I’ll be honest...I LOVE Shark Tank. If I’m watching television, it’s probably Shark Tank. I’m not sure exactly what it is about the show that gets me hooked (besides Mark Cuban; that guy’s awesome), but it’s seriously addicting. For those of you who have never seen the show, I’ll pause for a second and explain what it’s all about.
Entrepreneurs from all over the country volunteer to step into the Shark Tank to face five "Sharks," who just so happen to be successful business executive investors with a whole lot of money.
There are six total Sharks who rotate throughout episodes, and they all have their strengths in different areas of business. In basic words, the Sharks consider offers and listen to pitches from entrepreneurs and small business owners who are seeking funding for their business, products, or services to bring them to the next level. The Sharks might invest, or they might not. That’s the exciting risk of being in the tank.
In addition to the unscripted drama and innovative inventions, there are so many great business lessons to take away from every episode.
It’s a fun way to really learn the fundamentals of starting and running a business. With that said, I’ve highlighted eight of the biggest lessons I’ve learned just from watching the show and listening to the expert words of the Sharks.
These tips are easy for anyone to apply to any business: big or small, new or old. In fact, if you’re not yet addressing these things, you should definitely start.
1. Be Unique With Your Pitch
First thing’s first: NEVER start your sales pitch with, “Our product is the best because…” You will be ignored and forgotten about instantly. As Kevin O’Leary always says, “You’re dead to me.”
The traditional sales pitch has evolved quite a bit over time, and in today’s world of marketing and selling, people don’t want to know that your product is the best; they want to know what it’s going to do for them. With that said, make sure your sales pitch is very well thought-out. The following elements are key to a successful sales pitch:
Be honest with your prospect. Lying will get you into a bunch of trouble right from the start. Tell them the truth about everything, and if they don’t buy your product or service, ask them for their feedback. You’d be surprised what you can take away from someone who is not interested in buying from you.
Use facts and statistics. If you’ve done your research (and you should have) present it in a positive way. Just make sure the information you’re giving resonates with the prospect’s pain points and isn’t irrelevant to their situation.
List the benefits, not the features. People don’t care that you invented a car that can fly. They care that it will help them avoid that daily hour of traffic they always get stuck in. And if you have multiple types of prospects, make sure you know the different benefits for each.
Connect with your prospect. Robert Herjavec gave some great advice when he said, “Buying and selling are not rational decisions; they’re emotional decisions. And anytime you can appeal to someone on an emotional level and make a connection, you’re halfway there.”
Be ready to deal with objections. Prepare for some common objections you may receive. Great salespeople love responding to objections.
If you remember and practice this small handful of elements, you’ll be much more prepared during your next sales meeting with a prospect. However, if you’re well-versed in inbound marketing, you already know that some of the best sales pitches aren’t sales pitches at all. Sometimes, all it takes is one very well-written blog article or the proper search engine optimization to attract the perfect prospect and have them asking you to do business with them.
2. Know Your Numbers (All of Them!)
This one is super important. You need to know all of your business numbers for a bunch of different reasons. Make sure you know your company’s revenue, revenue projections, customer acquisition cost, valuation, the cost and price of your product or service (for both retail and wholesale, if applicable), cash flow, accounts payable and receivable, return on investment, margins, profits, and then of course there are all your inbound metrics...okay, I’ll shut up now. I can list another 20 things, but you get the point.
So why is this so important? Because people lie, and numbers never do.
Your numbers are important in the sales process: if you have great numbers, you can use these to your advantage.
Your numbers are important in the marketing process: find out what part of your marketing is doing best, and keep doing it. See what’s not doing so great, and find a way to make it better.
Your numbers are important to understanding business growth: by creating projections and goals, and then reacting to the outcomes, you can make a better business plan.
Remember, without data, you’re just another person with an opinion.
3. Make Sure Your Business Goals are SMART
This one is an easy one. Well, unless you don’t have any goals at all. Then you should really set some time aside and create them. But let’s assume you do have business goals. They should be specific, measurable, attainable, realistic, and timely.
I remember an episode of Shark Tank where a girl came in telling the Sharks that her product had brought in $90,000 that year. When they asked her for her projection or revenue goal for the next year, she told them it was $2 million. And they looked at her like she had two heads. Because that’s not realistic.
It’s great to have goals for two, three, and even ten years out. I actually recommend it. But make sure they are SMART, and make sure you have a plan and strategy in place to achieve each goal. Take it one quarter at a time, and adjust when necessary. Record your important metrics, and use them to set new goals in the future. If you need some more advice on getting started with creating your SMART goals, our CEO, Bob, wrote a great article here to help.
4. Know Your Target Audience
You can’t target everyone. Although that would create a huge market, it just doesn’t work like that. Developing your personas is one of the most important -- if not THE most important -- tactics in beginning your marketing strategy. Everything you put into your marketing, from creating content to designing your website to knowing when to post on social media sites, is dependent on your target audience. Having documented personas will help you with every stage of the inbound marketing methodology.
