Inevitably, and correctly, there is a lot of focus in earlier stage businesses on the nature of the product or service.
Is it better, different, cheaper, easier etc than its incumbent competition and/or is it truly disruptive? Equally importantly does the customer agree, or as Rob Ryan puts it in his book on entrepreneurship, ‘Does the dog like the dog food?’.
However, even if some or all of the above attributes turn out to be true and the dogs do indeed love the dog food, the success of the company will be critically dependent on its ability to introduce effectively the product or service to its potential customer base – this is where sales and marketing need to earn their spurs.
Whilst marketing has an equally vital part to play, particularly in defining clearly what the core company message is and ensuring that every element of communication and collateral reinforces it, for the purposes of this piece, I am going to focus on sales.
We have all met great salespeople with the magical ‘can sell fridges to Eskimos’ skill, and they are very valuable. However, finding them is non-trivial and even if found, they and all other merely mortal salespeople can be made vastly more effective by the correct preparation, structured approach and data driven oversight and support.
There are a number of steps in that process that represent a lot of work, but is time very well invested. Many of these things will sound obvious but it is surprising how often the desire to ‘get out there’ dominates comprehensive sales force planning. It is also interesting to note that the best person to deliver this analysis and implement highly effective sales force management is often not the best salesman, and may even be non-revenue generating directly – a tough decision for an earlier stage company.
The first step is developing a full understanding of the optimal target customers. In essence this is an exercise in understanding the trade-offs between the scale of the opportunity and the likelihood of winning business. The former is generally easier to assess than the latter and should be done initially at an appropriately high level – such as by industry vertical and geography rather than individual company basis.
Likelihood of winning is harder to assess in most situations given the large number of elements to consider including, but by no means limited to: relative product/service attributes; nature of competition; relative price position; brand sensitivity and ease of switching – but a structured and thoughtful exercise allows some bucketing of likely success.
The output of this exercise put simply: the key target universe provides the core data for the subsequent routes to market analysis to establish the best way to approach those targets. This in turn helps define the appropriate sales structure both in terms of number, role and relevant experience. Even with this in place, there is much to do in system terms to drive the team’s effectiveness.
Ensuring all the relevant data is collected to allow clear KPIs to chart performance by individual beyond simply revenue generated will help identify early who and what is done well with appropriate focus on, or change for, what is not. It will likely include number of leads generated, ratio of meetings held, sales generated, sales growth from existing clients over time and so on.
With the right metrics established, it is then important to review the compensation system to ensure that it drives the desired behaviour. This may be as simple as sales revenue booked – but margin achieved may be relevant as will other factors such as how revenue involving more than one salesperson is handled, as this will be vital to deliver strong team dynamics and mutual support.
None of the above replaces the need for careful hiring of the right sales personnel, marketing delivering the right materials or indeed having the right product, but it will go a long way to making any sales force more effective – even if they can sell fridges to Eskimos.
