School of Communication Arts 2.0

Note to Mentors

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Unit Purpose and Aims

The purpose of this unit is;

To introduce the learners to entrepreneurial sales strategies, why they are important and how you create one.
a. Consider ways of finding that elusive first customer.
b. Show evidence that they can communicate with potential customers
c. Indicate that they can set prices effectively
d. Describe sales strategies

Learning Outcomes

The learner will;

1.  Understand how to find first customers.

Learners can;

1.1 Classify and identify  target customers for a creative business

1.2 Evaluate which trade associations would provide the best support for sales or marketing purposes and why?

1.3 Create a unique value proposition (UVP)

2. Understand how to create a contact strategy.

2.1 Explain how to manage contacts for sales

2.2 Produce a contact plan.

2.3 Extrapolate what messages are key in selling to different sectors.

2.4 Describe how to set appropriate price points and ranges as part of a costed sales strategy

2.5 Develop a sales strategy that shows their UVP, identified core audience and outline marketing-communications plan.

Learning Tools, Resources & Links

Things that will help the learner develop understanding of this unit;

Mentors – please add your ideas, examples, case studies, links to articles, videos, etc. here.

Ask any start-up, it’s really really hard to find that first paying customer. Often a business finds itself balancing the needs of several parties until the knot ties.

Below is from the blog Onstartups.com and details key learnings from a software start-up.

A Customer Is Someone Who Gives You Money: Call me old-fashioned, but in my mind, in about 99% of the cases, a customer isn’t really a customer unless they are exchanging their money for your software.  So, despite the fact that it is tempting to find people that will try your software (which is a fine thing) and people that you can plan to monetize later (also a fine thing), in neither of those cases, have you really closed your first customer.  In order for them to be your first customer, they have to be a customer.  And for that, they have to pay you money.  In my case, I was too young and inexperienced (this was before the age of the dot-com boom) to even conceive of a scenario where I gave my software aware for free and convinced myself that I had a customer.  The thought never crossed my mind.

Make Sure You Get A Smart User: In many markets, it is actually possible to make a sale (that is get cash) and still not have a user for your software.  Though in this case, you arguably have a customer, you’re only getting partial credit.  The reason is that the most important function of the first customer, even beyond the cash that they pay you, is that they help you learn what it’s going to take to get another customer.  This usually comes in the form of constructive product feedback.

Customize Intelligently: As I’ve gotten older, I’ve gotten a little too clever for my own good.  I like to try and maximize profits as early in a startup’s history as possible, and since I’m generally creating software product companies (vs. service companies), this means trying to do the least amount of customizations possible.  The less labor, the more profits.  Pretty simple.  Though this is still pretty good advice, even better advice is to bend over backwards for that first customer.  Listen intently.  Offer to customize the product (intelligently and rationally).  In my opinion, this willingness to make the product deliver on 100% of a given prospect’s needs is the single largest influencing factor in the first sale.  I will posit to you that regardless of how crappy your product is, there is someone out there that can be convinced to buy it if you simply demonstrate the ability and willingness to make it do what they want.

Support Before Referencing: Often, it is tempting to leverage that first customer and use them as a reference to get more customers as soon as possible.  In fact, given that you might be afraid that your product really, really sucks, it’s even more tempting to get that reference while the first customer is still basking in the glow of their brilliant purchasing decision.  Don’t do this.  Wait till you’ve had a chance to get through the honeymoon period with this first client and had them face their first big issue.  Respond to this first big issue with guns a blazin’.  You should be defying the laws of time and space in responding to the first customer’s issues.  They should be wanting to tell their future grandkids about your stellar support.  Then, and only then, do you get bold enough to ask them to be a reference (and yes, you do have to ask them).

Reward With Recognition: Many start-ups try and reward the first customer with deep price discounts on the product.  In many cases (like ours), this is a mistake.  The reason is that this assumes that customers care more about price than other things – and this is not always true.  In our case, shedding 20% of the price would have saved them $1,000.  Candidly, they just didn’t care about that.  Instead, we showered the customer with genuine recognition.  We praised them at trade shows for their “forward thinking” nature.  We helped them with issues that weren’t even related to our product.  We spent time and energy making them look good.  This kind of reward was much more important and relevant.  Chances are, we were not unique in our situation.  Think about what your customer might actually value.

Reward With Recognition: Many start-ups try and reward the first customer with deep price discounts on the product.  In many cases (like ours), this is a mistake.  The reason is that this assumes that customers care more about price than other things – and this is not always true.  In our case, shedding 20% of the price would have saved them $1,000.  Candidly, they just didn’t care about that.  Instead, we showered the customer with genuine recognition.  We praised them at trade shows for their “forward thinking” nature.  We helped them with issues that weren’t even related to our product.  We spent time and energy making them look good.  This kind of reward was much more important and relevant.  Chances are, we were not unique in our situation.  Think about what your customer might actually value.