While the average Shark Tank viewer may watch for entertainment value, the hit ABC show also provides an education on how to successfully sell your product to high-proﬁle prospects. With over 20 million dollars invested in 109 companies, Shark Tank can teach us a lot about sales. Back in November, we published a post called “The 5 Most Successful Shark Tank Deals And What You Can Learn From Them.” The post has been wildly popular, so we knew this was a topic we wanted to explore deeper. We created a 20-page ebook on the topic to do just that. In the ebook, we take 5 of the most lucrative and successful deals from the show and analyze why we think they were so successful. We hope you can take away some of the lessons from this ebook and apply them to your own selling practice or business.
In this post, we’re sharing some of the lessons we learned from Talbott Teas, a line of designer whole-leaf teas, who asked for $250,000 in return for 20% equity in their company on the show. They eventually partnered with Kevin O’Leary who invested $250,000 for 35% equity in their business. In 2012, Talbott Teas was purchased by Jamba Juice for an undisclosed amount. Pretty cool success story, right? Let’s “dive” in and discuss what Talbott Teas can teach us about selling.
Real passion and loyalty for a product is a salesperson’s number one asset.
When you’re trying to convince someone that what you have is worth their money, they can’t just believe in the product, they have to believe in you.
When Shane Talbott and Steve Nakisher, the founders of Talbott Teas, pitched their designer beverage company on Shark Tank, they already had an amazing product. The company had increased from $100,000 to over $500,000 in sales over three years, with 50% profit margins. The Shark Tank investors loved the idea and the numbers, but were still reluctant to invest, citing business conflicts or lack of personal interest in the product. Those who didn’t bow out immediately kept asking questions, and the real tipping point came when the Talbott and Nakisher revealed that they had invested $300,000 of their own money in the company. Even Mark Cuban’s eyes widened when they said that, and what he said next was the most telling analysis in the whole episode: “So you guys…, you believe!”
The fact that Talbott and Nakisher had personally invested so much in their company made it clear that they were in it for the long haul. They knew they could take the company all the way themselves, and they were able to prove that to their potential investors. In the end, Kevin O’Leary offered to invest the $250,000 the Talbott Teas founders were looking for, but only for a whopping 40% stake in the company; twice what the founders had offered. O’Leary is known for rarely changing his offers after they’re on the table, but in this case he ended up reducing his equity requirement by 5%. His reason? “‘cause I really like you guys.”
The Talbott Teas founders took the deal, and eventually sold their company to Jamba Juice for an undisclosed amount, in a deal that never could have happened if Talbott and Nakisher hadn’t been able to go beyond business metrics and prove that they were 100% personally invested in the product, and had deep enough domain expertise to see it through.
If you need more evidence that investors will buy into a person just as much as an idea, look no further than Shark Tank episode 302 and Steve Gadlin’s hilarious business, I Want To Draw A Cat For You.
Gadlin set himself apart from the crowd instantly with a literal song and dance. Though his musical business pitch was whimsical, Gadlin clearly knew how to sell himself. When potential investor Robert Herjavec asked how the business could go from $9,000 to $100,000 in sales, Gadlin answered,
“By working with me on this, you’re partnering with one of the most creative minds, period. I strike gold in very unpredictable ways.”
Repeatedly during his pitch to the Sharks, Steve acknowledged that while his cat-drawing business is the hook, the real investment is in Steve himself, and his ability to generate creative ideas that make money. Gadlin’s commitment to selling not just a business, but a partnership, paid off big time. Mark Cuban couldn’t resist, and offered $25,000 for a 33% stake. Steve walked away with an investment that was more than double his company’s total profits. More importantly, he walked away with a billionaire business partner, which is exactly what he wanted.
The founders of Talbott Teas and I Want To Draw A Cat For You both knew that making the sale required more than a stellar business idea. To get the money they came for, they had to make the Sharks feel good about working with them. That can be tough to do, but it worked, and their businesses have become two of the most incredible success stories in Shark Tank’s history.
Plenty of salespeople can make friends with a buyer, but maintaining the relationship is what can really boost sales, and there are a few tried and true ways of doing it.
1. Keep in touch
A recent Forbes article suggests that selling to your existing customer base is the best way to increase sales overall. Once you have built a trusting relationship with a buyer, their willingness to buy more in the future skyrockets.
2. Follow up promptly
The first time you get in touch with a potential buyer, make sure to tell them exactly when you will follow up with them. Make a promise, and keep it quickly. This is one of your best opportunities for earning trust. As Craig Rosenberg elegantly wrote in a blog post on sales development teams, “your buyer wants you to follow up.” Research done by Velocify also indicates that following up on a lead quickly can massively increase your conversion rate. Tell them you’ll call, and do it! It all boils down to trust.
3. Treat your customers like friends.
Don’t spend all your time trying to sell to the customer. Steven Van Belleghem illustrates this point beautifully by citing the example of Tupperware Parties hosted at customers’ homes. These parties were wildly successful at selling kitchen supplies largely because they created space for friendship and camaraderie between the seller and the buyer. Buying is often more of an emotional decision than a reasoned one, and buying from a friend feels good.
All the goodwill and relationship-building in the world won’t help if you can’t meet your buyer’s needs. Shark Tank has some excellent examples of how negotiating with the buyer’s needs in mind can help you make the sale.
Download the complete ebook > 5 Sales Lessons From ABC’s Shark Tank
In this ebook, we’ll revisit some of the most memorable episodes of Shark Tank, and explore sales lessons you can apply to your own business. Let’s “dive” in – download your free copy now.
In this 20-page ebook we’ll discuss:
- Why prospects buy into you just as much as your product or service
- Negotiation tips and tricks
- Setting the appropriate deal expectations
- The rise of the sales consultant
- Why passion always wins
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