Starting From Scratch … Without Investors (Article #4 – The Problem Is Always Sales! … turning on the revenue)
(This is the story of Embrazio, a leather accessories company in Boulder, Colorado complete with lessons learned and a few tools and exercises all brought together for your entertainment and hopefully a bit of learning to boot. The story is told in the form of a series of articles by Embrazio founders Scott Schaefer and Stephanie Boyles who also happen to be married.)
Article #4 – The Problem Is Always Sales! … turning on the revenue
As mentioned in the end of article #3, one of Scott’s early mentors, David, was an ex-Bell Labs guy with a thick Hungarian accent. He’d left “the Labs” for entrepreneurial pastures and was now consulting with a few of us inside what we’d call an “incubator” today. It was basically a collection of start-up information tech businesses that BellSouth Corp. had set up internally to grow competitive market muscle. David constantly preached, “Scott, the problem is always sales, everything else you can fix.” What he meant of course was/is that generating sales is the most uncontrollable variable. That’s why you need to get out there early and often to “make sales happen” or figure out why they are not happening and flip that situation around fast!
Reviewing Embrazio product line with Denver Boutique Kismet
This is the 4th installment of stories associated with our journey to create and grow a leather accessories company in Boulder, Colorado. As a couple of corporate refugees in our early 50’s, we started this journey in 2012 and now have a complete line of belts, bags, jewelry, and other leather items under the brand name Embrazio carried online and in over 200 boutiques nationwide. Initial products included a curved custom leather belt and cellphone holster. We had returned from Leon, Mexico (where our products are produced) back to our Boulder HQ, we’re working on our business plan and now need to lay out a sales strategy as part of that plan.
Lesson #4 – You learn the most when you’re engaged in selling. GO SELL!
Way too many people think sales is just a matter of getting someone to buy something. That really couldn’t be farther from the truth. Sales is a process of finding someone with a need or problem that you can fill or fix and then arriving together at a point where both parties agree to an exchange of value. In reality, this is just the objective transactional result of the sales process. Whether or not you “make the sale” really depends much more upon the subjective nature of the relationship between seller and potential buyer that precedes the transaction. Simply put, does the buyer like you?
Owner Erica Brand of Six Clothing in Haddenfield, NJ, trying on Embrazio's star studded curved belt
Be Likeable
In mentoring sales classes at the University of Colorado, Scott always starts by asking students, “what’s the first lesson in selling?” They quickly refer back to their professional selling text and come up with some process answer like “targeting the right buyer” or understanding “features and benefits.” He then counters with another truism passed along by a very successful sales mentor; “people buy from people they like all other things being equal. All other things not being equal, people find a way to buy from people they like.” Simple as that. First, you must be likeable.
Finding the right target and sales channel is a journey in and of itself!
With that lesson to be likeable in mind, and given there weren’t any horse related shows or events nearby on the calendar (what we thought of as our target market), we packed up our curvy leather belts and phone holsters and set up a booth at the Louisville, Colorado street fair.
Scott selling at Louisville Street Fair
Welcome to reality. “Not fun, lots of work, very humbling, and barely breakeven” best describes this first attempt to sell beyond friends and family. Still, it was a great learning experience so we decided to look for another venue that might have a better fit re. people needing and wanting to buy belts and cell phone holsters. In other words, let’s try again somewhere else!
Off To The Races…Or, At Least The Tack Shops!
We decided to call directly on tack shops. This is where everything related to horse and rider can be found. They served the same end user, the horse rider, that we’d sold to directly as we developed out first product. We had some success with tack shops but found the size of the addressable market pretty small and the locations few and far between. We did start building a pretty good online data base of equestrians as a by-product of our horsey focus and we still use this for email and online marketing which is the subject of another article soon to come.
Maybe Motorcycles?
Hmmm, how about motorcycle riders as a target market? Surely, they would like and need our cellphone holster you can open & close with one hand.
Testing the motorcycle market
We made direct sales calls on several independently owned and operated Harley Davidson stores, successfully got some orders, and then signed up for a booth at the Colorado Motorcycle Swap Meet. This is the largest such event in the state. OMG, this was a trip. Our booth was squeezed in-between the Sons of Silence motorcycle gang and the men’s room. We fit in like a lumberjack at a meeting of the Sierra Club. While we did sell a fair amount of product, we decided feeling safe while selling was more important than expanding our target market into this segment! (Sadly, there was a mass shooting at this event just a few years later.)
