How to avoid YAGMs and make the best use of your selling time

One of the most common problems start-ups struggle with is seemingly great meetings with prospects that stay in the pipeline endlessly. Especially when founders attend meetings, meeting after meeting, with both new and existing prospects, result in sales cycles that never seem to end. At some point, the founder may get frustrated and start to blame the salespeople but the salespeople are not the root cause.?These meetings are what I call YAGMs – Yet Another Good Meeting.

It’s easy for start-ups to have YAGMs.?In the early days of a start-up, you have a different approach to a business problem, you are populated with super-smart people, charismatic people, industry experts, sometimes all of the above.?Customers are prepared to talk to you because you have something interesting to say.?Something new, something innovative, something that is worth the customer's time. The customer asks a lot of intelligent questions which further convince you they are interested, especially when they ask if the product does a thing and you state it doesn’t but it could. Now the customer seems more interested.?You leave the meeting convinced that if only you go and build that thing they will become a customer.?

A material cause of YAGMs is founders often feel more is more.?It is twice as good to talk to ten customers than five, and at least four times better to talk to twenty.?Being busy in a start-up feels like a substitute for money.?But it’s not.?You are meeting customers because you want to build a business, to build a business you will need money from customers, and now is better than later.

The solution to YAGMs is to ask the dollar question.?The dollar question is seemingly simple but often too hard for start-ups, especially founders. The question is, “If the product were a Dollar/Euro/Pound/etc, would you buy it today?”?Sometimes you have to follow-up with, “I am not saying it’s a dollar, but if it was, what would you do?”. The reason it is so hard to ask is it is a closed question, it may get a “No”, so if you don’t ask it, you get what feels like a "Yes".

Steve Blank in his book “Four steps to the Epiphany”, which is a great book, suggests a similar approach, but this is a subtle difference. Steve suggests offering the product for free, but I have tried both ways and you get a different reaction when you ask for money. When asking “Would you take this if the product was free?”, if the response is negative; the customer would not use the product even if free, the answer is typically about the features and people try to let you down easily.?The business equivalent of the break-up standard of; “It’s not you, it’s me.”??The customer lists reasons why it does not fit their requirements at this time but may do so in future. This completely distracts you as you do not truly find out what the real business objections are, worse you believe it is a timing issue and if you just go off and build the right feature set they will buy.?

When you ask a prospect to part with money, even a tiny amount, you hear very different answers.?The customer replies with a list that may include reasons as wide-ranging as “We don’t buy from small vendors”, “We are reducing the number of vendors we have”, “We can’t get approval for any products at this time”, “I have a vendor that already offers something like this”, "We only buy CRM products from Salesforce".?By opening the line of questioning about money, you uncover if they are prepared to do business with you. If they won’t give you a dollar, they aren’t a prospect.?If they aren’t a prospect; you should be spending your time elsewhere. This simple question stops YAGMs in their tracks.?

In any start-up it is easy to not understand that your most valuable commodity isn’t cash, it’s time. You need to use your time effectively to achieve your goals. According to the Ehrenberg-Bass Institute’s Professor John Dawes, only 5% of the TAM are looking to buy your product in any given Quarter, it is essential you only spend time with those who are most likely to be in that 5%.

This approach isn’t just for start-ups.?I have run mature sales teams with AEs having great meeting after great meeting without understanding if the customer can do business with us. Please note, this is not part of the old school qualification process to understand budget.?That’s the subject of another post, according to Gartner research more than half of prospects don’t have a budget when they start talking to you, so there is no point trying to understand how much it is, the point of the dollar question is to remove payment from the equation and make certain you are talking to the customer about how they would do business with you, and if they won’t, why they won’t.