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Beginner's guide to the sales process for startups

New to sales? Many startup founders are. Here we unpack the basics of the sales process and explain how CRMs can help you close more deals.

By Brad Bowery, Business Development, Strategic Partnerships - Zendesk for Startups

Last updated February 3, 2022

When you start your first company, one of the most critical but often overlooked roles you take on is that of a chief salesperson. For many founders, this is uncharted territory.

Pitching an investor is not the same as convincing a customer. If you want to hire your first sales rep and close more deals, you need to understand how the sales process works, what tools your team needs to be successful, and of course, learn to speak the language of sales.

Fortunately, sales is a skill that can be learned. Let’s start with the basics:

Sales definitions you should know

Before you can develop a CRM strategy for your startup, you need to know the lingo.

Sales terminology might feel unfamiliar or even a bit rigid at first, but the beautiful thing about using customer relationship management (CRM) software for sales is that it provides common structure for a sales process. With a few exceptions, most CRMs follow the same basic rules using similar vernacular. These basic rules can also apply to the way a recruiting or fundraising process might work.

Here is a glossary of key terms you should know:

Key terms and definitions

Sales CRM — Software used to streamline pipeline management and safely store customer information, communicate with prospects, and drive more sales.

CRM objects — Represent the sales relationship you have with a specific person or company. There are four primary CRM objects: leads, accounts, contacts, and deals.

  • Leads — Sales prospects generated through marketing, research, or outreach that have not yet been vetted through the lead qualification process.

  • Accounts — A group containing multiple contacts or potential deals. In B2B sales, it typically represents a company. In B2C sales, it may be a household.

  • Contacts — People within a group who you communicate with, which includes information such as their phone number and email address.

  • Deals — Potential sales opportunities. You may have multiple deals and contacts under the same account, or you may have a single contact and deal.

Lead qualification process — The vetting process to determine whether a lead is likely to be converted and become a customer.

  • Qualified lead — A prospect who is likely to be a potential customer.

  • Unqualified lead — A prospect who is not likely to be a potential customer.

The importance of qualifying your leads

Understandably, you might be eager to reach out to any and every lead that comes to you, but determining which leads are your ideal prospect (qualified) and those who aren’t (unqualified) is an important step in the sales process.

The lead qualification process serves two important purposes:

  • Evaluating marketing efforts: You can determine whether your marketing efforts are attracting ideal prospects, so you can start spending your advertising dollars more wisely.
  • Setting sales team priorities: Properly tracking leads allows you to divide and conquer; some can work on qualifying leads while others focus on converting leads after they are qualified.

Qualifying leads before you try to sell to them is critical. If you don’t qualify leads first, you could be reaching out to contacts who are unlikely to buy from you. That’s not only frustrating for your sales team, it’s not a good investment of your time and resources.

For example, if you have a pool cleaning business and your marketing efforts drum up a lead from someone who doesn’t own a pool, that would be an unqualified lead. If the lead is indeed a homeowner with a pool, then the lead is qualified and has the potential to be converted into a sale.

This is important because if you spend $1,000 in your marketing efforts (paid media ad placements, email blasts, and more) to generate 100 leads but can’t close any deals, you need to understand why. Lead qualification can help you spot where the problem is and try to address it.

Then it’s up to you to do something about it, but as a founder, that’s a feeling you’re probably used to.

Benefits of a sales process

Implementing a formal sales process with defined stages has a few key benefits:

  • Pipeline snapshot: Stages help you know how many potential sales you have, how far along all the potential sales in your pipeline are and how close they are to closing.
  • Process coordination: Stages allow you to organize the tasks and assign responsibilities as deals progress through a pipeline, especially in complex sales requiring multiple team members.
  • Sales forecasting: Over time, as you analyze your sales data, you should be able to determine a percentage likelihood of deals closing at each stage.

The stages of your sales pipeline are unique to your business and it is best to get some advice from sales leaders in similar industries on how to structure your deal stages. That said, CRMs can help by providing a default structure that vary from simple to complex.

Read on for more information about how deal stages are typically structured in a sales pipeline.

Sales pipeline step-by-step process

As your company grows, you’ll want to evaluate how effective your sales process is by tracking your sales pipeline.

Sales pipeline management is the process of predicting how many upcoming deals you have and how likely they are to close. These forecasts are an important budgeting tool. They can help you identify gaps in your pipeline, so you can address them before they become big problems.

Here is a step-by-step guide to the sales pipeline process:

  1. Prospecting

    Create targeted lists of potential customers. CRMs can help streamline the research process and fill in key contact information.
  2. Qualifying

    Identify whether leads are likely to become customers, what their needs are, and who their key decision makers are.
  3. Quoting

    Craft a proposal to share with decision-makers, which typically includes the value proposition, price information, terms, and conditions.
  4. Contracting

    Prospect reviews the proposal internally, and if desired, terms can be negotiated.
  5. Won/Lost

    If the prospect accepts, they sign a contract and the deal is considered won. If they choose not to accept the deal, then it’s lost.

5 tips for developing a sales process for your startup

While it’s important to understand the fundamentals of the sales process, every company has its own unique needs and challenges. Now is the time to apply what you’ve learned and design a sales process that will help your sales team close more deals, and hopefully, have a good time doing it.

When developing a sales process for your startup, here are a few tips to keep in mind:

1. Know what metrics you want to track

Design your sales process so you can report on key metrics. Consider the following:

  • What will your investors want to see from you?

  • How will you demonstrate your accomplishments in your next VC pitch?

  • What will motivate your employees to stick around?

2. Collect the right information without slowing down the team

When possible, automate data collection as much as you can and try to minimize clicks. As a startup founder, you may want to participate in the sales process yourself, so you can empathize with your team and help them do their jobs as efficiently as possible.

3. Be thoughtful about how you organize your lead sources

You may only have one or two lead sources today, but that number will grow over time. You don’t want to be in the habit of changing lead source data retroactively to fit your reporting structure. Lead source examples include:

  • Organic search

  • Paid advertisement

  • Email marketing

  • Social media

  • Web referral

4. Evaluate your sales process regularly

Nothing is set in stone. As your organization evolves, ensure that your sales process and stages are suited to how your sales team operates and what your needs are for tracking your business.

5. Look to the future

You may not know it when you start, but over time, you should be able to calculate probabilities of closing a sale at each stage. For this reason, it’s important to regularly revisit and update your stage probabilities to improve your forecasting.

Welcome to the sales team

Watching your business grow over time is one of the most rewarding aspects of being an entrepreneur, and you can’t do that without a sales process. It’s easy to get wrapped up in the day-to-day of building a product, raising money and growing your team. You take for granted that sales will happen, but actually, it takes a lot of effort and strategy to close deals.

Now that you understand the sales process, your next job as chief salesperson will be finding a CRM solution that’s equipped to meet your needs, and hopefully, one that can adapt and grow with you as your business changes over time.

Join the Zendesk for Startups community to access a free sales software trial, training opportunities and more.

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