Shark Tank, a popular American reality television series on ABC, started its 10th season in October 2018. The focus of the program is the initial pitch made by hopeful entrepreneurs to eager investors.
While many of the 5 million people who watch Shark Tank do so for entertainment, some of us watch for the popular show's weekly education on how to successfully sell your product to high-profile prospects.
And, believe it or not, we can take away a lot of sales lessons from those success stories. Below, we identify nine of the most successful Shark Tank businesses and share what you can learn from them.
1. Scrub Daddy
The Scrub Daddy sponge can scrape tough stains without losing its fun shape. On Season 4, Aaron Krause, founder of the company, demonstrated the sponge's capabilities, easily removing the stains from glass and other kitchenware.
Two of the investors (or Sharks), Daymond John and Kevin O'Leary, were interested in the product, but Scrub Daddy eventually partnered with inventor and entrepreneur Lori Greiner for $200,000, in return for 20% equity in the business.
In 2012, before the pitch, the Scrub Daddy was carried in just five supermarkets. Today, the Scrub Daddy is available in thousands of retail stores. The company also generates revenues of over $175 million and is considered to be the most successful Shark Tank deal of all time.
Learn how to negotiate and focus on the other side of the deal, not yours.
Scrub Daddy had offers from multiple investors. Greiner's original offer was $200K for 30% equity in the company. When Krause realized that more pressure was on the investors than on himself, he negotiated a better deal with Greiner — and the rest is history.
Assuming that your product/service offers genuine value, don't focus on your own limitations during a sale. You'll miss the big picture. Instead, recognize the reasons for investor purchase.
When their own kids struggled to use existing child cups with straws, husband and wife Mark and Hanna Lim created Lollacup.
With several offers on the table, including from O'Leary and John, Lollacup eventually partnered with businessmen/investors Mark Cuban and Robert Herjavec for $100,000 in return for 40% equity in the business.
The company has now expanded into Lollaland with a variety of product offerings for young children. Lollaland has made more than $2 million in sales since the Shark Tank pitch on Season 3.
If you can get what you ask for during your sales call, take it.
The Lims were originally seeking $100,000 for a 15% stake in their company. But after an offer from O'Leary, they made a counteroffer of $100,000 for 40%, which both Cuban and Herjavec eventually agreed to. Rather than trying to push the offer lower, the Lims took the deal.
The lesson here? While negotiation is important, don't back out on the price you offer. Nobody likes a greedy salesperson, or one who won’t keep their promise. It also damages trust in the customer relationship.
3. Tipsy Elves
Tipsy Elves is a holiday-themed apparel company that specializes in ugly sweaters and even costumes and ski gear.
Before presenting to the Sharks, cofounders Evan Mendelsohn and Nicklaus Morton put an extensive amount of preparation into their sales pitch, including memorizing the gritty details of the business, such as conversion rates and customer-acquisition costs. Their hard work paid off — Robert Herjavec invested $100,000 for a 10% stake.
The company saw $600,000 a year in sales before appearing on Shark Tank. They are now bringing in more than $50 million in revenue. Their clothing is even worn by celebrities such as Ryan Reynolds and Jimmy Kimmel.
Tailor your pitch to your customer's pain points.
The Tipsy Elves founders had this to say: “We tailored our pitch to the sharks we were most interested in: Mark Cuban (with his internet experience and ability to expand the online brand presence), Daymond John (with his retail and branding experience), and Robert Herjavec (because of his internet experience and presence in Canada, another big market for us).”
Know who you're presenting to when making a sale. Research the customer's needs and wants (review buyer personas, company websites, decision-maker LinkedIn accounts, etc.) so you can speak to how your product or service provides value. Also, practice your sales presentation as much as possible, and be ready to answer tough questions.
Created by husband-and-wife team Julie and Brian Whiteman, the Groovebook app lets customers order a photo book using their smartphones. Subscribers can easily free up phone space with the app and receive a monthly photo book for $3.99.
In Season 5, Mark Cuban and Kevin O’Leary snapped up the deal and collectively invested $150,000 in the subscription-based service in exchange for 80% licensing rights.
500,000 subscribers jumped on the product soon after the Shark Tank pitch. In 2014, the company was acquired by Shutterfly Inc. for $14.5 million (the company was only 18 months old). Kevin O'Leary named the deal one of his top investments from the show.
Work alongside your sales team, and avoid silos.
The success of this business was a joint effort. Brian Whiteman first created a photo book for his wife to cheer her up after she lost her phone (and the thousands of pictures on it). Together, they developed the smartphone app so other people could easily have hard copies of their digital photos.
Sales is a team activity. Build relationships with other reps on your team by discussing deals in the pipeline and strategies for meeting your quotas. Silos are a major problem across departments. Avoid this gap within your sales team. A CRM is an excellent way to ensure that all team/customer conversations are recorded. You can also track sales team performance.
5. Squatty Potty
Invented by a mother, father, and son as a result of the mother's colon issues, the Squatty Potty is an ergonomic toilet stool that helps users. . . take care of their bathroom business. Lori Greiner invested $350,000 for 10% equity in the company on Season 6.
The Squatty Potty made $1 million the day after the episode aired. At the end of 2017, the Squatty Potty had almost $33 million in sales. The company has also created different versions of the product, including a glow-in-the-dark Squatty Potty.
