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Why sales is all about creating customer value with Spark Loop's Louis Nicholls

Episode #

11

Show Notes

In this episode we’re joined by Louis Nicholls. Louis is the founder of Sales for Founders, SparkLoop and several successfully exited companies. He’s also the author of the Social Proof Handbook. We discussed:

- The importance of understanding your customers goals
- Creating shared success plans for customers
- Why sales calls are the fastest way to learn about your early customers

Resources
- Sales for Founders
- Sales Survival Guide

Reaching out to Louis
- Follow Louis on Twitter
- Check out SparkLoop
- Email louis@salesforfounders.com

Episode Transcript

Stuart
Hello, and welcome to the Customer Conversations Podcast today. I'm excited to be joined by Louis Nicholls. Louis is the founder of Sales For Founders, SparkLoop, and several other successfully exited companies. He's also the author of The Social Proof Handbook and spends much of his time helping other founders succeed. Louis, thanks so much for joining me.

Louis
Thanks for having me. It's great to be here.

Stuart
Of course. I'm excited to dive into a whole bunch of topics around, how founders and how marketers can engage with their customers, and talk to their customers to see better results. But maybe we could start out, if you could update those people who don't know you, about what you're working on at the moment?

Louis
Yes, I'm happy to do that. So, I'll be quick because it's something that gets confusing if I spend too much time on it. So, I would say at the moment I'm doing basically three things. On the one hand, I run a course teaching very early stage founders just enough sales to get their first customers and grow from wherever they are. Up to about 10K in monthly recurring revenue. The main thing I'm working on at the moment, is actually a small software as a service tool called SparkLoop. Which is a referral program tool for newsletters. So, if you have a newsletter and you want to grow faster, we have a little plugin that makes that really easy to set up. Then, the third thing I do is consulting around CRO, conversion rate optimization. Focusing mainly on social proof and we can get into that as well, but that's mainly for the slightly larger companies.

Stuart
Gotcha. I think a place it'd be really great to start, is with the Sales Founders course and the work that you do there. I'm really curious to dive into, why it's so important for founders to think about selling first? Or if not, the very first thing they do at least very early and much earlier than many may think of doing sales. When they're building a new product or working on a new project.

Louis
Right, okay. So, maybe a great place to start there, is to think about what the difference is between sales and marketing. Because, I know a lot of people like to start off with marketing. This isn't the textbook definition by any means. But, the way that I teach founders to think about the difference between sales and marketing, and the way that I think about it in my head is that. Sales, is what you do when you want to get new customers, but you don't have all of the information you need to be able to make them buy. So, if you think about it as a flow of information, when you're doing sales. That is when the information or the flow of information is mainly from your customer to you, teaching you how sell to them. They have all of the information necessary, you're just asking questions and teasing it out, and setting them on a plan. Which, obviously in the early stages of a business is what you need to do. Because, you don't know enough about your customers and their objections, everything, to be able to sell to them yet.

Louis
Whereas marketing, is then the opposite. That is something you can do when you have all of the information you need for someone to buy and all you have to do is to get that information to them in the right order. You don't need anything from them to be able to make the sale.

Stuart
Interesting, because at least from my experience, this is not typically how the sales process works, right? In that, the flow of information is often the opposite way around. You book a demo, on the demo maybe it's all about the product or about the company rather than all about me as a customer, or as a consumer. So, what are some of the steps that a founder can take or somebody who's doing doing sales can take. To really help drive that conversation in a way that is, like you say, more focused on collecting information from the prospect?

Louis
Right. Yeah, I get that. But, if you have all the information that you need. For example, you can do a demo and all that kind of stuff, and you don't need any information from the lead, from the potential customer. Then, doing sales is a really inefficient way of making that sale. Because, you have to spend so much time talking to them. It doesn't scale very well, it's expensive to hire someone to do that. So, where possible people do want to avoid doing sales. So, I think if you get on a demo call, it may feel like you're being pushed information. But actually, the reason you're on that call is, because they're trying to get some information from you. That they need to be able to sell to you, right?

Stuart
This is an interesting point for me specifically is. Is there a difference between customer research and asking questions purely for the purpose of understanding customers? So, that you can make decisions and the sales context of that. Which sounds like maybe there isn't a lot of difference, if the goal of sales is to collect information from your customers. So, you'll know how to sell better to them and close them.

