Thread by @dunkhippo33

If you're tired of hearing about fundraising, today's thread is on generating momentum for SALES.

(basically the same thing but money from other people)

Read on >>

1) Re-iterating: getting ppl to part w/ their money is tough. There needs to be a forcing function, because it's almost always better to wait for more info.

Examples of this in the sales context: wait for a more mature product / case studies.

2) So like w/ fundraising, you'll want to think through the forcing functions for sales. In this case, it tends to be:

-better pricing
-better experience or service
-better clout or cache

3) Better pricing: this is an easy one - tried and true.

Events -- this is why they give you early bird pricing for signing up now.

Or seasons passes to ski lifts or amusement parks or whatnot.

If you know you want to buy, we'll give you better pricing for buying now.

4) But price is really only a good forcing function if someone is *already bought in*. (This applies to fundraising as well).

Most ppl are not already bought in. They barely know you.

So this may even eat into your sales from loyal customers who'd be willing to pay full price.

5) Better experience: this shows up in things like cohorts or classes. Hey we have 50 slots for the first cohort. After this cohort, we'll have 1000 ppl in our class. Sign up for this one.

Or if you pay the VIP price, you will get special attn. But we will only have 5 VIPs.

6) Arguably, Kickstarter campaigns are a combination of better pricing and better experience.

If you are bought in, you get better pricing. AND, you will get special treatment for being one of the first buyers - we will put your name on a plaque.

7) Better clout is the hardest one to pull off, because you need to generate a cool factor -- but you're so new... this is hard...

A good example of this is Superhuman. You don't get better pricing. And you don't get VIP treatment / a better experience.

But you do get cache.

8) If you have a product that you can convey as having a WOW factor (by video or whatnot) and will be 20x better than alternatives for a mass group of ppl, then I think this can work.

But, it's hard to say what products will fit this bill.

9) Products that have done this successfully before (besides Superhuman) have been Mailbox and Mint.com amongst others.

They all used a waitlist to help w/ the cool factor.

I'm a biased investor but @OthersideAI and Brdg also have that IMO.

10) Superhuman took this a step further in their sales. The cool factor leads to a long waitlist. But, they then do a high pressured sales technique (I say this in a good way).

When you do qualify, you have to schedule a 20 min zoom call. They really pioneered fast sales IMO.

11) You must bring your credit card to the Zoom mtg. And they will show you the product and how it can SOLVE your problems on the call. And then they will ask for your cc midway through the call.

I'm sure some ppl have left the mtg, but you feel like you're bought in already.

12) A challenging issue w/ sales is overcoming inertia. A would-be customer will spend days/weeks/months putting off buying. Even if it's a need. Ppl get busy.

Superhuman's sales process prevents you from doing this. If you want to buy, you need to buy now.

13) This allows them to speed up their sales cycle. In addition, it also reduces their customer acquisition costs (CAC).

Previously, I didn't think high-touch sales was possible for products that charge $50/mo or thereabouts.

They proved that it works IF you speed up sales.

14) Think about it -- they can do 3 20 min sales calls in 1 hr. If an ave sales person is comped $120k per yr (incl commission) -> $60/hr, then each call costs Superhuman $20 of person-time.

If they convert at 66%+, they break even on their salespeople on the first mo.

15) That's incredible! 1 month payback period. Faster cycles to get more customers.

The reason traditionally most high-touch sales required higher LTV to breakeven is the huge cost to having a sales person constantly follow up and hop on many calls with would-be buyers.

16) Superhuman creates a forcing function to get ppl to buy -- that coveted zoom call that most ppl on their waitlist won't get for a long time.

If they just allowed ppl to self-serve, the CAC would be a lot higher.

17) So more generally speaking, things I tend to hear from companies is that they offer a 2 wk trial or something. And then at the end of it, ppl say "Oh I didn't use it. Can I trial some more?" And that extends out the sales cycle.

18) Or you hopped on a call w/ a would-be customer and then said you'd follow up in a few days to see if they onboarded ok.

But then the would-be customer got busy and didn't do anything.

19) All this happened to me a LOT when I was running my ad company. Your customers get busy, and then you spend a lot of time chasing them down.

This is not the situation you want to be in to get a good sales process going.

20) So think about how can you create more forcing functions?

What would get ppl to move faster? How do you address concerns immediately and give ppl a way out if it doesn't work after they've bought?