Top Common Sales Mistakes Startups Make– and How to Avoid Them

From finding a product-market fit to impressing VCs to generating cash flow, everything in your company relies on sales. You can’t afford to get it wrong. 

It’s also an expensive undertaking. For instance, the average cost of training a sales employee is $5,000. That’s just the training. Imagine the cost of running an entire sales department—those costs can quickly go through the roof. 

A seemingly simple sales mistake can do more than lose a deal—it can kill your company. So, how do you avoid all the sales mistakes and keep your company on track? 

This article will cover the eight most costly sales mistakes startups make—and help you make a plan to avoid them.  

1. Neglecting Renewals

Early-stage startup founders tend to focus on user acquisition and customer base expansion. This isn’t inherently bad, but it can create troubles in your cash flow.

How? Because when customers don’t renew, that means they are churning, and you have to keep allocating resources to acquire and onboard new customers. 

Which is, quite frankly, expensive. You’ve probably seen the stats: it costs five times more to attract a new customer than to keep an existing one.

If this sounds familiar, then your sales strategy needs revamping.

Here are suggestions on how to do that:

  • Prioritize renewals: Make renewals a priority and allocate resources accordingly. This may mean dedicating a sales or customer success team member to focus on renewals.
  • Monitor renewals: Keep track of when contracts and subscriptions are set to expire and proactively reach out to customers to discuss renewal options.
  • Focus on customer experience: Ensure customers have a positive experience with your product or service. This may involve providing excellent customer support, addressing any issues promptly, and continuously improving your product or service based on customer feedback.

Oh, and don’t forget to make sure your product actually does what you say it will. Focusing on renewals won’t help if you’re delivering a sub-par product. 

2. Forgetting About the Upsell (or Cross-sales)

Top Common Sales Mistakes Startups Make - Forgetting About the Upsell (or Cross-sales)

Another sales blunder you might be making is closing deals without upselling or cross-selling. Remember, customer needs are cyclical, and once a customer reaches a certain level in their relationship with you, they’re ripe for more options.

Enter cross-selling and upselling. Cross-selling is the practice of encouraging buyers to add complementary products to their original purchase, while upselling is encouraging customers to buy a pricier version of the product or service they’re considering. 

Let’s say someone approaches you for a data analysis service, and you ask them to also subscribe to your analytics software. That’s cross-selling.

If they are already using your analytics software alone and you encourage them to subscribe to a bigger plan that allows more team members to join, that’s upselling.

Both of these sales strategies help revenue and maximize the value of each customer. In fact, a survey conducted by HubSpot found upselling, and cross-selling can drive up to 30 percent of revenue for salespeople. 

Here are some cross-selling and upselling techniques to add to your tool belt: 

  • Understand customer needs to recommend products accordingly
  • Build a great relationship with customers
  • Recommend recently viewed products
  • Tout benefits of buying more or buying higher, and not features
  • Recommend related products
  • Don’t pressurize them

Remember, both upselling and cross-selling help maximize the value of each customer. By offering complementary products or an upgrade, you can reduce customer acquisition costs and build a strong relationship with your customers.

3. Lack of a Solid Retention Strategy

As I noted earlier, the cost of acquiring a new customer is far higher than the cost of retaining an existing one. And without a solid retention strategy in place, that’s the expense you risk incurring.

Not to mention, selling to existing customers is generally easier than selling to new ones. Research says your chances of selling to an existing customer successfully are 60-70 percent, compared to 5-20 percent for selling to a new one.

This means focusing on your retention strategy is essential to maintaining your recurring revenue and growing sustainably. Luckily, retaining customers isn’t rocket science.

Here are simple steps to ensure your customers stick around: 

  • Have a good customer support system: From omnichannel support (email, social media platforms, chatbots, etc.) to timely responses to queries, customer support is a key determinant of customer retention. Seventy-seven percent of customers say they’re more loyal to businesses that provide a good customer experience when issues arise. 
  • Use loyalty programs: Incentivize your customers to be loyal by offering loyalty programs, such as discounts, special coupons, loyalty cards, early access to new products, invitations to special events, and so on.
  • Get customer feedback: No one knows where the shoe pinches more than your customers. This is why a customer feedback loop is crucial. If you can constantly make them happy by implementing their feedback, you can keep them for a long time.

A retention strategy is about more than just keeping customers happy. It’s about building a relationship with them so that they keep coming back to your product or service. 

If you want to explore the top 15 sales strategies every startup founder should know, check out our article.

4. Not Having a Repeatable Sales process

A sales process is a set of steps a sales team follows to consistently close deals. It covers everything from prospecting, objection handling, presentations, follow-up, sales closing techniques, and even the tech stack you’ll need to succeed.

It’s a well-defined and repeatable approach that allows you to predict and measure your sales performance accurately.

Without a sales process in place, your sales team will struggle to close deals consistently—deals you can’t afford to miss.

