Founder led sales is key to any start-up’s early revenue success. You may not think you are a natural salesperson – nor enjoy the role – but it is the most effective way to win early customers. Many founders are put off by the push back from potential customers, taking it personally and don’t want to get into a what many see as a tetchy discussion, but handling objections is a vital selling skill of effective founders given the barriers often faced.
An objection shows your prospect is not ready to buy and you need to build more trust and a relationship, not just close a transaction. Objections can surface after the initial sales pitch or later in the process at contract negotiations. Without objection handling, deal opportunities and ultimately revenue disappear at the first mention of a concern. When founders feel confident and able to handle objections successfully, more deals will move through the pipeline and close.
The specific startup objections you’ll hear include You’ve no track record; It’s too risky to be an early customer; Will your venture still be around in six months’ time? The reality is that the first statement is a superficial objection with other potential underlying concerns. The mistake many founders make is becoming defensive, leading to increased friction, resistance and frustration on both sides of the conversation.
Here are ten tips on objection handing for founders – excluding pricing which is worth its own blog – to help you nail those early, vital sales.
1. Demo the problem, not the product
Founders often spend the majority of their customer pitch repeating the same laundry list of features, going into a lavish product demo explaining every button, knob, and switch until the prospect began to drift off into an afternoon nap.
In your demos, don’t start with your product. Start with the bigger picture. Figure out what their current process or solution is: How are you currently managing the process? What are some of the inefficiencies you see? Do you have any existing initiatives to redress this issue?
Nothing beats the power of the product demo in terms of getting inside the heads of your prospects and figuring out their actual needs and concerns. In your product demo, you’re trying to get potential buyers on board to help you understand their needs and fit with you.
Ask the right questions and always be listening.Every salesperson will tell you that their mantra is always be closing, but instead of showing people the things they can achieve with your product, get the prospect to share their pain behind the current process. Once that becomes clear, then you can flick on your demo and zero in on how the problem can be solved. Frame your product as a specific solution to their specific problem, don’t just show off your product.
By asking great questions, founders create great value in the eyes of their prospects. You’re an expert on your product and industry. Act like one. Asking questions enables you to collaborate with the customer to uncover the issues your product can solve for them and establish trust.
2. Separate real buying intent from lukewarm interest
When you’re a founder, lots of people will be interested in your innovation simply out of curiosity, but there’s a big difference between saying they would buy your product and actually paying money for it. How do you find out if they have real intent to buy?
Here’s a simple question you can ask people to find out if they have real buying intent: What are the steps I have to take for you to become my customer? This is a virtual close. Listen carefully, watch out for red flags, and make sure you get a specific answer. – keep an ear out for indifference masking an inherent objection of no intent. Once you’ve reached a point where the virtual close has occurred, do a test closing: This beta program is heavily subscribed. If you sign up now, you’ll get it in the next four weeks.
And then ask them for money. Make it risk-free. Tell them their payment is 100% refundable. If they’re not happy with the product, they can get their money back. This has more impact that a random percentage discount. Not everyone will be willing to give you money, but you’ll get respect for asking and flush out intent.
3. Recognise not everyone is an early adopter
Leave the door open for later. Working with an early-stage start-up comes with a greater degree of risk than working with a more established company, so not every prospect is going to be comfortable being an early adopter of your product.
Early adopters are a special breed so when you find them, treat them like gold. And for those that aren’t quite ready to take a leap of faith, make sure to leave things on good terms and let them know that your door is always open. Keep in touch by sharing your progress and successes, you might be surprised who comes knocking a month or two down the road.
4. Shape your ideal customer profile
Pretty much every founder I speak with who struggles to hit their sales goals hasn’t determined their ideal customer profile. They’re trying to sell to the wrong customer! What is an ideal customer profile? It’s basically a description of a fictitious organisation which gets significant value from using your product, because they have the problem you’re seeking to solve. Ask yourself, who will buy from me, and why?
You don’t just fabricate an ideal customer profile out of thin air. Instead, systematically identify shared traits and characteristics of real customers from your lead gen activity who are succeeding with your solution, and taking in the objections from those who don’t buy.
In the early days, not everyone will want to be your customer, so don’t pressure yourself to close every deal. Listen and learn from their objections and refine your sales pitch, reconnect once you’re more established. For now, focus on pre-qualifying potential customers. Sell only to the companies who are excited and culturally ready to partner with a startup.
