essentially smoothens out your process of making things happen for you over a period. So that’s how this whole thing essentially works.
We’re going to have a whole dedicated blog regarding the people part of it, we looked at identifying the repeatable sales model, we looked at the tools that are typically required in some of these things. Now we will look into people for for that you will need to wait out and see and read a completely dedicated article.
One of the most important things is measuring the maturity of Sales is the true North metric for looking at your sales process outside it easily is your sales cycle. If you’re able to first quantify your sales cycle, and then work on it as an active metric and reduce the sales cycle, then you’re constantly working towards maturing your sales process. Keep our eyes open to the possibility and work on it very, actively always.
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