Editor’s note: This article has been adapted from the OpenView Labcast “Startup Sales Dos and Don’ts with Colleen Francis.”
For many young startup companies, the difference between achieving short-term and long-term success comes down to their ability to build effective, high-performing sales teams. Unfortunately, that’s anything but easy. In fact, the path to success is often riddled with sales mistakes and pitfalls that can deal crushing blows to a startup’s development.
Colleen Francis, founder and president of Engage Selling Solutions, spoke with OpenView about the common missteps she sees many young sales organizations making, and offered her advice for how they can better fuel their success and help drive their companies to the next level.
For startups approaching an expansion stage in their business development the pressure is really on for sales teams to generate revenue and begin scaling their operations. What are some of the sales mistakes you see these organizations making at this critical stage?
The biggest mistake that I see a lot of startup companies make is they worry that they don’t have enough revenue coming in the door, but when I look at it, it’s not really a sales problem so much as it is a client traction problem. So we have to go back to prospecting. Who are we targeting? What’s our message? What’s the value proposition, the business value proposition of that message? Who are the right buyers? And how many of these leads do we need to have in the pipeline in order to ensure success in a given month, quarter, or year?
Pipeline development is critical. The first thing that we always look at with a startup company is how are we going to build the pipeline of real opportunities? What I think is important is that we target the market very clearly and that we go after very specific customers who can close quickly and who can provide really good case studies, because the sooner that we can build practical case studies or use cases, the bigger opportunities will start to manifest and the more opportunities we can create. But it all starts with pipeline development.
In addition to emphasizing client traction over sales revenue, what are other common sales mistakes startup companies need to avoid?
One is not understanding just what it takes to build a pipeline and ignoring the prospecting side. Two is not really understanding the business value of the software or the technology. As a result, what I see are a lot of early-stage startups hiring salespeople who are technology-based sales people who don’t understand the business case, which is a mistake because people ultimately buy your software or technology service based on the business value it provides. As a startup, you need to hire salespeople who are great hunters, who love to build pipelines, who have a proven background of building something from nothing.
Founders often get a little bit excited about salespeople who have really great resumes in closing large deals or managing big, multi-million dollar opportunities. But they might not be the right personality fit or behavioral fit or DNA fit for a startup company. It needs someone who can dig in the trenches, who can go after deals and really hunt them.
In many cases, the mistakes being made by startup sales teams trickle down from the VP of sales and other leadership positions. What are some of the more common sales mistakes you see in these scenarios?
One of the mistakes that the manager can make is not setting the course and sticking to it. Managers that have bright, shiny object syndrome, who either get tangled up in too many non-sales related activities or who change the course of direction or compensation plan every month can be really detrimental to the team.
Your first goal as a sales manager, if you’re selling direct in a territory, needs to be to replace yourself. That’s because 1) Sales teams require full-time management, and 2) You don’t want your team feeling as if you’re selling against them. If you’re managing a territory that has all of the best leads, if you’re managing the biggest accounts, if you’re stepping in and closing deals and preventing someone else from getting a commission, the team won’t work with you. They’ll work against you.
So, should a sales manager shy away from closing deals in order to avoid upsetting the working relationship between management and sales reps?
Absolutely. It puts them in direct competition. Unfortunately, that’s the way the reps think, so eventually they’ll stop coming to you for management experience or coaching, and they’ll start to get embittered, quite frankly. Right or wrong, based on assumptions or not, they’ll start to feel like, “Oh, yeah, Colleen, my manger, she takes all the best leads.”
You also need to make sure that compensation is congruent. We often see sales management getting paid one way, sales teams getting paid another, and the two are incongruent, which means they’re working towards different goals, which puts them at odds against each other. Before we know it, we have teams that are not working together to hit their sales targets.
Colleen Francis, is founder and president of Engage Selling Solutions, named one of the top 5 most effective sales training organizations by Sales and Marketing Magazine. Colleen has over 20 years of successful sales experience and helps sales professionals everywhere to make an immediate and lasting impact to their results through her key note speaking, sales training, and sales coaching.