Here are some other reasons why you need one:

  • Predictability: A repeatable sales process allows you to predict your sales performance accurately. You’ll know how many deals you’re likely to close in a given period, which gives you a clear idea of your revenue.
  • Efficiency: With a repeatable sales process, your sales team knows what to do at each stage of the sales cycle. They’ll be more efficient and effective, which means they can close deals faster and with less effort.
  • Scalability: A repeatable sales process makes it easier to scale your sales team. You can hire new salespeople and train them quickly, knowing they’ll follow the same process as the rest of the team.

Developing a repeatable sales process isn’t rocket science, but it does take time and effort. Here are some steps to follow:

  • Define your sales cycle stages: Identify the steps in your sales cycle and map out the buying process of your ideal customer profile. This might include lead generation, qualification, demo, proposal, and closing.
  • Set clear metrics: Your sales process should have clearly defined metrics that let you measure the progress of your sales teams. Win rate, sales cycle length, and lead conversion rate are some of the good metrics you can track.
  • Create a sales playbook: Develop a playbook that outlines the steps your sales team should take at each stage of the sales cycle. Include templates, scripts, and other resources that will help your team close more deals.
  • Measure and optimize: Continuously measure your sales performance and optimize your sales process based on what’s working and what’s not. Use data to identify bottlenecks and areas for improvement.

By following these steps, you’ll be well on your way to developing a repeatable sales process that will help your startup succeed.

5. Trying to Do Everything Alone

As a startup founder, you’re probably “the everything” in your company: the CEO, the sales guy, the financial manager, etc. See, I get the overwhelming feeling of not wanting to trust anyone too early.

But when you’re trying to do everything alone, you’ll make mistakes, miss opportunities, and overlook important details. This will lead to quick burnout and will badly stifle your growth—a classic case of chasing two rabbits but catching none.

So, here is what you should do instead: once you have a repeatable sales process, hire a salesperson or organization and let them focus on selling. And when you do, don’t micromanage them. 

If your company already has a solid development trajectory and cash flow, you can engage an experienced sales manager to help you document your sales process and build a strong sales team. 

This individual will be in charge of employing sales professionals, recognizing sales opportunities, fine-tuning your sales process, and so on.

6. Hiring In-house Sales too Early

While this isn’t a black-or-white situation, hiring a full-time sales team too early can be a huge mistake for your startup. Here is what I mean:

Finding, onboarding, and integrating a skilled sales team into your company takes time and enormous resources. A study by Industrial Training says companies spend up to $5000 per employee on sales training. Yet it takes 358 days for a new sales hire to get to the same performance level as experienced sales reps.

But what about their early days? How long does it take for them to fully integrate into your organization? Well, according to the Bridge Group’s 2021 Sales Development Report, it takes about three months to fully onboard and ramp up a sales rep.

You don’t have that much time.

Now you may be thinking, “But outsourcing sales could be costly.” Well, that’s relative. While the salary of sales reps may not look like a lot, there are a lot of expenses attached to having in-house sales teams.

This includes investing in tech stacks, hiring a sales manager, renting an office space, hiring and training costs, and more.

An outsourced sales firm, on the other hand, doesn’t have to charge you for any of those things separately. 

7. Relying too Heavily on Discounts and Promotions

Top Common Sales Mistakes Startups Make - Relying too Heavily on Discounts

As a small business, offering discounts to attract potential customers and generate your first sales isn’t a bad idea. But relying too heavily on this strategy can only serve you in the short term.

Here are several reasons why this strategy can be problematic:

  • It sets a precedent. If you offer discounts and promotions too frequently, customers will come to expect them. This can make it difficult to sell products at full price in the future.
  • It can erode your brand. Constantly offering discounts and promotions can make your brand seem cheap or desperate. This can be especially damaging if you’re trying to position your business as a premium or luxury brand.
  • It can hurt your profit margins. Low prices may bring business, no doubt. But offering discounts and promotions can eat into your profit margins, especially if you’re already operating on thin margins.

To learn more, you can read our article on how to say no to a customer’s discount request.

8. Not Investing in Tech Early Enough

Collecting and storing prospect data, SDR outreach, lead nurturing, live calls, sales analysis, and pre-call research are all aspects of the day-to-day activities of a salesperson.

What do you think facilitates all these things? A host of tech solutions, led by an outstanding CRM.

The average sales team uses about 10 tools to close deals. And you can’t go far without it. If you already have an in-house sales team or are in the process of assembling one, this is one investment you should make from the get-go.

Not sure where to start? Try Close, our CRM software built for growing businesses and startups. Sign up for a 14-day free trial.

Avoid These Startup Sales Mistakes to Increase Sales Productivity

Perfecting your sales process is an ongoing effort, and making mistakes is how you learn what works and what doesn’t. However, some mistakes can totally screw up your business. Those are the ones you need to avoid.

If you can avoid the sales mistakes we covered here, you’ll set your startup up for success in the long term.

Ali Faagba
Ali Faagba is a SaaS and B2B content strategist and freelance writer. He works with SaaS companies to increase traffic and user signups.

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