5. How to sell things that don’t yet exist
Founders are nervous that their MVP isn’t slick, complete, or pretty. But that’s the reality of an MVP. You can only develop for so long before you have to get out of the building with your scruffy, scrappy MVP. I’ve heard many founders pitch to customer apologetically – We’re getting a lot of interest for this, but many potential customers want a key feature that we don’t have yet.
The best way to discover if you have product-market fit market is to sit in front of potential customers and sell the vision. You need to charge for the product today, no matter if it’s ready or not. How can you charge for something that doesn’t exist yet? They might not be able to benefit from the features they need right away, but they can pay in order to receive one of two key benefits:
You need a minimum viable pitch, something along the lines of:
Be part of the early adopter’s group that helps test and shape the early release. We can work on shortened timelines for future releases if you commit today, and long-term collaboration as R&D partners influencing the product roadmap.
6. Missing features
The customer hits you with I like your product, but I wish it had this feature. A mediocre founder will panic and ask himself What do I have to say to make this sale? A great founder will ask What does this really mean? What pain does the customer wish my product could relieve? Put yourself in the customer’s shoes. They’re trying to envision how your product will make them more successful. When they ask about a missing feature, it means that in their mind there’s a gap between what your product can do and what they need it to do. It’s unavoidable but indiscriminately fulfilling their requests would lead to an unstructured, bloated product roadmap. Product strategy means saying no.
To create a product that really helps your users succeed, you need to think more deeply and uncover what the few things that truly matter are and focus on getting them right. So back to asking good questions: We don’t have that feature right now. Can you tell me why you need that, and how exactly you want to use it? You’re finding out the real need behind the feature. What’s the use-case? Often a prospect will respond about some kind of workflow, enabling you to ask more specific follow-up questions. Then be bold:
Ok, I get why this is important to you. I understand why you want this. It’s not something that our solution can do right now, but I can offer you a workaround that accomplishes exactly what you want with the feature-set we have today. Here’s what you do….This might be a little bit different compared to what you’re used to, but you get almost the same outcome.
Sell what you’ve built, don’t default to simply adding a customer feature request to your roadmap, show the value of your current product and thinking, and offer insights on potential workarounds, to deliver solutions without having to rely on the missing feature. You won’t have the time and resource to build for individual customers.
7. Selling against an incumbent
Your software really looks like the best solution, but we will go with Salesforce, simply because they’re the standard in this field. We know their software is proven and can scale and grow.
You should expect to field questions about how your product stacks up to the competition. There will always be instances where competitors offer features or functionality that you don’t so appears a more complete product.
When handling such objections, my advice is essentially don’t go there. Instead, focus on what you do know – your product and your strengths – and emphasise why those strengths are important to solving your prospect’s challenges. Avoid getting into a ‘compare and contrast’ scenario and pointing out competitors’ weaknesses.
People making decisions based on fear of making mistakes. You manage the emotional and irrational side of this by building trust, reducing the distance between doubt and certainty. It’s about instilling confidence that they can count on you, your product, and your company. Ultimately people buy from people they trust. Be that person.
8. What if your startup fails?
The classic objection every start-up faces, you’re asking prospects to go with you without supporting evidence. Will you run out of money and cease trading? Your startup is too small.
There are drawbacks to working with a startup, but there are significant advantages, so highlight the benefits: they get your undivided attention, they get agility, they get influence. Make it a collaborative partnership, not client-supplier transaction -outline your future growth roadmap – if you’re planning to hire ten people in the next year, let them know. Remind them every company, including their own, started with one or two people.
9. Funnel segmentation – identify the challenges to buying
Separate the objections by ‘client type’ – the customer’s role, company size, budget etc. You can do this quantitatively and also make qualitative judgments from each failed prospect. Use this to refine your sales approach. Additionally, there are customers who have difficulty onboarding any new product due to internal challenges, so learn the drivers and frequency behind these – concerns about security, scalability, integration, data etc.
10. Complexity in your sales process
Know thyself, find the friction points in your sales process from the prospect’s perspective. What worked, what didn’t, where were the gaps? Having failed to make a sale, ask for feedback, and include in this a walk-through of your sales process. This isn’t a sales call trying to get in the door again, all you want to do is learn to improve and increase conversion. Track conversion rates and take onboarding feedback.
All founders need to sell. Customer acquisition is about asking and listening, not telling and selling. Ideas are easy, implementation is hard. Learn fast, learn early, learn often. Chase your vision, not the money. The money will follow you. Be a turtle. They only make progress when they stick their neck out.
