Not all startups will employ a direct sales force, but many will. When they do, the value of the company and its ultimate success or failure often hinges on how well that distribution channel is built-out. In a prior blog, I described how companies can go astray by building out the sales team too early or in the wrong way.
This post addresses some core values or best-practices for sales leaders and individual sales reps. They are also very useful for the entrepreneur CEO to understand and embrace.
The list actually comes from an informal mentor and long-time Silicon Valley executive, advisor and investor, Joe Schoendorf, a consummate salesman to be sure.
Joe’s Rules of Sales:
- Know Your Competition Personally
- Take a Consultative Approach
- The #’s Are Sacred – Make Your Numbers, Meet Your Goals
- Keep The Customer
Taking each in turn:
Listening is one of the most difficult skills for people in general, but it’s a critical skill for a salesperson, at least one that wants to actually address a customer’s needs and concerns. Yet, it’s remarkable how many sales people actually score poorly on this attribute, as I’m sure many of you in both the customer and co-worker camps can attest.
A great salesperson is a lot like a detective or investigative journalist. It’s all about getting the facts and understanding the situation or problem the customer is trying to address. In that effort, the most powerful question a salesperson can ask is “why.” To illustrate the use of these most important three letters, consider this hypothetical dialogue below:
Customer: I need a CRM system.
Customer: I want to track my customers.
Salesperson: Why is that important?
Customer: So I can better understand what they have bought, and what they might want to buy next.
Salesperson: Why will that make a difference?
Customer: If I better understand what they want to buy, I can do a better job of ordering and making sure I have it in stock when they place the order.
Salesperson: Why does that matter?
Customer: I will have fewer abandoned sales, and I won’t be ordering inventory I can’t sell.
Salesperson: Why is that a priority?
Customer: My gross margins are 40%, and my competitors are north of 50% — I need to get my financial metrics in-line with or to be better than my competitors.
As a salesperson, how much better able is the one who asked “why” five times going to be in addressing the customer’s ultimate objective and win the business, than the one that said, “Oh, you need a CRM system? Let me tell you why mine is so great.”
2. Know Your Competition Personally
Few sales people have the luxury of selling a truly unique or monopoly product. All too often, there are competitors with decent to even better features, who have good reference customers, and who command a decent share of the market. Knowing your competitor personally makes you far better able to anticipate their moves, know how they are going to attack you, and how you can best thwart them.
A favorite sport of great salespeople (and great marketers) is to lay landmines or traps for competitors. In essence, you set a customer’s expectation and desire for a product feature, supplier quality, or other attribute that is unique to your product, and, most importantly, that the competitor lacks. When the competitor walks in the door, the customer wants to see or hear about things that the competitor doesn’t have or is notably weak at.
3. Take a Consultative Approach
A more systematic approach to the “listen” attribute, being consultative means being authentically focused on understanding and solving a real customer need, not simply jamming your product in where it may or may not actually solve the real problem. It also means being logical and quantitative to the greatest extent possible about the ROI of the product.
At my last company we implemented two different tactics to enhance the success of our sales team’s consultative sales approach. First, we hired MBA’s in our existing product development operation in India, to build quantitative and qualitative profiles on every major prospect. They would peruse prospect’s 10-Ks and 10-Qs (annual and quarterly SEC filings for public companies), analyst conference calls, press releases, articles written about the business, its financial performance and health, etc. They would then look for specific product-related challenges and metrics, and build models tying those challenges back to the prospect’s financials, and finally deliver that analysis to the sales rep who owned that account.
Then, once actively engaged with the prospect, we would perform an in-depth benchmarking and ROI analysis of their product operations to understand the prospect’s key business objectives and financial metrics. This allowed us to demonstrate quantitatively how our products could move the needle on their key business metrics.
4. The #’s Are Sacred
Make your numbers, meet your goals. Salespeople are hired for one reason – to drive revenue. If they fail, the company fails (a fact product folks can sometimes lose sight of). Salespeople must always be disciplined and goal-oriented, relentlessly moving current sales opportunities forward to the next step or stage, while also consistently prospecting for new business to keep the pipeline full. Salespeople must also be thoughtful about both their opportunities and their pipeline, ensuring that they are asking all the hard questions (no happy ears!), looking under the rocks before the customer (or a competitor) does, and employing limited company resources wisely.
Great salespeople also need to be transparent. An overly optimistic forecast (intentionally or not) means resources may get added that aren’t needed, decisions may be made that aren’t based on reality, and of course, revenue numbers are missed – a painful occurrence that the entire company feels. On the flipside, an overly pessimistic forecast is also harmful. The resources required to support the additional unforecasted business may not have been hired, unnecessarily stressing the professional services and support teams, perhaps even the product teams.
Be honest and accurate in the forecast, and then work like hell to deliver them. It’s your sacred commitment to the company as a star salesperson.
5. Keep The Customer
It is far easier, cheaper and faster to sell to an existing customer, than a new one (here’s a good infographic on the costs). It takes significant marketing and sales efforts, company resources, and time to win a new customer. Selling to an existing customer has a lower barrier to entry (you don’t need permission to call on an existing relationship). You should also have far greater insight into an existing customer’s needs and future plans, giving you the opportunity to help them plan your offerings into their information technology roadmaps, which can provide a significant, long term advantage. And most importantly, an existing happy customer is a brand advocate that will create leverage and network effects for future sales to new customers. In short, you worked hard to gain the customer’s initial business and trust – don’t lose it – it’s far too valuable.
As an entrepreneur/CEO, you will never go wrong embracing these values, as well as instilling them in your sales leadership and sales teams!