By Seth Godin

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Good to Great author Jim Collins explains how to control company growth, Dont lose your cool: EO DC member Anna Birch on maintaining control in business, and Entering a new international market? Tips from EO Charlotte members Michelle and Vernon Menard

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By: Dharmesh Shah

Building Startup Sales Teams

1.  Don’t hire sales people too early.  In the early days, the founders should be able to sell (and should be selling).

2.  You don’t need sales people, you need sales.  Don’t think VP of Sales — think “Revenue Engineer”.  (Not the greatest analogy, but just like you won’t hire a development “manager” as one of the first 5 people in a startup, you shouldn’t hire a sales “manager” either).  Don’t get caught up in fancy titles — focus on dollars in the door.

3.  Don’t hire several sales people at once.  Your goal is to figure out the “pattern” of what kinds of people are best based on what you’re selling and who you’re selling it to.  You need some feedback from the system so you can continue to iterate on your hires.

4.  If you’ve never hired or been around sales people before, be prepared for a bit of a shock to the system.  They’re not bad people, they’re just different.  If you’re an introverted geek like me, it’s helpful to remember that your startup needs to sell stuff.

5.  Resist the temptation to create complicated compensation plans.  If it requires a spreadsheet to figure out the commission, it’s too hard.  You’ll have plenty of time to confuse sales people later — start simple.

6.  Agile methodologies can work in sales as well.  Iterate!  Refine your demo script, your slides, and any other collateral information.  Capture the lessons learned by the best-performing people and spread it to the rest.

7.  Sales people will generall act in mostly rational (but often surprising) ways based on incentives.  The rules of the game defines the behavior of the players.  You were warned.

8.  ALWAYS connect incentives somehow to ultimate customer happiness.  If you reward just “deals getting done”, you’ll get deals — but at too high a price.  You might get push-back that sales people don’t control/influence customer happiness, but they do.  They “pick” customers, they set expectations, they control the degree of “convincing” applied.

9.  Make sure you understand the economics of your business.  Figure out your total COCA (Cost of Customer Acquisition).  This includes sales people, marketing people and marketing campaigns.  Quick example:  Lets say you paid a sales person $10k, a marketing person $10k and you spent $5k on Google AdWords (for a total of $25k) last month.  If you sold 10 customers last month, your COCA is about $2,500.  Different businesses have different needs in terms of sales vs. marketing spend.  Make sure neither is too far out of whack.

10.  Your life-time-value (how much revenue you expect to generate per customer) should be higher than your COCA.  No, I did not need a degree from MIT to figure that out.  Once your LTV is a multiple of your COCA, you’re ready to start turning the knob and scaling the business a bit (hiring more sales people).  But, if your LTV is way lower than your COCA, proceed with caution.  If there is no hope for LTV getting higher than COCA, you’ve got a problem.  Don’t try to hire additional sales people until the economics sort of make sense.  If the car is pointed towards a brick wall, hitting the accelerator is not a good idea.

11. Track data maniacally (even if it’s just in a spreadsheet).  Information you will want includes:  What was sold, who sold it, when, for how much, etc.  This data will be invaluable later as you start to scale.  For example, you should be able to answer the question:  We had 14 customers cancel last month — who sold those customers?  Is there a pattern?  In the early days, you likely won’t have the volume (or the time) to analyze the data — but you should at least capture it for future use.

12. Your pricing should be in line with your sales structure.  For example, you can’t expect to have an outside salesforce (that meets with customers in person) if your average deal size is only $10,000.  The math won’t work. 

13. Once you get beyond three or so people, running your sales in a spreadsheet will become painful.  Start looking at CRM systems (like Salesforce.com). 

14.  Start watching the shape of your “funnel” as early as possible.  How many leads are you getting a month?  How many turn into opportunities?  How many of those convert into paying customers?  Once you understand your funnel, you can slowly start tweaking your system to fix the “leaks”.

That’s all I’ve got for now.  For those of you that have built early-stage sales teams, what are your ideas and insights?

