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By: Mark L. Self
One of the most obvious, yet most overlooked functions of early to mid stage businesses is sales. Too many companies understand the importance of sales but have no clue how to set up a team that delivers results. And in too many cases the answer is seen as just hire the right people to do it for you and then blame them when things go wrong, or when they go right congratulate yourself on your hiring skills!
For companies that are selling technology in a business to business environment, there are five key points to keep in mind when setting up a winning salesforce:
1) Create a sales cycle and make everyone use it.
Most people know that you need to have “steps” that identify exactly where you are in a sales cycle from “suspect” to “customer”, but not many take time to link these steps to their particular business. Most importantly, once you decide on your specific cycle you need to be relentless about everyone understanding the steps so that you are all speaking the same language. A sales cycle example might be: Unqualified, Qualified, Value Proposition, Proposal, Contract and Close. Create an environment of “pragmatic optimism” and be on the lookout for everyone’s natural inclination to have “happy ears”-they are hearing what they want to hear because rejection is difficult for all of us. If the answer is “no”, then obviously the earlier you get to that answer the more time you have to work on more productive tasks. Test the validity of each deal in your pipeline in a regular, thorough way.
2) Track your pipeline and understand the underlying metrics of your cycle.
Using the above example, you need to understand the length of the sales cycle and the ratios of movement from each step. Length of cycle is key to level set everyone’s expectation level. If after tracking your cycle you can demonstrate that your deals take 9 months to close and suddenly people want you to get it done in 6, very loud warning bells should be going off in your head! The key takeaway for understanding the ratios of your cycle is how many suspects you need for every one deal you close. This helps you set your priorities on your marketing efforts for demand generation, amongst other things.
3) Create a return on investment (ROI) model that clearly itemizes the value you expect your product to give customers, and use it to justify the pricing and placement of your product. Most people have a very hard time with pricing of whatever it is they are selling. To help with this and generate buy in from your customers, you should build a ROI model that states in monetary terms what benefit happens when your solution is used. If you cannot articulate value this way or you decide that use of your product leads to benefits that are more “subjective”, get ready for a tough time convincing people to give you money.
4) Template your deliverables, and reuse and revise constantly depending on what works. From proposals to presentations, everything you potentially hand or show to customers has to have the same message and look. Do not, under any circumstances, allow your sales team to do one off proposals. Do let them constantly improve your collateral based on what does and does not work – and then make sure whatever is updated is implemented throughout the company.
5) Constant care and feeding of sales force is second only to development of product itself.
Do not “hope” for good results; insure good results by investing in the team on a regular basis. Too many times people look for the one “Heroic, take no prisoners” salesperson to key the sales efforts. Hiring good people is an obvious way to increase your revenue, but in most cases if you expend the energy to define your processes and then the money and effort to reinforce your processes, you can take average people and make them good or even great. And once you develop the perception of running a world class customer facing team, not only will recruiting be easier but the overall valuation of your company will go up, because in most exits (or life changing liquidity events!) the value of the company is only partly reflected in the technology—the rest of the value lies in the customer base, which is driven from your sales efforts.
Nothing in business is guaranteed, but if you start tending to these items, your chances of success will materially improve.
Mark Self is a consultant with 22 years of sales and marketing experience in the technology industry. He spent 18 years at IBM in various management positions, including two in London. He holds a Masters in Management from the Kellogg School at Northwestern University and did his undergraduate work at the University of California at Davis.
