Startup Sales Secrets I Learned From Yelp (Guest Post)

Today, I’m happy to welcome back a frequent contributor to Hack The System — Alan VanToai — who has used his experience to launch several profitable businesses over the last 3 years.

In this post, he’s going to give us an inside look at exactly how he learned to take a new startup idea, find customers and start selling the product.

You’ll even get to see the 7-step strategy he learned while working at Yelp, where he helped to bring in over $250,000 in sales per year — all over the phone.

This information is super valuable, so keep reading!

-Maneesh

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Hey there. It’s great to be back on Maneesh’s blog. This is my third time writing for our buddy Maneesh – you may remember some of my earlier pieces:

In “Startup Chile” – I broke down my strategy for getting my startup SimpleCrew a $40,000 equity-free grant to build my business in Santiago.

In “Gateway Drug” – I shared my thoughts on how to get started on big goals that might be daunting to start at first glance.

In this post, I want to offer you something of a gateway drug into the world of sales. I’m going to give you a step-by-step sales process that will give you the confidence to pick up the phone and sell your product or service to potential customers.

It’s true, this post won’t give you all the answers. But at least it will get you asking the right questions.

If you have previous sales experience, this post will be review for you, and you might recognize areas where the sales system I learned at Yelp and implemented in my startup overlaps yours.

If you don’t have previous sales experience, you’ve come to the right place. Whether you’re actually doing sales, or your raising money, doing PR outreach, recruiting a sought after employee, or dating in a major american city, there’s a lot for you to learn in this kind of mindset. Read on.

I’ll start with my story (briefly, I promise).

Between 2010 and 2011 I worked as an Account Executive selling advertising packages to small businesss at Yelp.com. While at Yelp, I was responsible for selling over $20,000 of advertising every month, mostly to small businesses in New Jersey and New York City.

The work was tough, 60-80 phone calls a day, for a total of usually around 3-5 hours on the phone per day, mostly on script.

It was boring. It was repetivive. It was, at times, painful. But I wouldn’t trade that experience for the world. Here’s why… 

After leaving Yelp, I got together with my friend Mike, and we created a product called SimpleCrew. I didn’t think about it at the time, but my Yelp sales training experience would come to be the driving force and foundation upon which we built SimpleCrew into the success it is today.

See, we launched SimpleCrew in October of 2012, and waited. We exhibited the classic “field of dreams syndrome”, which is to say, we thought if we built it, they would come. The flood gates would open, and we would swim away to our private island amidst an ocean of cash.

But, of course, reality proved contrary to the dream, and 6 weeks after launching, we found ourselves with still no customers.

It was time to put on my Sales hat, and start making calls.

Over the course of the next few days, I found a database of leads, and began making calls according to the sales process I’d practiced so many times at Yelp. Within a week, we had our first customer. Within a month we had 5 more.

Fast forward a year and half later, and SimpleCrew has grown exponentially. Today, profits from SimpleCrew are supporting my cofounder and I quite comfortably (not to mention with time and location independence), and our customer base and revenue continue to grow.

Sales played a pivotal role in our early customer growth, and whether you’re selling a product or service, you too can use this winning sales strategy to get customers in the door and close the deal.

So let’s get to it.

Enter: The Sales Pipeline
The sales pipeline is the actual sales process from which you take a prospect (potential customer) from a lead all the way through a close.

I like to make the analogy of a sales pipeline as buckets that you organize your contacts in. As the conversation advances with a given prospect, you take them out of one bucket and into another.

It’s a critical system to have in place, so your sales process will be streamlined and organized. Your sales will be more effective and more efficient, and you will close more deals and make more money.

But don’t worry, what I’m sharing with you now is not some behemoth task or overwhelming process to implement. It’s a simple, to-the-point formula that you will be able to implement now, or save for later when you go to sell your first product or service.

Let’s get to it.

The Sales Pipeline

The number of steps in your sales process can vary depending on the complexity of your sale (…enterprise customers buying Oracle software will have more steps and greater complexity than the door-to-door brush salesman).

