1. Step 18: Map Sales Process to Acquire Customer

2. Four Factors Entrepreneurs Overlook Sales Process Changes Over Time
Outline
Overview
Four Factors Entrepreneurs Overlook
Sales Process Changes Over Time
How to Map Your Sales Process
Workshop
January 3, 2019

3. Overview
This step:
Develop short-term, medium-term, and long-term sales strategies for your product
January 3, 2019

4. Previous step: first-pass estimate of LTV
Overview
Previous step: first-pass estimate of LTV
Now ask question: how much will it cost to bring a new customer to our product?
January 3, 2019

5. Calculating Cost of Customer Acquisition (COCA) is pretty tough
Overview
Calculating Cost of Customer Acquisition (COCA) is pretty tough
Concept is simple
Yet it’s often miscalculated
Need to understand how much is spent on sales process needed to gain new customers
Do analysis based on facts, not hopes
Start by mapping out sales process
January 3, 2019

6. Remember, balance between LTV and COCA is critical!
Overview
Remember, balance between LTV and COCA is critical!
Rule of thumb: LTV = 3 * COCA
“Get 3X profit than cost to acquire new customer”
January 3, 2019

7. Four Factors Entrepreneurs Overlook Sales Process Changes Over Time
Outline
Overview
Four Factors Entrepreneurs Overlook
Sales Process Changes Over Time
How to Map Your Sales Process
Workshop
January 3, 2019

8. Four Factors Entrepreneurs Overlook
Cost behind all sales and marketing
Long sales cycles that cost a lot
All customers who do NOT buy your product
Corporate shakeups
January 3, 2019

9. Four Factors Entrepreneurs Overlook
Cost behind all sales and marketing
Salaries of salespeople
Cost of printing brochures
Cost of creating website(s)
Cost of trade show exhibits
Cost of targeted advertising (e.g., industry publication)
Cost to develop white papers …
January 3, 2019

10. Four Factors Entrepreneurs Overlook
Long sales cycles that cost a lot of money
Entrepreneurs tend to only remember short sales cycles
Need to be realistic! How long b/t ad and purchase?
All customers who do NOT buy your product
Yet still required sales and marketing costs to reach them
January 3, 2019

11. Four Factors Entrepreneurs Overlook
Corporate shakeups
Perhaps new DMUs
Different policies and personnel
May want different products
January 3, 2019

12. Four Factors Entrepreneurs Overlook Sales Process Changes Over Time
Outline
Overview
Four Factors Entrepreneurs Overlook
Sales Process Changes Over Time
How to Map Your Sales Process
Workshop
January 3, 2019

13. Sales Process Changes Over Time
COCA will start high then decrease over time (in general)
Sales process broken down into three periods
Short term
Medium term
Long term
January 3, 2019

14. Sales Process Changes Over Time
Short Term
Primary focus is to create demand and fill orders
“missionary” sales stage
Ends when you start to see demand that you did not generate directly
Direct Salespeople
Web-based techniques
Direct interaction w/ customers
Year 1
January 3, 2019

15. Sales Process Changes Over Time
Medium Term
Focus shifts from demand creation to order fulfillment
Word of mouth + distribution channels take on demand creation
Make use of distributors and value-added resellers
Manage logistics
Year 2
January 3, 2019

16. Sales Process Changes Over Time
Long Term
Primary focus is fulfilling customer orders
Do very little demand creation
Continue to manage clients and logistics
Years 3+
January 3, 2019

17. Four Factors Entrepreneurs Overlook Sales Process Changes Over Time
Outline
Overview
Four Factors Entrepreneurs Overlook
Sales Process Changes Over Time
How to Map Your Sales Process
Workshop
January 3, 2019

18. How to Map Your Sales Process
Questions to consider:
How does target customer become aware that they have a problem?
How will target customer learn about our product? (i.e., that there is a solution to their problem).
January 3, 2019

19. How to Map Your Sales Process
Questions to consider (cont’d):
Once customer finds your business, how will you educate them on your product so they can make an informed decision?
How do you make the sale?
How do you collect money?
January 3, 2019

20. How to Map Your Sales Process
General Categories of sales channels:
Direct Sales
Inside Sales
Internet Sales
Third-party Resellers
January 3, 2019

21. How to Map Your Sales Process
Direct Sales
Aka ”outside sales”
Salespeople who work for company
Direct communication (e.g., face to face)
January 3, 2019

22. How to Map Your Sales Process
Inside Sales
Aka “telesales”
+ other communications to create dialog with customer
Human in the loop, less interaction than direct
January 3, 2019

23. How to Map Your Sales Process
Internet Sales
Massive ”catch all” category
Sales done by computers
Autogenerated s
Big data analysis
Social media postings
Preference engines
Etc.
No human in the loop
January 3, 2019

24. How to Map Your Sales Process
Third-Party Resellers
Not your employee but sells product
Stores
Value-added resellers
Distributors
Catalogs
Etc.
January 3, 2019

25. How to Map Your Sales Process
Helpful suggestions (to get started)
LTV
Long Term Sales Channel
$30
Only internet sales; no humans
$300
Mostly internet sales; small amount of inside sales
$3000
Mix of internet sales + inside sales + 3rd party resellers
$30K
Mix of all channels; heavy reliance on inside sales + 3rd party
$300K
Field sales; support for inside sales and 3rd party
$3M
Field sales; some other channels
$30M
Field sales only
January 3, 2019

26. Four Factors Entrepreneurs Overlook Sales Process Changes Over Time
Outline
Overview
Four Factors Entrepreneurs Overlook
Sales Process Changes Over Time
How to Map Your Sales Process
Workshop
January 3, 2019

27. Worksheet #1: Sales Channels for Short, Medium, and Long Terms
Workshop
Worksheet #1: Sales Channels for Short, Medium, and Long Terms
Length of time?
Assumptions?
Risks?
Milestones?
Short => create product, create demand
Medium => refine product; less demand creation; logistics
Long => fulfill orders; scale
January 3, 2019

28. Worksheets #2: Sales Funnels Draft from step 13 Revise and refine
Workshop
Worksheets #2: Sales Funnels
Draft from step 13
Revise and refine
One for short term
One for medium term
One for long term
January 3, 2019