Louis
Yeah. I don't think there is a massive amount of difference. Sales obviously is a bit broader, right? After you've done the discovery phase, you then carry on and actually nudge them through to where they want to get to. But, I would see customer discovery as being, working out where your customer is now and what's important to them, working out where they want to get to. Then the sales part is basically, working out how to get them from where they are now. To where they want to get to and nudging them along that path basically.

Stuart
So, to bring this back to the distinction between marketing and sales is that. In both cases, you're trying to close the gap between where they are now and where they want to get to. But in sales, you need to collect information from them to do that. But, with marketing that's not the case, you already have the information you need to close that gap without sales. Is that-

Louis
Yeah, exactly. When you look at companies that do a mix of marketing and sales, they'll tend to do sales for the slightly bigger accounts. A, because they can afford to and B, because they will have more specific needs that you can't fit into a catchall marketing approach, right? They will have different people involved, they'll have very specific objections around how security is handled and stuff like that. So, because you can't push information for them, you need to pull it back. So, you still have to do sales for them.

Stuart
Got it, that totally makes sense. So, where would you put these activities? The sales process typically involves getting on the phone with somebody, having conversations to understand their needs and where they're trying to get to. Where would you prioritize that against and specifically for a new founder? Or maybe it could even be a larger company that doesn't have all the information. Like you said, the case of larger accounts. Where would you put that in prioritization or in priority order against other things that founders are typically doing when they're getting started? Like building a landing page or starting on their MVP, try and take steps. There's plenty of things that a founder can be doing early on. Where would you put these sales conversations in that list?

Louis
Yeah. The way I like to think about this, is all about minimizing risk. So, identifying what is the biggest risk to me as a business? What is the biggest unknown that I have at the moment? And working out how to solve that first. So when it comes to, for example, developing product. I would normally want to do at least some sales first, because otherwise how are you going to know what you should be building for example, right? So, I do tend to start off with sales and at the beginning it is really for me customer discovery, and sales is synonymous. It's just, if you're doing customer discovery well, and you find someone who wants to buy. Then, you may as well carry on throughout the sales process there's no point stopping there. When the conversation starts to go into the direction of money, then people start to be much more honest and much more upfront with their objections, and what they really think.

They're not necessarily trying to trick you, they just maybe haven't thought it through that far until they're being asked to take their credit card out. So, I like to do customer discovery just the same as sales.

Stuart
Got it. Yeah, that totally makes sense. You've mentioned one word a couple of times there, which I think is important. I would love to dive into a little bit deeper, but understanding objections. Something you've come up a couple of times and I think it's interesting. Because, maybe it's something that isn't talked about a whole lot. People typically talk about the other side of the coin, right? What's the value of you're trying to get? What's the end state, right? Rather than necessarily the objections that you have to... It's a little different than say the actual problem that your product is solving. But, what are the things that make people not buy your solution? Right? I'm curious how you think about objections and how you suggest that people handle objections that come up during the sales/discovery process. Because, there's a number of different ways that you can handle them. I'm curious to get your take on that.

Louis
Sure. So, the way I think about it is, I do tend to start off with the value. So, what I'll look at there is, where is the customer already? Where are they losing money or time or whatever it is? What is their goals? Where's the end state? The actual value we aim to provide? A quantifiable value, right? That is the core of the sales process for me, is working that out. Because, you do need to have that value at the end of the day, to be able to make the sale. Especially, if you're doing software as a service where they're paying monthly. You want to keep them around, there's no point in making a sale for one month or two months, it's going to cost more to get them on board. The second thing from there, that I move on from pain and value is actually to fears and dreams. Which is, the emotional things that they're thinking about and worrying about.

Which it's not the reason they're going to stick around. It's not the actual way that you provide value, but it's the way that they lock in on the value. If that makes sense? Its why they think they're buying. Fears is, what are they worried about that could happen? For example, if they don't get this value, or if the pain carries on being there. Dreams obviously, what are the amazing things that will happen in their life? What are the amazing changes that will happen in their life, if they do get this value and they do solve this problem? So, I like to lock in that stuff first because that's, what's going to make the sale happen, that's what moves you forward. In terms of handling the objections, what I like to do and what I like founders to do. I think is the most successful approach that I've seen so far. Is actually to work together with the customer or the potential customer at that point.

