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:
1. LISTEN
2. Know Your Competition Personally
3. Take a Consultative Approach
4. The #’s Are Sacred – Make Your Numbers, Meet Your Goals
5. Keep The Customer
Taking each
in turn:
1. LISTEN
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.
Salesperson: Why?
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!
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