Category: Sales and Marketing

Hiring and training sales reps is one of the more difficult challenges for entrepreneurs that aren’t experienced sales managers. I’ve talked to a number of entrepreneurs over the years that have tried hiring their first sales person only to have it fail multiple times, so much so that the entrepreneur continues to be the lone sales person in the company. Now, the sales assistant should be an entrepreneur’s first sales hire but most entrepreneurs, after deciding they want someone to come in and sell for them, want it to be completely taken care of and watch revenue magically come in the door.

SaaS startups in early adopter markets are even more dependent on developing a great sales team due to the nature of early adopter markets whereby there’s a lack of market awareness such that people aren’t even searching Google for the product because they don’t know it exists (this is one case where inbound marketing doesn’t work). As the SaaS startup grows, the need to scale out the sales team grows even faster, creating an acute need for sales rep training programs. Most companies, and especially startups, don’t train their sales people enough.

When developing a sales rep training program internally or evaluating outsourced ones, here a few things to keep in mind:

• Soft skills like presence on the phone need to be taught, in addition to more formal methodologies like Solution Selling or SPIN Selling
• Quality sales training with have some in-person training, some e-learning, and continual professional development indefinitely with the first year being the most critical
• An intense first week of hard core training is often a great way to set a foundation
• Mentoring from and shadowing of a senior rep is a great way to get some of the fuzzier, harder to document items transferred to a new hire
• Sales managers and executives are often the best to train new reps but their time is actually more valuable working with proven reps to help them be even more successful

Startups should outsource most sales training and focus on what’s core to their business while continually investing in their people. Sales rep training is hard to do well and it’s often not done, contributing to the hire failure rate of sales reps.

What else? What are your thoughts on sales rep training programs and what training firms do you recommend? Does anyone have a sales rep finishing school they’d recommend?

With the rise of Software-as-a-Service (SaaS) comes a growth in the inside sales model for B2B technology vendors. Inside sales has always been part of the software industry but a common approach was to sell expensive, installed enterprise software with territory field reps and use inside sales primary in an appointment-setting function or for low-dollar deals. Well, many SaaS products act like lower-dollar deals because bills are paid monthly or quarterly and contract terms are often for one year so the deal value and structures don’t support an expensive customer acquisition process — enter inside sales as the dominant sales approach.

As the startup grows and expands it can be difficult to build out the inside sales team fast enough internally. The next logical step is adding remote inside sales reps or opening up a separate inside sales office in a different geographic location. Here are some considerations to keep in mind:

• Inside sales is often a more junior position, so the camaraderie and peer pressure from team members can be important
• If the criteria for the inside sales position is extremely specific, having a larger geographic area to draw from provides more options
• A popular strategy for inside sales departments is to have sales development reps that just set appointments, and also act an in-house farm system/minor leagues
• As the compensation for the inside sales position becomes more lucrative, remote sales reps with experience become more available

In general, either approach is difficult but startups I’ve talked to have had more luck with a separate, dedicated inside sales office where teams of reps can work together compared to having remote inside sales reps. For remote inside sales reps to be successful, the reps should be strong, independent self-starters and additional effort should be placed on collaboration tools like video conferencing (I like Google Hangout with video).

What else? What are your thoughts on remote inside sales reps vs dedicated inside sales offices?

Recently two entrepreneurs in town started new blogs to document their thoughts, share their theories, and help other people. As part of that process one of the common questions is how many people will read it? I don’t have many sources of data but I’m happy to provide some monthly visitor stats from this blog as a baseline for others to get a feel for how things might work.

Monthly stats at six month intervals since the start of this blog:

• Jan 2009 – 739
• Jul 2009 – 1,115
• Jan 2010 – 2,565
• Jul 2010 – 3,591
• Jan 2011 – 6,197
• Jul 2011 – 8,628
• Jan 2012 – 13,430

So, from a standing start with a clean slate, this blog went from less than a thousand visitors in the first month to over 13,000 visitors exactly three years later with 1,072 blog posts published in the interim. I don’t know how this compares but assuming it’s average then it takes an impressive amount of time and effort to get a modest of regular traffic (most traffic comes from Google with social media being the second major source).

What else? What other traffic growth pattens have you seen from blogs and sites with frequent content?

Driving up and down the 101 in Silicon Valley you’ll see a highway littered with billboards for startups and established technology companies. Some of these billboards are advertising products and some are advertising job openings (“you could be at work now and commute less…”). With all the talk of moving off-line spending online, billboards in my city seem to be doing fine as there is no shortage of advertisers for them.

Last week RippleIT put up a new billboard in a prime part of town to increase brand awareness in an area dense with attorneys and creative types. The goal isn’t necessarily to directly produce leads, although that would be nice, but rather to educate people on the brand so that they’re more likely to respond to an outbound call or referral.