To create something called a success plan, a shared plan of success, where you basically say, "Look, here's where we are now with the fears and the pain. Here's where we're trying to go to, with the value, to get you to this dream. What do we have to do in between to make that happen? Who's responsible for it? What's the timeline?" Really put that together step-by-step. So, what you're doing is you're not negotiating against the customer. You're aligning your values, you're creating a win-win situation with the customer and saying, "Okay now, we are basically a team. We are trying to get you to this place that you want to get to, what hurdles are we going to have to cross to get you there?" When you start planning back from that amazing place they want to be. Then it's very easy for them to say, "Oh yes, this person needs to get involved. I'm not sure that my boss is going to go for it.

Or we have this CRM system that doesn't have a very good integration and we need to be able to work with that. So, will we be able to integrate there?" Stuff like that, all those objections that could come up.

Stuart
Got it. This is all presale, right? This is in this discovery process, as you're feeling things out, am I right in that sense? Or if not accurately, that is where the success plan comes into play? Rather than post-sale as part of an onboarding or first 90 days with your account manager or that kind of stuff. This is all pre sale?

Louis
I'd like to think of this as presale, yeah. It's interesting, because we're talking here mainly about earliest stage sales rates. So, when you get into a team of sales, then you suddenly go into that, probably you follow the predictable revenue model. Where you have an SDR and an AE, and everything and that's great, and that works when you're trying to scale it. I'm thinking especially around SaaS, where really in my opinion I don't go for closing a deal. I think of sales as being done and if you look in my CRM, my sales pipeline or funnel or whatever you want to call. Finishes with the customer, not being won, but the customer being happy and retained. So, I think of sales not really finishing until they get to that moment where they're definitely not going to churn.

Stuart
Right. That's literally interesting and I think I haven't heard it put that way before. Although, that's certainly from a production growth perspective, that's how I would think about it, right? I had Kristen LaFrance on the podcast a couple of weeks ago. She talks about the retention based acquisition, which sounds like a similar concept here, right? It's almost pointless acquiring a customer if you can't make them a successful customer. For a whole bunch of reasons.

Louis
It's absolutely completely useless, it's counterproductive. You lose a decent customer who could have come on board, you waste a load of time and money getting them on board. They're going to go out and tell other people, that you weren't that great or you weren't a good fit. So, it's an absolute waste of time. That's also, when I talk to founders, especially technical founders. They have this real mindset of sales as negotiating and winning against the customer, and being sleazy. It's definitely not, especially in SaaS. You can't do that, because you'll just end up with a load of customers who churn in the first month and a load of wasted time, and money. So, I think if you're doing SaaS sales, well, especially early stage. Then you are really providing value to your customer in a way that probably wasn't the same way, definitely 30, 40 years ago, for sure.

Stuart
Right, if the goal is to make all the people who become customers successful. How do you handle the case where an objection comes up or something comes up as you're putting their success plan together? That, it's going to be very difficult for you to make that person or that company successful. So, how do you handle a disqualification? For lack of a better term. Because I'm assuming here, maybe I'm wrong on this. But I'm assuming that you can't make everybody successful, who you potentially are talking to during the sales process.

Louis
Yes, of course. I like to separate objections, which are objections from qualification, if that makes sense? So, I try and qualify the lead a bit earlier, and we'll have a very simple form of qualification in the early stages. Then, when you get on a sales call, the first call or the first part of the call is basically qualification, right? So, do you need this? Will you get value out of this? Are you using software that will allow you to work with us? Those simple things that you'll learn in time, they don't come up necessarily as objections. Because, an objection to me is by definition, something that you can overcome. Whereas a disqualification is something that you just can't overcome, right? So for example, there is something that means, we think you're going to get value out of this product, but you're just not going to. There's no way to catch this necessarily in the planning process. By doing a success plan, you can catch it a bit earlier and a bit more often, which is great.

Especially, if you're selling to people where it takes months to sell to them, instead of days or weeks, right? But at the end of the day, I think when it does come to those people who just aren't a good fit and you didn't catch them. Especially in the early stage, founders get really shocked and unhappy, and they feel really bad when that happens. When they have a lead, who they think is going to be amazing. But, it turns out after putting in work, that they're just not going to be a good fit. They get really downtrodden by that and what I always try and remind people is that. At the end of the day, sales is to a certain extent a numbers game and it isn't about getting that one customer on board when they wouldn't have been a good fit. It's about recognizing why they weren't a good fit, knowing exactly why and being able to adapt your qualification process.