In this article, we’ll go over a typical 7-stage sales pipeline. It’s the same pipeline we used to sell ads at Yelp, and that I adapted to sell SimpleCrew.

Again, think of the bucket analogy. You’re advancing prospects through the different stages with phone calls and emails.

Importantly, prospects can only advance through the pipeline, so there’s no downgrading or pushing prospects backwards.

Notice that a prospect can jump forward more than one stage on any given call (it’s possible to schedule a pitch appoint with a DM on the first call with a lead), and on the flip side, it’s possible to take several calls to advance a propsect a single stage.

Also, note that prospects can go into the “Lost” bucket at any time, from any stage of the pipeline. We’ll talk more about why that’s important and why you’ll want to be quick to pull that trigger later in the post.

Now, I’ll describe each of the 7 stages, the goals at each one, and how to handle the conversation at that step of the pipeline.

1. Leads

Leads are the untouched prospects, people you haven’t spoken with or reached out to yet. At this stage, the most important thing to keep in mind is that you want to find the best possible leads.

A great lead is a person or business who has a need for your product or service, and the authority to purchase it.

Need is the first part. Make sure your product or service is relevant to the customers you’re calling. If you’re selling flood insurance, areas near water will provide richer leads than areas in desert climates.

Think critically about where your potential customers gather. Do they join trade associations? Do they read certain blogs? Do they go to certain events?

If you can, try and find directories, contact databases, or lists of your target customers. There’s ways to do this on sites like LinkedIn for inividual professionals, Yelp for local businesses, or even phonebooks.

The best format to put your leads in, for someone just getting started, will be a Spreadsheet with all the key contact info of your contacts.

– Business name
– Phone number
– Email address
– Website
– Business owner name (if possible)

For most sales, this information will do. But, depending on your product or service, you might need more details than that.

2. Reaching the Decision Maker

Once you’ve got your leads in place, it’s time to make the call.

The goal for the first call(s) is get ahold of a decision maker. A decision maker is the person (or people) within the organization who has the ability to make the purchase.

Keep that in mind – not everybody in a business or organization has the authority to decide to buy your product/service, and hand over billing info.

If you’re selling advertising to a restaurant and a hostess answers your first call, you can’t pitch the hostess on why the restaurant needs advertising. You need to try and get in touch with someone, typically the business owner, who both cares about things like advertising and has the ability to purchase it if they want to.

It helps, in this case, to try and find out the owners name in advance. If you can’t figure it out, you can ask for the owner or someone who you might speak with regarding advertising.

If you get handed over to the business owner, proceed to the next stage. If not, kindly ask the non-desicion maker (NDM) for the business owners name, and when a better time to call back might be. Note the name and time down, and leave a brief message for the owner.

Try again on the call back date, and repeat. As a rule, if you call 3-4 times and don’t make any progress in getting in touch with the DM, it’s a better use of your time to “Closed Lost” this particular prospect out of the pipeline.

3. In Contact with the Decision Maker

Now you’ve gotten the DM on the line. The goal at this stage is to build rapport with the DM, offer a little value, and ultimately schedule a pitch appointment with them.

During the pitch appointment – which, at Yelp was about a 20 minute call but might be longer or shorter for you depending on the complexity of your product/service – you’ll really get the chance to learn more about the prospect and walk him through your service/product.

But for now, your goal is to get to that appointment scheduled. First, keep in mind the KLT here – a prospect has to Know, Like, and Trust you before moving forward and making any progress on a sale.

So, offer value. At Yelp, we did this by telling them about their Yelp profile and explaining to them how people were using Yelp to find businesses like theirs. We offered them access to Yelp’s free tools for business owners, and only then, we proceeded to schedule the pitch appointment.

Remember – when you ask for the pitch appointment, frame it in a way that shows the benefit for your prospect.

Not: “I want to schedule a 15-20 minute call with you so I can walk you through the Yelp advertising program.”

