Startup sales make for difficult, exciting, often unpredictable waters to navigate. Everyone involved in a startup sales org — from founders down to reps — is bound to face a host of challenges as their company gets its bearings.

To help you get a better feel for how to approach the trials and tribulations that come with sales at a startup, we've put a comprehensive guide on the subject together. Here, we'll cover some crucial elements of a startup sales strategy, review key startup sales metrics, and take a look at what it's like to work in startup sales.

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Startup Sales Strategy

Consider targeting a niche market.

Identifying a lucrative target market is one of the — if not the — most important actions any startup can take. You need to carve out a viable space within your competitive landscape. If you try to appeal to everyone, you run the risk of spreading yourself too thin and diluting your brand identity.

Your target market sets the tone for your messaging, your marketing efforts, the sales methodology you subscribe to, and how you structure your sales process. Some degree of specificity is key here — and in many cases, pinning down a specialized, underserved customer base can be in your best interest.

If no one knows who you are, you'll probably have trouble resonating with anyone looking for a solution like yours, straight off the bat. You're better off targeting a niche within your broader market — whether that be prospects in a specific location, of a particular scale, with a certain degree of buying power, or any other defining factor that sets them apart from their peers.

Put together well-constructed, specific buyer personas.

This point is a sort of extension of the one above. Once you know who you want to sell to, you need to piece together a concept of how you're going to sell to them. That starts with you creating detailed buyer personas.

Buyer personas are essentially archetypes of your ideal prospects that guide your sales and marketing efforts — hypothetical mockups that cover the demographic and psychographic qualities of the buyers you're targeting.

If you want to lock in a lucrative target market, you need to have some concept of the buyers that compose it. Getting there typically starts with a mixture of activities like research, surveys, and interviews with your target audience.

It can also involve contact data analysis, receiving feedback from your sales team on their interactions with prospects, and anything else that can give you a picture of where your buyers are coming from and what makes them tick.

After you've established what your ideal buyers look like, you can start to tailor your sales process and craft specific messaging that will resonate with them. As I mentioned above, appealing to a lucrative target market might be the most important action any startup can take — creating detailed buyer personas helps get you there.

Be strategic in how you put your tech stack together.

A well-constructed tech stack has transitioned from "nice to have" to "need to have" in the modern sales landscape. Even the most skilled startup sales team can only get so far if they're not supported by solid technology.

CRMs, sales automation software, conversational intelligence platforms, email trackers, lead scoring tools, analytics resources, and a host of other relevant programs can help you kickstart and sustain successful sales efforts. So if you want to get the most out of your startup sales, you need to invest in the right tech — but that's easier said than done.

There's a borderline-overwhelming number of options at your disposal — and some of the premier ones might be too pricey for an organization like yours. The key here is to identify the tech that will be most relevant to your operations, consider the options that fit each of those bills, and select solutions that you can afford both now and as your business scales.

Several sales software resources operate on freemium models, meaning you can access a limited number of features — typically enough to suit very young startups — for free initially. But as your business grows, you'll have to pay to tap into a wider range of capabilities.

If you're just starting out, using freemium programs can be a big help, but be sure to select solutions you feel comfortable scaling with that you'll be able to afford as you grow — a big shakeup in your tech stack can be a headache for a burgeoning startup.

Startup Sales Metrics

1. Burn Rate

Your burn rate is the pace at which your startup spends capital before reaching profitability. It's a metric you always need to keep a pulse on. If your burn rate is positive and you have limited cash runway, you need to reevaluate your operational expenses or consider pursuing more funding.

You have to spend money to make money, but if your spending is rapidly outstripping the cash you have on hand, you're setting yourself up for failure. Always know how much capital you have at your disposal and the rate at which you're digging into it.

2. Customer Acquisition Cost (CAC)

Customer acquisition cost (CAC) is exactly what it sounds like — the average sum of sales and marketing costs it takes to earn a new customer over a specific timeframe. It's one of the most important metrics for gauging your profitability, providing a solid picture of how much you can expect to sink into securing a purchase.

startup sales cac

3. Monthly Recurring Revenue (MRR)

Monthly recurring revenue (MRR) is a measure of the predictable revenue your business expects to earn each month. It's one of the most essential metrics any startup needs to track. MRR informs key responsibilities like tracking rep performance, forecasting, and budgeting.

According to HubSpot Sales Director Dan Tyre, "The amount of monthly recurring revenue customers are willing to put on their credit card or pay through an invoice is the most important business metric … We judge the performance of our companies, divisions, teams, down to the individual performer based on MRR attainment. It's a foundational metric for examining team and sales rep performance."

startup sales mrr

4. Customer Lifetime Value (CLV)

Customer lifetime value (CLV) indicates the total revenue a business can reasonably expect from a single customer's account throughout their relationship with the company. The metric has a direct bearing on your revenue, and tracking it can help you improve loyalty and retention, target ideal prospects, and ultimately reduce customer acquisition costs.

startup sales clv

5. Churn Rate

Churn rate is the percentage of your customers or subscribers who end their relationships with your business during a given time period. If your startup operates on a recurring payment or subscription model, you need to consistently account for your churn rate.

Startup Sales Jobs

There's no definitive, one-size-fits-all standard for what every salesperson at every startup can expect to deal with. Professional experiences at startups will vary by factors like industry, mission, and quality of leadership. That said, some consistent themes generally pop up across most startup sales jobs.

Leadership is more personally involved with the sales org.

Obviously, the average startup is smaller than your typical established company. On top of that, starting one involves a lot of personal risk and investment from founders — so in many cases, they wind up having much more of a personal stake in how the sales org operates.

That kind of involvement has its benefits and drawbacks. On one hand, it often means salespeople can develop close relationships with founders and get a closer feel for the nature of the solution they sell as a result.

But startup founders can have specific visions for what they want out of their businesses, and they tend to set their sales processes accordingly. Also, since they have such a personal stake in their company's success, founders might have a harder time handling criticism or budging on points that could be holding the company back.

Building credibility can be an uphill battle.

Salespeople at startups also don't usually have the benefit of falling back on an established company reputation. In many cases, the prospect startup sales teams reach out to have never heard of those companies — that means they often have to be more persuasive and come off as particularly credible to set things in motion.

For startup salespeople, cold calls are a little colder. High-quality leads might be fewer and farther between. Finding the right sales messaging might be a bit more finicky than it would be otherwise. A startup's reputation is very much a work in progress, and it can be tough to breach a market as it develops clout.

Change and uncertainty tend to be facts of life.

Every startup has growing pains — the business is going to spend a while getting its bearings. Identifying and capturing the right place in your market is never totally straightforward, and leadership will likely still be figuring out how to lead the organization effectively as the company matures.

All told, startups don't have the resources and experience to bank on smooth sailing — change is a major constant at these organizations. Processes, personnel, and products are going to evolve, expand, and pivot.

As a startup salesperson, your org's sales process or messaging could change on a dime — and your responsibilities can be every bit as volatile as well. So if you want stability, joining a startup might not be in your best interest.

As I said at the beginning of this article, navigating the trials and tribulations of startup sales life can be difficult, exciting, and often unpredictable — so if you're looking for an even keel, working in startup sales won't be for you.

Still, startup sales life can be incredibly fulfilling — with rewards that match the degree of risk you incur by pursuing one of these careers. If that sounds interesting to you, consider taking a closer look at some sales positions at these kinds of companies.

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Originally published Mar 15, 2022 7:00:00 AM, updated March 15 2022

Topics:

Startup Sales