So, the way that you reach out to customers, the very early stages and the way that you filter them, and walk them through. To be able to recognize that next time, which is important.

Stuart
Yeah, absolutely. So I'm curious, what process do you build around doing that? In the work that I do, customer research and customer discovery. For the company whose identifying objections and those qualification criteria almost. They go beyond demographic traits, isn't it really helpful for companies? I'm curious how do you document that? How do you build that feedback loop to help ensure that you're optimizing your time spent? To make sure you're working with the best prospects?

Louis
That's a good question. I think it changes obviously, depending on how your sales process works and how many different of customer you have. Based on segments and jobs to be done, and all that kind of stuff. I don't know that I have an amazing answer for this other than simply. If it's objections, I keep them in a sheet separate, in my CRM attached to the individual lead. But also in a separate sheet, that I can look back to and see. What worked as an answer and what didn't, and just see how often you need that. Especially, if you're going to go for a more marketing based approach later, you know that's gold, right? That's stuff you can use in your marketing funnel, it's free marketing advice from your customers in that sense. Even though you didn't make the sale, that's fine. When it comes to the qualification side of things and just working that out. I think it is just time, you can't catch everything, there are always going to be edge cases.

That means that someone isn't a good fit, it doesn't work for them. The important thing is just to document that and record it, and adapt your sales process accordingly. Because, if it's a qualification thing, there's nothing you can do to overcome that. It's just about making sure that you recognize what it was so that you change it next time. Because, it can come up at any time, right? It can come up in the first two minutes of a call, it can come up three months into them being a customer in some cases. I don't know there's an amazing way, that I've seen to do that. Other than just to make sure you, you track it.

Stuart
Right. Yeah. I guess over time, as you get more of the same challenges come up, maybe you start to be able to identify patterns. That you can address in different places in the funnels, so to speak. Documentation is certainly something I know, I think it's [inaudible 00:21:03]. He has written about this from a... Like you said, it's free marketing advice from your customers and know the things that were stopping them being successful. I think it's [inaudible 00:21:19] who's advocated for actively documenting those things, as you're learning them so that you can reuse them again in copy.

Louis
Yeah. One thing I wanted to add there, that I didn't talk about that I should have done, is obviously. When you have people who seem like they're perfectly qualified, and then there's one small thing that means that, they're not. That should also be something that you then take to the product team as well. Because, if that's happening a lot, then it can be the case that. That would be a natural product progression to be able to include those people as well. I didn't think about it in that sense, I was thinking just in terms of refining your funnel or your growth loop. But, that is a source of ideas and next steps for the product as well that you should probably get down.

Stuart
Yeah. I think that brings up an interesting question, especially for early stage founders or at early products. There's also a place to new features as well, not necessarily entire products. But, at what stage do you handle objections? Or do you handle objections with product changes, right? As a product person who can advocate for saying no a lot and being very intentional about committing product venture and time, to the problems that you solve. But, at what point do you think it makes sense to start to build new things? That are handling objections or to help close customers, right? Where's the line between, this is somebody who we thought was a good lead? Who we lost because we didn't have the thing that they asked for? Or are we just okay with losing that? I know that's maybe a slightly biased question in that potentially, that's not the best way to think about it.

Louis
Yeah. It's so case specific, right? I think you definitely want to be logging their stuff and you definitely want to be following up. Especially in the early days, if you're seeing a repeat pattern of people coming. Like I said, an objection for me is something that by definition you don't need to build something to get around it. It's just something that you haven't answered well enough in the sales process so far, right? It's something that can be overcome just by basically doing sales better and talking, and creating a plan, and walking them through it. If they really need something to be able to use your product. Or if they need something to make your product a better fit for them than someone else's product like competitor. Then, you have to take that to your product team and look at, what other things are on the roadmap? What takes priority? Especially in the early days, if I see someone who really wants something, I will sit down with them and set a plan.