Not everyone is the same, and not everyone has the same pain points. When developing your personas, it’s really important to touch on their demographics, their purchasing process and decision, their online actions, their challenges, where they get their information, which social media sites they use, and much more. Doing a deep dive into each persona you develop can really help you when it comes time to create a piece of content or even decide on which campaign you should launch. By targeting the right people in the right way, you will increase the amount of qualified visitors and leads, therefore eliminating guesswork and wasted time, and increasing customers and sales.
Once your personas are finalized, make sure everyone in your entire company knows who they are, so that they can leverage the information with every business decision they make. And remember, personas never have to be “done.” It’s a good idea to check in every once in a while and make changes or updates to them as they change in real life. In the wise words of Daymond John, “When you sell a product or service, you’re making a promise to your audience. If you don’t understand your audience, you’ll never be able to keep that promise, and you’ll ultimately let them down.”
5. Have a Competitive Advantage with Proper Protection
I’ll start this one off with a quote by Lori Greiner. “Often when a company is successful, a competitor will try to knock off the idea or replicate the business model.” Obviously, you do not want this to happen to you. You’ve worked extremely hard to get to where you are, so protect your company and create some kind of competitive advantage. Make your product or service unique so that people want YOURS over someone else’s.
For some businesses, protection may not be essential. But for others, there are three main ways to protect what’s proprietary:
Patent. This excludes others from “making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States.” There are three types of patents: utility, design, and plant.
Trademark. This protects a brand or “word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.” For protecting a service, you’d use a Service Mark.
Copyright. This protects “works of authorship, such as writings, music, and works of art that have been tangibly expressed.”
As a quick side note, in addition to protecting your product or service, don’t forget about protecting your company with the right insurance. If you haven’t already done so, do your research on the different types: general liability, professional liability, product liability, and property. It’s better to be safe than sorry.
6. Solve a Problem or Reduce Costs
Does your product or service solve a problem? Does it reduce costs? What is its purpose? Going back to point number one, know how it’s going to resolve your prospect’s pain points. Focus on the benefits, not the features. And again, if you have more than one persona, know the specific benefits for each one.
People want better, faster, and smarter ways to do things, and they are constantly looking for these solutions. Make your product or service one that the consumer needs, not just one that they may want. A lot of this happens in the sales process. If your prospect is not aware of the problem you’re trying to solve for them, then they won’t have any interest in it. Make them aware. Create the need, and leverage the uniqueness of what you have to offer.
But then there’s also those things we call competitors. Make sure you know everything you can about their organizational processes. Be able to compare the benefits of your product or service with your competitors’. Ask yourself, “If my ideal prospect is already buying from my competitor, what can I do that will make them want to switch to buying from me?” By executing this comparison, you’re creating awareness and being honest with yourself which, in the end, will bring you further in the competitive game called Business.
7. Always Listen, but Don’t Always Give In
I can’t tell you how many times I’ve seen someone walk into the Shark Tank and become so desperate that they’d give in to anything. Once they start to realize that the Sharks are not interested in investing, they will do anything to get back in the game.
Here's an example:
Shark: I’m not quite sure why you haven’t taken this product into big box stores yet. I see a big market there. Entrepreneur: I would love to do that. If you think that’s the right thing to do, then let’s do it together. Shark: But see, that’s why I don’t want to do business with you. You don’t know what you want. You just want me to tell you what to do. You need to have a plan and defend it with sensible reasoning.
It’s like the old adage, “If someone told you to jump off a bridge, would you do it?” You should always listen to great advice, and you should always consider it. But you don’t always have to follow it if you don’t think it’s the right thing to do. Be strong, stand your ground, and stick to your core values. The final decision is always up to you.
8. Have Marketing, Sales, & Distribution Strategies...and Prove They Work
Do you have documented strategies for marketing, sales, and distribution? Is everyone in the organization familiar with them? If you said ‘no’ to either one of these questions, you may want to start thinking about how you can get to a place where you can continuously test and recreate your strategies to improve them time and time again.
After all, there are multiple ways you can market your business, sell your product or service, and distribute it to the consumer. You need to know what works best for your specific situation, and the only way to do that is to test. According to Barbara Corcoran, “You don’t know the formula until you get out in real life and test it.”
Another important thing to keep in mind: what might have worked for your organization at one time, may not work now. Consider the difference between traditional, offline marketing and inbound marketing. Although traditional marketing is still effective today, inbound marketing has shown its true colors through amenable prospect and customer engagement and the easy ability to track and measure its effectiveness.
Again, it’s all about testing the waters and finding what works best for your company. You’ll know what works best when you begin to receive happy customer testimonials and a huge increase in sales.
Now that I’ve shared these eight big business lessons taught to me by six successful Sharks on television, it’s your job to go out and implement them as they apply to your organization. Come up with great ideas, test them, update your personas and strategies, better your sales and marketing processes, and grow your business. Taking risks and learning what’s best for the company is part of becoming successful.
And don’t forget to do what Mark Cuban always does before any big decision: simply ask yourself, “When I’m 90, will I smile when I think back, or will I frown and regret not having done it?” Let’s hope you’ll be smiling.
Oh, and go watch some Shark Tank.
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