That doesn’t frame it in terms of their benefit. When you go for the ask, go for something more along these lines:

“Let’s schedule a 15-20 minute call where we can discuss your business, and give the you chance to learn more about how Yelp is going to help you get more customers.”

4. Pitch Appointment Scheduled

Here, you conduct the pitch.

If it’s been a few days (or more) since you scheduled the pitch appt, it can be helpful to send a reminder the day before the pitch (or earlier the same day).

If you go for the pitch and the DM flakes on the pitch appointment, don’t take it personally. This happens all the time, and is a natural part of the numbers game of sales.

For example, at Yelp, we ideally had 4-5 pitch appointments scheduled every day, and expected to carry out at least 1 sales pitch. So, it’s a numbers game.

If the pitch appointment flakes, the goal is to get the DM back on the phone and reschedule the appointment for another day.

Again, following the logic mentioned before, if you go 3-4 calls without making any progress, Closed the opportunity Lost, and get them out of your pipeline. Make time for leads that are actually advancing through the pipeline, and don’t stress out over the ones that aren’t. Just close them Lost.

If you get the DM on the phone for the pitch, this is where you want to learn more about their business, explain your story, walk them through your product or service, and then ask for the close and handle objections.

The actualy anatomy of the pitch and best practices are worthy of an entire blog post of their own. I’ve written more about the pitch in my Sales 101 Series. Check it out here: Sales 101 Series — The Anatomy of  Pitch.

Check that out, and think about how you can craft your pitch to be as effective as possible.

Once you’ve carried out the pitch, the prospect can go into one of three buckets.

5. Pitched

Ideally, after a pitch, the prospect Closes one way or another – either they decided to buy your product and hand over billing info, or you uncover that they’re not going to be a good fit for your service and they Close Lost.

Sometimes, for some reason or another, the decision isn’t made one way or another. If that’s the case, the prospect goes into the “Pitched” bucket. Your goal here is to get them out of Pitched and into Closed Won or Closed Lost as efficiently as possible.

This is a delicate stage, because after a pitch, over time, the buying temperature will cool off. This is the thing: even if your product or service will help a customer, like Yelp advertising bringing in more business, or SimpleCrew helping street teams working together more effectively, to implement a new product or service takes change, and sometimes it’s easier for people to ignore change and keep doing things the same old way.

Even if that means settling for less business (even if they might need more), or sloppy street team management.

A sale is an agent of change. Your product or service likely proposes to change the way the person’s business operates, at least in some small way. A property of inertia is that an object at rest takes an outside force to move. Keep that in mind, and try to advance the sale while it’s still warm.

Here, get the prospect back on the phone, and open a dialogue where you left off:

“Hey John. Last time we spoke you were interested the $550 Standard advertising package that’s going to give you 600 ad placements every month. What questions do you have before we get started?”

6. Closed Won

After the pitch, when the deal is closed, the lead goes here. Now, your goal transitions to account management.

Make sure, as much as possible, that your customer is happy with their product or service. And keep in touch with them. Schedule follow ups for the future to make sure they’re happy and they know you care.

7. Closed Lost

Closed lost is where you put the prospects that won’t be converting or progressing, for now at least. You want to remember, as mentioned before, to closed lost quickly.

If a prospect gets caught up at any stage of the pipeline, maybe 3 or 4 touch points with no response, close them so you can make way for other prospects who care more and have stronger needs and desires that your product or service will fill.

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So there you go! This was the basic 7 stage pipeline strategy that has driven Yelp (and countless other sales orgs) to hundreds of millions of dollars in revenue.

I adapted this same pipeline to make SimpleCrew the success it is today, and whether you’re a freelancer bringing in more business, an entrepreneur selling a new app to potential business customers, or a small business owner generating leads for your plumbing service, implementing this pipeline mindset will help you streamline you sales process so you can stay more organized and close more deals.

Additionally, for those of you who want a little extra, I’ve wrapped up my best content in a membership site at Super Smart Sales. Learn more about Super Smart Sales here.

Now, go out there and close some deals!