Posted by Dharmesh Shah on Mon, Aug 03, 2009

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By Seth Godin

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By Jack Daly

SALES MANAGEMENT CHECKLIST

Rank sales staff performance and deal with poor performers
One on Ones with each Sales Professional minimum monthly
Sales Meetings twice monthly min
Recruiting basket of at least 20 we are courting
Recruiting courting process built around a touch system
Recruiting interviews ongoing
Inspect the baskets (pipeline mgmt) min monthly
Inspect key activities of Sales Professionals
Progress reviews at least quarterly
Training, training, training: to include role practice, joint calls, training calls, coaching calls and building a success guide
Inspect monthly the Sales Professionals touch system
Recognition activities ongoing
Rewards systems ongoing, including contests
Compensation plans review twice yearly
Key account focus
New hire orientation
Unit performance management (Actual/Plan analysis)
Senior Management interactions (proactive/reactive)
SALES PROFESSIONALS CHECKLIST

Goal setting
Key activities identification
Key activities tracking
Touch system design and maintenance
Data base management
Sales meeting participation
One on ones with Sales Manager
Inspect the baskets prep (pipeline mgmt)
Training, training, training: Role practice, joint calls, training calls, coaching calls
Progress reviews
Actual/plan results analysis
Web 2.0/social sites proactivity
Operational interaction
Time blocking and management
Recognition systems: prospects/customers/clients and the support team
Model the masters

Bottom line is in any market, the key is proactivity and having your head in a positive place. If we wake up each morning deflated and defeated, don’t expect the day to get any better. Fret less about the results and stay focused on consistently doing the right activities, and the business will come. The question to be asked is who is ensuring that these checklists get done? Don’t expect people to be cheering about doing all of this, and having people “in their stuff”. Very few players on sports teams “enjoy” the coaches “in their stuff” during practices, yet all celebrate the victories. It’s time we went about posting some victories!

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By Seth Godin

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By Jack Daly

HIGH PAYOFF ACTIVITIES – This month’s opening piece is a follow-up to last month’s piece on “Quit Griping”. More and more companies and sales people are complaining about a drop-off in their sales levels. Whether this is occurring at the CEO level, the Sales Manager level or the Sales person level, the dialogue sounds “scary similar”. Lots of chatter about how difficult things are and how hard people are working. Yet, little seeming to show for the efforts.

Today’s economy demands that we work harder for business and sales. BUT, and this I believe is key, today’s economy demands that we work SMARTER as well. If your efforts have proven to show little return on investment, then it’s time to question whether you are making the correct investments. Are you calling on the right prospects/customers? Are you calling on them in the best way? What are you calling on them with? Whose agenda is the priority? Is the agenda yours or theirs? In answering the question “What’s in it for me?” are you the “me” or is the prospect the “me”? (clue-it should be the prospect. Make it about the prospect and the fruits will flow to you). All of this is called conducting your “selling” on high-payoff activities, with the priority on the client’s/prospect’s needs, not yours. Let’s go with a real-life example/story.

As many of you know, about 4 years ago I entered the world of triathlon racing (OUCH, that’s me after a serious bike crash last month where I broke my clavicle amongst lots of body bruises, and a smashed bike as well).

Now, the world of road bikes is certainly a world of discretionary buying, not a necessity. And, in a “depressed” or “recessed” economy, this would be a business one would expect to be “hurting”. Some perspective for those not up to speed on the investments in such a sport is probably appropriate. A decent racing road bike is probably about $4,000-$5,000 fitted out. One can then invest more in computer technology, advanced racing wheels, and a myriad of accessories. In other words, not an inexpensive sport, and again, not a business of necessity like “food and shelter”. So, in today’s economic times, one could reasonably expect that business to be off, or “hurting”.

The bike shop I rely on is Edge Cyclesports in Laguna Woods, CA (ask for Hank at 800-698-3343 if you ever need advice or service). I came to Hank and the team clueless as to what I needed and how it all worked. The Edge team took the time and care to educate me and never did I feel they were trying to “sell” me. Note, I had been to a number of bike shops prior to my going to Edge, but felt more like  a “number” and someone they were just trying to “sell” something to (what something? Heck, anything, they just needed to sell!) What the Edge team seemed to be was in the education business, trying to help people better understand the biking world and the triathlon sport overall.

