Finance

A sale a day keeps the VC away

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If your focus isn’t on sales, then you are a goner.

The title of this blog quotes a sign that was pinned to the staff notice board of a VC-funded company. Great, huh?

 

And that is exactly the right attitude. If your focus isn’t on sales, then you are a goner. The venture capitalist will be knocking on your door asking why you haven’t met targets. That’s the wrong reason to have a visit from the VC.

 

Too many companies talk about marketing strategies. All the best marketing strategies in the world will get you nowhere unless they turn into SALES.

 

When I’ve needed more sales staff, most people I interviewed just wanted to develop campaigns and high level strategy stuff. Even though the candidates applied for a sales job, most saw it as a short term “apprenticeship” they have to do to get into real marketing.

 

And that’s rubbish!

 

Don’t get me wrong – you need an overall marketing strategy, but that’s 20% of the job. Making sales is 80%, and it’s much harder.

 

Go look for someone who loves sales and just wants to sell. And pay them lots of money based on how many sales they make. And if they make more than the CEO, that’s OK as well. If it’s performance based and the company is making money, then what does it matter?

 

Don’t let “CEO ego” get in the way here. At one stage the best salespeople at IBM got more than the CEO. They understood the formula. Drive salespeople with a good bonus system and you will reach your revenue targets.

 

Everyone’s attention needs to be on sales. Your product team need to know what is selling so they can develop product that prospects will buy. Admin staff are often the first point of contact and need to know what your key selling messages are. You don’t want any leads slipping through your fingers.

 

If the CEO isn’t obsessive about sales then it’s unlikely that other team members will be obsessive. And it takes obsession to reach sales targets when you are getting into the market.

 

New companies always have more barriers than existing companies. There are issues of trust, service, product reliability – and the list goes on. Most startups are working with untested products in new markets; a risky place to be. And that’s the very nature of entrepreneurial businesses. It’s part of the territory.

 

So it is even more imperative that you are absolutely obsessive about sales.

 

Here are a few tips…

  • Have a sales meeting at least weekly with written reports (graphs and spreadsheets). You want the numbers, not a long report with lots of words. You can’t measure words!
  • Develop reports that are template based and take no more than 15 minutes to prepare each week. A good database will do most of the work. You don’t want salespeople spending hours preparing reports. They’ll get bored and that’s just wasting their time.
  • Sales members should report to the full meeting on the number leads they have, the number of proposals/quotes, the number and value of sales.
  • Each salesperson to report actuals against their own targets. So that means that each person has a monthly sales target to meet.
  • Know the rates of conversion from lead to proposal/quote and from proposal/quote to sale for the company and for each salesperson.
  • Put graphs up in the office of each person’s performance by month. Salespeople have big egos and like to show off. If your team don’t want the graphs up then you have the wrong team. I’ve seen the “thermometer” work really well.
  • Reward excellent performance.
  • Work out how many leads you need to reach target. For example, if you have a 20% conversion rate from lead to sale then you need five times as many leads to make one sale.
  • Understand what your average sale is so that you can calculate back the numbers.
  • Share ideas about “what works” at your meetings.
  • Keep meetings short and finish on time.
  • Have meetings last thing on Friday (a few wines always go down well at this time) or first up on Monday (perhaps over breakfast) to get a fresh start for the week.

 

Good luck with your sales. Next week I’ll talk about a sales process that will get you better conversions and give your sales team great support.

 

Till next week…

 

 

Gail Geronimos, is the founder of Achaeus, which helps entrepreneurs develop their businesses and she has just started a new site www.pitchingtoinvestors.com with tools and tips about how to develop killer presentations to raise capital.

To read more Gail Geronimos blogs, click here.

 

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