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HOW TO SELL ANYTHING

4 Keys to Get a Hesitant Customer to Buy

Face it: It's hard to get customers to buy from start-ups. Here are four pro tips to overcoming that bias.
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People are naturally scared to buy from a start-up.

But if you have any hopes of surviving as an entrepreneur, you must overcome that fear many times. How? Take four tips from a three-time entrepreneur who one of the world’s leading venture capitalists calls an “execution machine.”

He is Kleiner Perkins partner, Matt Murphy, dubbed Kempel “an execution machine” -- in the sense of getting stuff done in business.

And as Forbes wrote in May, "execution machine" also applies in the military sense. In 1992, Kempel was a commander in Sayeret Matkal, an elite Israeli military unit that was on track to assassinate Saddam Hussein at a funeral he was expected to attend in the Iraqi desert. But a training mission for that plot went disastrously wrong.

Kempel left Israel for Harvard Business School. After graduating, he started and grew a division of EMC “from zero to multi-hundred-million dollars in annual revenue.” Next, he partnered with the “technologically brilliant” Moshe Yanai to start Diligent Technologies that Kempel sold to IBM in 2008 for an estimated $200 million.

After a few years at IBM, Kempel left to start his third company, SimpliVity, which makes OmniCube, an all-in-one corporate IT appliance that replaces up to 12 IT products.

And SimpliVity’s success in getting customers -- winning at least five customers and 55 channel partners since Fall 2012 -- had Murphy singing Kempel’s praises when I interviewed him in June 2013.

First Thing's First

If you want customers to buy your start-up’s product, you have to know more about your industry than your competitors do. More specifically, you have to see how the most advanced technology can be used to create a new product that will make the lives of your customers much better.

If you want customers to buy your start-up’s product, you have to know more about your industry than your competitors do. More specifically, you have to see how the most advanced technology can be used to create a new product that will make the lives of your customers much better.

And if you can do all that in a way that will be hard for leading competitors to copy then your start-up will take share in a big market. Kempel spent over three years working with a team of experts to combine into a single appliance running on commodity hardware the functions of a dozen different corporate IT devices.

Your start-up’s ability to invent a solution to a common, unsolved customer problem will help overcome a customer’s natural fear of betting part of its business on a venture that could quickly run out of money.

Vision to Reality

To get a customer to buy your product, you must turn that vision into a prototype.

And then let a selected group of early-adopters try the prototype without taking any financial risk. If you were careful in designing and building the prototype, your customer will be pleased--he might even find a new way to use your product that you had not thought about.

A SimpliVity partner, Norwood, Mass.-based value-added service provider, CorpIT, discovered a new use for the OmniCube--boosting the profits of CorpIT’s private cloud service. CorpIT cut by 75 percent the amount of time it takes to bring on a new private cloud customer while reducing customer’s data storage and retrieval costs by 66 percent.

To turn a trier into a buyer, your start-up must provide a risk-free way to find a use for your product.

If you run a start-up, every one of the people in your organization should be a sales person. After all, a potential customer will be making judgments about whether to take a chance on your venture after every interaction with one of your people.

That means your receptionist must quickly direct each caller to the right person and your engineers and technical support staff must listen to customer’s questions and give concise detailed answers to product, design, and service inquiries. Every element of your start-up should help make it easy for customers to do business with your start-up.

CorpIT saw many reasons to buy from SimpliVity--including its financial backers (Kleiner Perkins) and employees from a successful firm CorpIT knew--EqualLogic; its use of standard product components (Dell servers and VMWare virtualization software), and its geographic proximity

To win customers, you must make every interaction with your start-up a step in the direction of closing the deal.

Finally, it helps if you have a track record of winning. Kempel’s track record helped overcome another customer’s fear. Chad Lemmer, IT Manager at Wausau Coated Products - a maker of “pressure-sensitive roll and sheet label products”, explained that SimpliVity’s “excellent investors and Kempel’s successful track record helped me overcome my concern about buying from a start-up.”

Take it from an execution machine; these four tips can be vital to your start-up’s survival

Last updated: Jul 9, 2013

PETER COHAN

Strategy consultant, startup investor, teacher, corporate speaker, pundit, and author of 11 books, Peter Cohan has invested in six startups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael E. Porter.




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