So here I am a neophyte, the proverbial lamb ready for slaughter. Instead of channeling me toward that visually spectacular tri racing bike, they instead recommended an entry level road bike that would get the job done and I could see if the sport was one for me (and, with 2 bike crashes in the past 7 months, I’m beginning to wonder!). Well, that deal went down at a price 70% LESS than I was prepared to pay. Happy Customer! Next, I do some riding, enter a few races, and a year later, I am hooked on the sport and am ready for a bike upgrade. Let’s see, where should I go? Do you really think there is a question?  No haggling, just suit me up with that fine looking state-of-the-art racing bike! Out I go into the triathlon race world, getting better all the time. From time to time, I stop by the Edge shop, picking up accessories (hey, the bigger, impersonal bike shops have the accessories for less money, but I don’t give it a thought). Now, I’m really looking to improve my race performance times, and several competitors are touting the merits of racing wheels (best of class are the Zipps, at an attention getting $2,500 for a set of two wheels!) Just makes sense and go get them at the Edge from owner Hank. In speaking with Hank, he asks me a ton of questions about my riding times and capabilities and his recommendation is at the performance/speed levels I turn in, the wheels will not give me much benefit. (Folks, here I am, ready to fork over $2,500 and the “sales person/owner” is telling me to keep my money as it’s not my best investment). How’s that for creating trust? Selling is the transfer of trust. People do business with people they trust. What are you doing to create trust with your prospects and customers?

I had a couple races and lost my computer tracking device for speed and cadence, so in I went to Hank and asked for his recommendation. Without hesitation, Hank said the best solution, AND where I would reap a big improvement in my cycling performance would be something called the Powertap (which measures power expended amongst a number of things). I said “let’s do it”, never even considering to ask “How much?” So, I pick up the bike with the new Powertap, which requires a special new bike wheel, and comes in at about $1,200. Imagine, you can buy a computer for your bike for $30 and here I am here, with no questions asked. How’s that for “selling”?

Disappointing to me, I’ve crashed and smashed that fine racing machine twice in 7 months, and the Edge team has repaired it on both occasions, ringing up more $thousands in sales. My most recent trip to the Edge, I wanted Hank to look at the fit of the bike but had conflicts all over getting in the shop. So, Hank said come in 2 hours before the store opened, he met me there, made a ton of adjustments to my bike, my shoes, and instructions on the Powertap. When I asked Hank what I owed him, he said “just go out and enjoy the sport, he was glad to see me back at it.” Is this service? Or, is this selling? You decide.

All of this prompted me to ask Hank how the Edge was faring in this “down” economy. Wanna guess his response? In this economy, dealing in a business that is totally discretionary, operating at price points generally higher than the competition, his business is thriving. What Hank and the Edge has built is not a bike sales and repair business. Edge has built a Customer Loyalty and referral business. No need for advertising. No need for special sales, coupons and discounts. Just plain old caring about your customers, helping them in the best ways possible, and letting the rest take care of itself.

Go back and re-read the story. Can you identify the “High Payoff” activities? Quit doing what hasn’t been working for you and doing more of that. Quit doing what most of your competitors are doing and trying to match that. Quit challenging your competitors to see who can sell at the lowest price. Quit trying to sell people things, and start helping them with their needs, opportunities and problems. That’s the key to succeeding in any economic environment.

Ps. Four years ago I didn’t know Hank and the Edge team. Then, they became my bike store. Today, they are my friends, and like so many other of their loyal fans, I recommend them to as many folks that I can. Go reap those rewards and get your priorities of “selling” correct.

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By Dan Larson & Dave Wilens
Even in a tougher economy… buyers ARE still buying. More business IS out there for you to win. Being reactive or proactive in the little things you do as a sales pro makes all the difference in boosting your results.
Reactive = curl up and wish things were better.

Proactive = commit and look to do more to make things happen at every opportunity.

You decide. The empowering thing about sales is that YOU can choose to act to have greater control over your outcomes, results and paycheck.  In this article, we decided to give you some recent stories and examples of what CAN be done simply and proactively to produce more results in situations that may sound familiar to you.

