Most every entrepreneur does things initially that don’t scale, and that’s okay to start. Pretty soon they realize that the things that made them successful enough to get initial sales and customers wont work for them to reach the next level at their startup.
One of the most frustrating things for the entrepreneur is when they run out of folks “in the network” who they can sell to. After having sold to their ex colleagues, friends, etc., their network dries up. No longer is it possible to sell via the network to sustain the growth.
That’s when they realize they have to build a sustainable sales process and organization to grow the business and increase revenues.
They then encounter 3 most frustrating things as they try to recruit sales people, define the sales process and grow their sales muscle.
1. How to hire the right sales people who are motivated by commissions alone?
First, realize that the market tends to be fairly well balanced. It follows consistent demand and supply constraints. Most good sales people have many folks chasing them to work in their company, similar to good engineers. If you wont expect an engineer to work for stock options alone, then expecting a sales person to work for commission alone is something you should be able to relate to.
The problem I hear from many entrepreneurs is that they are unable to determine if the sales person would actually close any deals, so they are unwilling to make a commitment to the sales person. Well, that’s the chicken and egg problem for sure, which means that person who’s more in demand will not make the compromises. Most likely, you the entrepreneur will end up finding some small amount of money to pay as base salary to give the sales person a start to get going. The best sales people are smart about risk and reward. If they see the opportunity to make more money by forgoing their base salary but get a much higher commission, they will.
2. How do they share the details of the “sales process” that they have perfected with the nuances that make the new sales people successful quickly?
As an entrepreneur and the initial sales person, you understand the sales process for your product the best. You have likely sold to many potential prospects and have addressed many objections and handled the toughest questions. So, it is best for you to detail the steps of your sales process to on-board the new sales person. It is best if you do it in a 2 step method.
a) First you can tell – take the sales person through the steps in your sales process via examples. How you sold to the first 5 prospects is more important than how the ideal sales should happen. Take them through the detailed steps in the number of meetings, the different people you met and what questions came up at each stage.
b) Follow this up by showing them – go on the first 5-10 sales calls together so they can learn from your initial pitch, the questions, etc. Show them how you demo, how to position the product, handle pricing questions etc. This also helps you build a bond with the sales person so they can be honest with you later when it comes time to ask the difficult questions.
3. How can they determine if the sales person is on the right track?
Initially you have to be on all / most of the sales calls after you hire a new sales person. Hopefully you have hired someone ambitious and mature, so they will be able to then build a sales organization for you instead of you having to hire a new VP of sales above them. The Tell and Show approach works best for sales people, is my experience.
Use this time to determine and evaluate the sales person – are they able to build relationships with the prospects? Are they able to handle questions effectively? Are they following through on their commitments? Are they able to keep activity level high consistently?
The other thing you should do is to take your average sale cycle time – lets say that is 8 weeks from introduction to close. Double that and evaluate the sales persons ability to close deals in that time period. The reason is that the first cycle time is usually the period of extreme learning. It is rare to get a sales person that will shorten the sales cycle right away unless they come with connections in the industry who have the problem you set out to solve.