Interestingly, very few billboards have unique web addresses on them to track how many times people typed in the value.  Yes, some have QR codes, which is even crazier, but I would think short web addresses would be common by now. Perhaps billboard advertisers are less savvy or they know more than I do and don’t bother with unique URLs since no one types them in anyway.

With the talent war and talent shortage in certain areas I suspect that we’ll start seeing more billboards for startups outside of Silicon Valley. Startups need to make a more concerted effort to extract smart people out of large companies so that they have the opportunity to be a part of something much more exciting. Billboards aren’t the only answer but they can be part of a comprehensive solution.

What else? What are your thoughts on billboards and startups?

Sales rep compensation plans are super important and super challenging. There’s a necessary element of incenting the right behavior while keeping things straightforward and easy to understand. Too often companies make the compensation plan a tome with a corresponding Excel file required for some spreadsheet jockeying just to understand the different commission levers.

Here a few ideas to keep in mind when developing a sales rep compensation plan:

• Incent the right things — not all revenue is created equal so consider gross margin, profit, etc when incenting results
• Make the commission policy easy to understand — money is one of many motivators so make it clear how things work
• Don’t pay full commission unless quota is attained — quota is the minimum a rep should do and should be readily attainable by the right person
• Don’t cap commissions — why companies do this is beyond me
• Always have a timely plan — it’s demoralizing to reps to say the plan is changing but then to not deliver it when the year starts
• Recognize the stars — provide additional awards, incentives, etc for the top performers
• Align commission payments with revenue received — once the company gets paid the rep should get paid
• Strive for plan stability — Constantly changing the comp plan can be demoralizing so try to minimize changes and maintain consistency

Sales rep compensation plans are challenging but by following the keep it simple approach, customer interests, company interests, and sales rep interests can all be aligned.

What else? What are some other ideas for sales rep compensation plans?

Hiring and managing a successful B2B sales team is one of the hardest things to do for technology entrepreneurs. In a previous post, Milestones for New Sales Reps, there were four simple sales metrics to track: call conversations logged, demos completed, opportunities created, and deals won — those are pretty straightforward. As the sales department matures, there are a number of additional metrics to track.

Here are some sales rep metrics for startups to track:

• Calls:
  No message left
  Voicemail
  Conversation positive
  Conversation neutral
  Conversation negative
• Demos:
  Demo 1 Scheduled
  Demo 1 Completed
  Demo 1 Missed
  Demo 2 Scheduled
  Demo 2 Completed
  Demo 2 Missed
• Opportunities:
  Opportunity created
  Opportunity won
  Opportunity lost
  Revenue booked
  Average days till closed / won
  Lost opportunity revenue
  Competitive opportunity

This isn’t an exhaustive list but it’s a good start for understanding on a more detailed level how sales reps are performing. These should be measured on a monthly and quarterly basis as well as rolled up team and department-wide.

What else? What are some other sales rep metrics for startups to track?

People buy from people they like — we all know that old adage. All too often people purchase inferior products even after reviewing the superior product. Yes, there are reasons like price, functionality, implementation timeframe, etc that drive purchasing decisions but people underestimate the importance of the relationship in the sale.

My guess is that the relationship with the prospect is 70% of winning the deal and the product details (features, price, etc) is 30% of winning the deal. The relationship really is that important. Some companies win a number of deals because their brand and marketing muscle open the door for relationships to begin. Companies that are market leaders get 10-100x more publicity than the second place vendor, and thus get in the door even more.

The next time you win or lose a sale ask yourself how you did on the relationship building side of the equation. Was it better or worse than you had hoped? How important was the relationship in winning the deal? Almost always when I talk to sales people that just lost a deal they down play the importance of the relationship.

People buy from people they like, especially with complex sales — it’s never going to change.

What else? What are your thoughts on the percent of the deal attributable to the relationship and the percent of the deal attributable to the product?

Earlier today I was at the Atlanta Zoo with my little kids. We were at the playground area on the right just past the entrance hanging out on the short climbing wall. Five minutes in, the little train comes around the corner and proceeds to honk its horn several times. Naturally, all the little kids stop and wave as the train moves by followed promptly with asking their parents if they could ride the train. Was the train honking its horn with the kids there subtle marketing, general train conductor behavior, or both?

In Atlanta there are a number of burrito places around town including Chipotle, Moe’s, and Willy’s. When I ask my son which one is his favorite (we frequent them all) he always says Moe’s. I ask him if the burritos are better — nope. I ask him if the chips are better — nope. I ask him why he likes it the best and he says he doesn’t know why. My theory why he likes it the best is that when he walks in the door the Moe’s employees always say “Welcome to Moe’s” and that enthusiastic greeting sets the tone for the rest of the experience. It’s subtle marketing that’s effective.

The next time an experience puts a smile on your face or nudges you towards a buying event, ask yourself if the marketing was overt or subtle — it might just surprise you. Subtle marketing is some of the most effective marketing.

What else? What are some other examples of subtle marketing that’s effective?