Story #1: Opportunities in front of us

I was “on the road” in a restaurant for dinner nearby a fellow road warrior. They’re easy to spot, eating alone working with Blackberry in hand. After dinner we ran into each other and had a glass of wine at the bar. We began with small-talk conversation that lead me to discover he was in a position that I sell into. We exchanged a friendly conversation of each other’s business, challenges and dreams. Of course, I was interested to ask great questions to learn more about his priorities. We then exchanged business cards. Before I could send a follow up thank you card the next morning, I received an email asking me to assemble a proposal for us to do business together. Proactive approach: Keep your eyes open and be interested to open up new opportunities

Story #2: Bigger opportunities on every sales call

A young sales rep I was working with needed to hand-deliver a special order for a new customer. I went along as a field coaching opportunity to see what we could do and learn. We discussed HIS purpose of THIS call.

He insisted that it was to build a better relationship by providing excellent customer service. I contended there was much more he could accomplish to build a stronger relationship on this call with this new buyer. We sat in the car on arrival and he told me all he knew about the new buyer. This was her first order with him. He had done business with her boss who had referred her to him. He had learned that she owns a beach house but since he only met with her once, that’s all he knew. We pulled out their Question Guide and reviewed the Relationship and Lay of the Land areas for useful questions. He decided to find out if she had kids. He also decided to use the question — How long she has been in this industry or this position?

We entered the secured office building and were stopped cold at the front desk, waiting for his contact to appear. When she arrived she was very thankful for his special delivery. Then his question… “Are you heading to the beach house for the weekend?” — “Yes, can’t wait.” — “Do you have a big family you go with?” — “No thank goodness, the kids are grown, it’s just my husband and the 2 dogs.” — “Oh, what kind of dogs?”  and the story goes on.

The payoff? His follow-up included sending her a couple of beach towels and portable dog bowls for the beach house… sure to be a winner at helping to build a stronger relationship with this new buyer to solidify business in a personal and memorable way. Proactive approach: Look for ways you can get more out of every effort you make.

Story #3: Get more out of your time invested

(continued from #2) Upon leaving the special order delivery I asked “Where are we heading next?” The answer was the usual… back to the office to work on quotes and make cold calls. I not so calmly responded…”NOOOOOOO! Let’s go to the business across the street and the ones on both sides of this building. Just walk in and ask to speak to the person who orders what you sell.” At one stop next door, we ended up speaking to the gate keeper that told us the name of the decision maker (Mr. Big). He also gave us a brochure of theirs that lists their top customers. The list of their customers is 100 of the biggest companies around. This new lead source will be even more valuable once we earn our letter of recommendation from Mr Big. The rep’s proactive follow-up included a personal thank you note to the gate keeper. Proactive approach: Look for ways you can get more out of your time to make it count.

Story #4: There is referral “gold” in your current customer relationships!

With my money manager client, we were discussing how to generate more leads in one of their remote satellite markets. As we reviewed current clients there, I learned one high net worth client is a soon-to-retire referee in the NBA who is also their raving fan. He is a warm, friendly and gregarious guy that naturally builds strong relationships. He’s very active in the NBA circles, sits on councils and has an enormous “Rolodex” of friends in the NBA… players, coaches, refs, executives, etc. This client had extended an invitation for my client to be his guest at an upcoming Laker game. (Me… I’m dying over here!… the referral opportunities not to mention a VIP Laker game!) We talked about how my client would attend the Laker game and work to strengthen the relationship with this client and by extension, introductions his circle of NBA friends. We also worked out a proactive plan… actually a referral system for making regular, relevant, valued touch points (not selling) with the ref and all of their “A” list clients in a meaningful way. We planned many of the touches to connect directly to their personal interests and grow their relationships. The evidence is growing that this is their best way to earn referrals and grow their business by design. Proactive approach: Look for inventive ways to develop deeper, productive relationships with your clients and do it consistently.

What little extras can YOU do to maker bigger results happen? If you have questions about the ideas here, give us a call. We’re experienced sales coaches in the “Jack Daly Way”. We’re a resource to help you get more out of what you’re doing! Call Jennifer at (888) 298-6868.

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By Seth Godin

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