Prove your value to the customer.
The Squatty Potty wasn't exactly a glamorous investment. The Sharks' mouths dropped to the floor when Bobby Edwards and his mother Judy asked for the $350K investment in the toilet product (a $7 million company valuation).
The pair was not deterred. Pitched as “a simple product that changes lives,” the Edwardses highlighted the negative health effects of the traditional method of “taking care of business,” complete with charts and statistics. They also highlighted their sales ($2 million in the first two quarters of that year). Needless to say, the Sharks were hooked.
Take this approach when selling to your own customers. Even if you think you're selling the best product in the world, potential customers are not going to buy in unless they can see the value for themselves. Give them the why, and back up your claims with evidence, such as case studies of other happy customers.
Packaged with an eye-catching green logo, BuggyBeds are glue traps for bedbugs. Simply stick the traps under beds, chairs, etc. — the traps do the rest and prevent infestations.
All five Sharks invested a combined $250,000 for 25% of the company.
After the Shark Tank pitch, the product saw $1.2 million in sales in 2016. BuggyBeds is sold in more than 20 countries.The company has also expanded to other products, such as pet flea and tick glue traps, mosquito-repellant bands, and mattress and pillow protectors.
Align sales with your marketing and customer support departments.
“Sleep tight, and don't let the bedbugs bite” was the final line of Maria Curcio and Veronica Perlongo's BuggyBeds pitch. While there was definitely a market for their product (and the Sharks knew it), BuggyBeds did an excellent job of marketing and getting the Sharks excited about the glue traps. As with the Squatty Potty, bedbug prevention is not exactly an exciting investment. But combined with the compelling pitch and eye-catching visuals, BuggyBeds sold the Sharks on the concept.
Ensure that your sales, marketing, and support departments are working together. Among many problems, unaligned departments can result in inaccurate sales enablement material from marketing or missed sales opportunities with customer support.
Combat the gap with alignment strategies. For example, implement a “sales rep for a day” shadowing program for all departments to learn sales skills. Create a CRM feedback loop with your marketing department. Bridge the gap between customer support and sales by aligning your metrics and communication channels. Get creative with your strategies.
7. Wicked Good Cupcakes
If you're craving a cupcake, Wicked Good Cupcakes has your back. Cofounders Tracey Noonan and Dani Vilagie, mother and daughter, created gourmet cupcakes that could be shipped nationwide in cute jars while staying fresh.
On Season 4 of Shark Tank, Kevin O'Leary invested $75,000 in exchange for a cut of every cupcake sold.
Solve the customer's problem, don’t sell the solution.
Noonan and Vilagie opened up their first cupcake store in October 2011 in Cohasset, Massachusetts. The demand for their delicious cupcakes quickly grew, and requests to ship to other states began to come in.
It was difficult, however, to ship cupcakes and have them arrive at their destination fresh and whole. The mother-and-daughter team then discovered that mason jars could be used to package and ship the cupcakes, keeping them fresh for up to 10 days.
Take a page from this mom and daughter's book — match solutions with problems. As a sales rep, you need to understand your customers' problems on a deep level. Listen to customer concerns. What keeps them awake at night? Why does your product or service solve their problem? Get feedback from current customers, and create buyer personas that outline common problems for each type of customer. Build the relationship around the customers' best interests rather than trying to push a sale.
8. Ten Thirty One Productions
On Season 5, Mark Cuban pledged $2 million for 20% of the entertainment company — the largest investment on the show up to that point.
Since the Shark Tank episode, the company has expanded its scary experience offerings to New York. Revenues were projected to grow between $2 and 3 million in 2017.
Demonstrate your passion for the product.
Ten Thirty One Productions was a success before Shark Tank because the cofounders, Melissa Carbone and Alyson Richards, did as much as they could to sell the horror experience before needing the investors. For example, the pair used $365,000 of their own money and investments from friends to set up the original Los Angeles Haunted Hayride in 2009.
If you want to be a great salesperson, you need to be in love with the product or service you sell. Customers will be able to tell if you're not really invested in your own product.
9. Copa Di Vino
Granted, wine company Copa Di Vino did not land a deal with the Sharks. Despite appearing on the show twice, the investors didn't buy into the idea of wine packaged in small cups (although O'Leary did make an offer for the patents rather than the brand).
Before the show, the company had $500,000 in sales. Thanks to the exposure from Shark Tank, Copa Di Vino's sales grew to $12 million in 2016. Walmart and Kroger are two major stores that now offer the product.
A sale isn't always the right fit.
Your product or service is not going to be the right match for every customer — and you shouldn't try to sell to people who ultimately don't need your product (the customer relationship will be rocky from the start). Know who your customers are. Focus on the quality of the leads in your pipeline rather than on the quantity.
Also, be transparent with potential customers. If you discover in the qualification stage that a lead doesn't really have a need for your product, let them know. Just because they're not a good fit at the time, that doesn't mean they won't need your product or service later on. You'll also build trust with potential customers by proving that you value them over the sale.
The sales lessons from these Shark Tank deals share a theme: building and nurturing the customer relationship. No matter what level you're at in your sales career, never lose sight of meeting the needs of your customer base and creating an amazing customer experience. Use these sales lessons to succeed in your own “shark tank” world of sales.