Go Big … And Then Go Home!
Finally, we decided to pivot to the fashion boutique industry and signed up for a booth at shows in New York and Las Vegas. These were both large established fashion industry shows where store owners go to shop. Both shows were well attended but as a new vendor we were relegated to a tiny booth at the edge of hundreds of other booths. What buyers did come down our aisle were worn out and glassy eyed by the time they came within view of Embrazio. To make matters worse, the expense of renting and outfitting a booth plus all the travel related expenses made these clear financial losers.
Figure 5: Giving Magic a try
Lemons Into Lemonade
From an educational standpoint, however, these shows were big winners. We met several “foundational customers” that gave us invaluable guidance on what products they’d like to see us create for their boutiques. While they didn’t buy a lot from us at the show, many have stayed with us now for nearly a decade and the total lifetime sales to these long-term retail partners is well over $20k each. This experience also led us to call on stores directly rather than go to the time, effort, and huge expense of selling at shows. This finally gave us a profitable model for selling.
Since 2015, we’ve exclusively sold to stores by calling on them in person. We’ve learned to use Yelp as a qualifying tool in building a list of new and existing stores to call on in a specific city or region. For example, we leave snowy Boulder and fly into Tampa each January (I know, strategic isn’t it?) and then rent a car and spend about 10 days driving the entire state.
Is He/She A Customer Or A Customer For Life?
A big key here is viewing each new boutique we pick up as a lifetime customer versus a one-time sale. We often get re-orders over the phone from existing boutique customers and, when that happens, the cost of sale is zero. Boutique owners know their customers intimately and give us excellent advice on pricing, new colors, and tweeks to existing products. Many of the products we sell today came from ideas and guidance given us by boutique owners. They really are our partners in so many ways and we owe a lot of our success to these wonderful small business owner/operators.
Stephanie with boutique owner Dody Turner of Dody's in Pass a Grille
While we were figuring out who to sell to, and the most efficient & effective way to connect with them, we were also working on how to get online sales direct to end customers going. In other words, we were really starting to learn about our potential market and beginning to do real “marketing” at both the wholesale and retail levels. How could we narrow and focus our efforts on those potential customers most likely to buy now? That will be the focus of article #5 … Target Marketing … 4 Consultants & Panacea. We hope you’ll stay with us for that part of the journey …
Summary of Lesson #4:
- SELL NOW. Again, the best way to learn to ride a bike is by getting up on it and starting to petal. The same is true with selling. Instead of “getting everything ready and otherwise preparing to sell,” just go do it.
- 1ST RULE OF SELLING IS “BE LIKEABLE.” Don’t begin a sales call by verbally puking all of your product’s features and benefits. In fact, the less telling you’re doing, the better selling you’re doing. Establish a connection, ask open ended questions about their business and situation. Eventually, the buyer will invite you to talk about your stuff…don’t do it until you get the invite.
- KEEP DIGGING UNTIL YOU HIT A VEIN. We took you through all of the mis-steps we took in trying to find the right potential buyers and the right time and place to connect with them. Don’t give up. Keep trying different venues and customer sets until you start to get good traction.
- ONCE YOU HAVE THE WHO, FIGURE OUT THE HOW. We tried lots of different approaches to the initial conversation with a boutique owner until we honed a pitch, or more rightly an order, for moving through this first contact. It will evolve naturally as you make more and more calls and learn what does and doesn’t work.
- THINK CUSTOMER FOR LIFE VALUE. See the customer as not just in terms of the value of the first order but for the value of the orders they will give you over the life of the relationship. (for bonus points, read; “Customers For Life” by Carl Sewell)
Try this selling exercise and you’ll be surprised by the power of likeability:
We tend to like people who actively listen to us and seem genuinely interested in what we have to say. Being a great listener is an excellent place to start as you seek to become likeable to your prospect.
Go into your next selling situation with the mindset that you’re going to talk about anything you can think of that’s interesting to your prospect other than what you have to sell. Make the purpose of the meeting clear to them when setting it up or when you arrive in person but then steer the conversation to their family, details about their company or the team they manage, their last vacation, whatever. Genuinely and actively listen and ask follow-up open ended questions to show your interest. People want and love to be listened to. You’re becoming likeable and they’re starting to let go of that “oh no, I’m getting ready to be sold to” defensive feeling. At some point, the prospect will say, “hey, enough about me, let’s talk about the reason you’re here.” Good luck and have fun!