Marketing and Sales
There are a number of points to address as to how you will let prospective customers know about your product or service, and how you will actually sell the product. You'll need to convince a prospective investor that you have carefully researched and thought through justhow the sales process will work.
Product Positioning
How will you describe your product to customers? Are you sure you understand what problem it solves?
There are usually multiple ways to think about the "problem" and it's worth some thought. Examples:
Why would someone buy a cup of coffee?
- For the caffeine?
- For the social experience of chatting with someone over a cup of coffee?
- To have something to sip on during a long boring commute?
- To warm up on a cold morning?
Why would someone buy a BMW?
- As a purely practical way to get from point A to point B?
- For the performance?
- For the image?
Understanding the "real" reason for buying can change the way you design and describe your product or service.
Marketing Strategy
How will you create awareness of your company and your product or service, and how will you generate sales leads? For your financial projections, you'll need an estimate of how much these marketing programs will cost. (And don't just assume you should use all of these. Do some market research to find out how customers in your target market find out about and buy new solutions. That will help you focus your marketing investments.)
Some possible approaches:
- Advertising
- Press releases
- Press events
- Trade shows
- Presenting papers at Technical conferences
- Direct mail
- Building an email database that you send information too on a regular basis
- Going to customers you (or your sales people) already know
- Partner with a company that has access to your target customers
Who is the Customer?
Who is your customer? That's often a more complex question than it first appears to be. In a typical sale:
- Who will use the product or service?
- Who benefits from use of the product or service (it may not be just the user)
- Who actually purchases it?
- Who approves the purchase?
- Who is involved in evaluating the product or service?
What is your Sales Channel?
Exactly how will you sell the product? Some possibilities:
- Direct sales channel
- OEM partner (who?)
- Value-Added Resellers (who?)
- Distributors (who?)
- On the web (how?)
- Telesales
- Is your international sales strategy different from your domestic strategy?
The Sales Process
What will the sales process look like? Describe the basic steps that must happen from the customer first learning about your product or service through to the point where you receive a purchase order. Some questions to consider:
- How do you first introduce the customer to your product or service?
- Will the product have to be demonstrated?
- Will the customer need an evaluation period?
- What steps will there be in the approval process?
- How long do you expect the entire sales cycle to be?
The last question is particularly important. Especially for your early sales, the sales cycle (the time it takes to complete the sale) is likely to be much longer than you expect. Early on, you have an unproven company and an unproven product. That lengthens the sales cycle. But also, in the early sales you are literally learning what is the best way to describe the benefits of and to sell your product or service. If your product or service is new and different, it can take a while to find just the right way to position and sell it. So that learning process will tend to further lengthen the early sales cycle.