While the average Shark Tank viewer may watch the show for entertainment value, the hit ABC series also provides an education on how to successfully sell your product to high-profile prospects.
One particularly successful Shark Tank business that offers valuable sales lessons is Talbott Teas. In their 2012 appearance on the show, Shane Talbott and Steven Nakisher, founders of designer beverage company Talbott Teas, presented their product as a “cup of couture” and “steeped in style.” But it wasn't just the elegant wording or 23 flavorful blends that caught the Sharks' attention.
The Talbott Teas duo already had an amazing product and successful sales. The company's sales had increased from $100,000 to over $500,000 over three years, with 50% profit margins. On the show, Talbott and Nakisher asked for $250,000 in return for 20% equity in their company.
With Nakisher providing the business details and Talbott emphasizing the creative aspect of the business, they eventually partnered with investor Kevin O’Leary, who invested $250,000 for 35% equity in the business. Granted, the equity was not what the duo originally asked for (and is a good lesson in improving negotiation skills). Nevertheless, the deal went on to be a success.
How Talbott Teas convinced the Sharks
A sale is never just about a good idea or a great product; it's about your ability to sell the product and convince the customer of its value. The founders of Talbott Teas 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 the duo.
Knowing the customer needs, preparing for the pitch, and nurturing the customer relationship are three tried-and-true sales strategies that Talbott Teas infused with new flavors to convince the Sharks that the business was worth the investment — and you can apply those strategies to your own sales efforts.
1. Know the customer's needs
During their sales pitch, Shane Talbott and Steve Nakisher offered the Sharks samples of delicious tea. The pair clearly had done their research on the Sharks' preferences — each Shark seemed pleased with their own sample (e.g., the duo presented “Chocolate Almond Allure” to investor Kevin O'Leary).
When you as a sales person truly understand what the customer needs for their business to succeed, it's easier to build a trusting relationship that could lead not only to a current sale but also to a willingness to upgrade in the future.
- Create comprehensive buyer personas. Talbott and Nakisher already had an idea of what was important to the Sharks (e.g., price points) before stepping into the Tank. Sales reps can better identify customer needs if they have a general idea of who the ideal customer is. Collaborate with your marketing team and identify the ideal customer's demographics, values, problems, etc. Distribute among your sales team.
- Use a checklist to research potential customers. Going into the pitch, Talbott and Nakisher didn't know which Shark would bite, but they were prepared with answers that would match any of the potential investors' questions. With your buyer personas as the foundation for ideal customers, research the point of contact, the budget, and the size of each prospect company (and any other info that's important). Check this information on the company's website and social media pages, such as LinkedIn.
- Match your product's/service's value with your customer needs. You can have the best product/service in the world, but unless it solves the ideal customer's problem, it's worthless. Sharks Mark Cuban, Lori Greiner, Daymond John, and Robert Herjavec didn't make an offer to Talbott Teas — not because they weren't impressed with the business, but because it didn't match their investment appetite or passion. Don't shove a sale on someone who won't benefit from your business. Instead, focus on your buyer personas and their needs. Show how you can solve the customer's problem, such as through case studies of similar businesses who have benefited from your product/service.
A sale is about your customer's needs, not your company's. Communicate that you understand these needs, and prove that you've done your research on the customer's business and industry as you head into the sales presentation.
2. Prepare for the pitch
Talbott and Nakisher came into the Tank ready for their pitch. Their presentation was an excellent blend of offering the sales numbers and communicating the high quality of the product. The duo was also prepared for the Sharks' Q/A session after the presentation.
Follow the approach used in their Shark Tank pitch when it comes to pitching your own product or service:
- Practice your presentation. A good sales presentation requires considerable preparation and practice. In addition to the numbers, include facts that prove the value of what you're selling. For example, Talbott and Nakisher shared that their tea was on Oprah’s list of Favorite Things in 2010 and that they had also presented on QVC.
- Back up your claims. Talbott and Nakisher proved that they knew the tea business inside and out. They cited facts about the steady growth of the tea industry and how quickly Talbott Teas was growing ($100K to more than $500K in sales over three years), and why. For your own pitch, research industry reports, and create materials, such as case studies, that prove how your product/service has helped other companies grow.
- Be ready with answers. When asked about Talbott Teas' five-year plan, Talbott responded immediately that they wanted to grow the company into a lifestyle brand and expand to more teas and licensing opportunities. Nakisher followed up with the company's exit strategy (a liquidity event), to which O'Leary responded, “You DO know what you're talking about.” Make a list of possible questions before your pitch so you have accurate answers. Check your CRM for data about current customers. What are their questions and concerns as they use your product/service? Your audience might have similar questions.
Go into a sales pitch armed with knowledge about your product/service and the industry you operate in. Also ensure that your messaging aligns with the company's brand identity. Talbott Teas is a luxury brand — the pair presented it as such, using words such as “elegant” to describe the product. Talbott and Nakisher also looked the part for the pitch, wearing chic business attire.
Your entire presentation should set the tone for what the customer relationship will look like with your company.
3. Nurture the customer relationship
The Talbott Teas' pitch was as much about quality interactions with the Sharks as it was about closing the deal. The lesson? Don’t spend all of your time trying to sell to the customer. Instead, view your interactions with customers as relational more than transactional.
You'll build trust and rapport faster if the customer doesn't feel like your only concern is their purchase. Customer management and nurturing strategies are crucial to building a successful customer relationship.
- Be customer-centric with your selling tactics. As mentioned, the Talbott Teas duo offered tasty tea samples to the Sharks to first establish trust in the company's product. Start off your customer relationship on the right foot. Use lead-generation strategies that are customer-centric. For example, offer your expertise on Quora, and answer specific questions about your industry. Provide an amazing customer experience even before someone becomes a customer.
- Follow up promptly. Talbott and Nakisher were quick with almost all of their responses to the Sharks' questions. The first time you get in touch with a potential buyer, make sure to tell them exactly when you will follow up. Make a promise, and keep it quickly to build their trust. Ask how the potential buyer would like to be contacted (e.g., email or phone). Use your CRM to track and organize every customer interaction.
- Build the relationship over time. Before the Shark Tank episode even aired, Kevin O'Leary brought on two additional Sharks — Daymond John and Barbara Corcoran — who, together, introduced the company to Jamba Juice. Customers are more likely to upgrade later on if they believe you value their company. In addition to helping customers better understand your product/service, provide advice on how they can best use your product, based on their specific needs. Be available on different channels (e.g., email, social media) and quick to respond to questions.
If you're not sure your sales reps are spending enough time nurturing their customer relationships, check your CRM reports. For example, the Call Duration report shows how long reps stay on the phone with prospects. Also, team up with your marketing team to offer quality nurturing content, such as email courses, videos, ebooks, case studies, etc., that will solve customer problems
Above all, be authentic with your customer interactions. Prove that you're concerned with more than just closing another deal — you want to add value.
Talbott Teas' successful pitch is proof that a sale requires significant preparation and is more about the relationship than about the transaction. With the use of the right strategies and your CRM, you too can convince potential customers to invest in your product or service — now and for the long term.
But how did Talbott and Nakisher's relationship with the Sharks turn out? Thanks to help from O'Leary, John, and Corcoran, Jamba Juice bought 100% of the company and now sells Talbott Teas in more than 440 Jamba Juice stores. Talbott is the VP of Innovation, and Nakisher serves on the board of directors. Not a bad deal, right?
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