So, then using that and look at the roadmap, and look at them being serious, and ideally getting their credit cards on file, and stuff like that. Then, I would go out to other people who are similar to them. So, having identified what makes them need that. I would go out to other potential customers and see if I can get at least a couple who said the same thing. If that happens, then I can move it up the priority list. But, there are so many edge cases, right? What if it it's one small thing? But, that customer would just be such an amazing source of social proof, of testimonials. Then maybe you do it anyway, even though it wouldn't make sense to do it for someone else. It's really difficult to say.

Stuart
Right? Yeah, that totally makes sense. So, for a founder who is not necessarily thinking about sales in this way. That there's such a large discovery component to it. What's the the first place that you would suggest people start? In terms of thinking along these lines to help them, close their first customers? Or get to that as 10K MR number that you mentioned earlier?

Louis
That's quite a vague question. Where are they starting from? Are we talking about someone who has a product and a customer or two? Or are we talking about someone who has nothing?

Stuart
Yeah, let's say this the founder has an MVP out in the world. They have a first version of their product that people can use. They maybe have a couple of early customers who are maybe friends or people that they knew. That, they're trying to close the first cold people, so to speak, who don't have a direct connection to them.

Louis
Right. I think the first thing that I would do, and the first thing I did when I sit down with founders who are in that position. Is just to look at the way that you're doing sales at the moment. What you're already trying to do and to work out which part is the part that is failing most. So, are you having the hardest time finding potential customers to reach out to? Then, if that's the case, then you diagnose what is the reason for that? Are you finding it relatively easy to find people who you think would be good fits? But, they're not replying to your outreach for example? That's something you can diagnose. Are you finding it easy to get those people to respond? But, they're not buying for some reason or whatever it is, right? Those are the three main ones. I think being able to diagnose the reason why, is the hard part. If you can diagnose where it's going wrong and why it's going wrong. Then it's normally in sales, really obvious without any experience what the actual solution would be.

Stuart
Right. I remember listening to your IndieHackers podcast episode and I think this was my biggest takeaway. Which is essentially what you just said there, which is. Most people's biggest problem is not actually solving the problem itself. It's knowing which problem they actually have, that they need to solve. Is there anything more sophisticated about identifying that? Than just taking a step back and actively looking at all the different steps, and all the different activities that you're you're doing? Or is there a framework around that you would use?

Louis
Not around that entire process, not really. I spend a lot of time in the course, not that I want to plug the course back, I'm trying to think. I spent a lot of time doing what took me such a long time to get the course actually set up and working. Is basically, trying to map out all of the different reasons and possible problems that could be the cause of some symptoms. That you're seeing at each stage and then to work out what to do, and to work out if that is the case, and then to go and fix it. That's not very helpful for people who aren't in the course. So, I don't want [inaudible 00:28:37] run about that. There are only a few stages where something could be going wrong, right? So, the first thing is just to look at what is going wrong in the first place. Then the second thing is, if you know where it's hurting basically, and you're not quite sure why.

Then there are only a few factors that it could be in most cases and I think you just need to run through them. Basically I think of it in order of, "Okay, first, what is the easiest for you to work out?" Right? So in most cases, it's not very easy to become significantly better at copywriting. For example, if your cold emails aren't working. But, it is very easy to work out if you're actually sending emails to the right people at all. So, that would be the first place I would press and see if it's that. This is one of those things where I would definitely say, there are founders who've done sales before. Especially people who are in the same industry, as you. Most founders are very happy to spend half an hour on a call with you and just give you some advice, and some feedback. I think that specific feedback is the thing that is really worth getting.

Stuart
Gotcha. Cool, this has been really great. So, I know you mentioned the no one to plug the course. But, I'll ask you the question directly. Where should people go to learn more about you and if they have questions following listening to this? Where should they go to learn more about you and follow your work online?

Louis
I'm putting together what should have been launched just by now or will be coming out in the next couple of days. A free course on the basics, the fundamentals of sales, which anyone can go and sign up for. It's all you need to know about the very basics of sales, to find your first customers in about 90 minutes of content and that is over at salesforfounders.com. Otherwise, I am very happy to talk to people. Like you said, I'm pretty active on Twitter and I love helping founders, and just chatting in general. So, feel free to follow me or reach out @louienicholls and then an underscore at the end on twitter. Otherwise, email louis@saleswithfounders.com.

Stuart
Great. We'll link all those things up in the show notes. Thanks so much for doing this.

Louis
Awesome, great to be here. Thanks for having me.

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