11: The Sales Role

COURSE POINTS

• Sales is the advocate for the company. Their job is to sell the companies products not necessarily define them.
• Relationships are at the heart of a salespersons success
• Honest, straightforward value is the best way to sell to customers
• Make your gadget easy to sell or it won’t
• Incentives for sales needs to be comprehensive and fair

DISCUSSION

Frequently, sales and marketing get confused. This confusion stems from the seemly same job both do. This is incorrect. Sales is the advocate for the company while marketing is the advocate for the customer. Nowadays, this line get blurry because of the hyper connectivity that the Internet brings us. No matter how blurry, the roles are different and understanding sales is essential to a properly functioning company.

THE SALES PROCESS

Like most things, sales follows a process that takes customers on a journey to the, hopefully, eventual sell. This journey can be short and sweet or long and arduous. It all depends on what you sell. One constant throughout the process is the relationship between the client and the salesperson. This relationship is the crux of the whole deal. The client has to trust the salesperson while the salesperson has to put his companies product in the best possible light. The way this usually goes is as follows:

1. Lead Generation: There are a lot of customers out there and finding the right ones can be a challenge. Lead generation is the first step in culling through the long list of potential customers to narrow it down to prospects.
2. Qualification: Once you have a bunch of leads, you need to qualify them. This means applying some criteria that makes it worth your time to talk to them. This usually revolves around how much potential business they have or their willingness to buy.
3. Develop Value Proposition: Each customer is unique and will have certain criteria they use to evaluate your product or service. Crafting a value proposition for them will ensure they understand your products benefits.
4. Pitch: Be it formal or informal, the pitch is where you explain the value proposition to your customer and get feedback. This is where the debate about the real value begins.
5. Negotiate: Once the pitch is done and you have gaged some interested, it’s time to negotiate to see if you can reach a deal. There may be many rounds of negotiations. The trick is to know when your prospect is close to agreement by doing the next step.
6. Ask For the Sale: Too often, this step is ignored or done poorly. Asking for the sale can be as direct as literally doing it or subtly saying we answered all the questions and resolved all the issues, now what do you want to do. However you do it, you should do it. This is the only real way to move out of the negotiation phase.
7. After Sales Support: Once you get the sale, it’s vital to followup and support the sale. Too often, sales people think that once you closed the deal, it’s off to the next thing. Not true. The after sales support is just as important since it sets the stage for your next sales call. A customer that is well taken care of will buy again. Build a relationship that lasts by supporting your sold products well.

AVOID THE HARD SELL

Many a product dies on the vine because it’s just too complicated. It might solve a tremendous need but if it’s too complicated to understand and sell, it will not gain any traction. It’s up to product development to make products that are easy to sell. This does not mean that anyone can sell it. Rather, you need to get the salesperson excited and engaged with your product. They need simple tools to sell your great product. The more headaches, complication or learning curve they have to deal with, the least likely they will want to sell it. Remember, salespeople get paid to sell to customers. The more they sell, the more they get paid. The easier the sell, the more sales they make. It’s as simple as that.

COMPENSATION

Out of all the groups in a company, sales effects the top line the most. In fact, that’s the very definition of the top line. This top line is a major factor in the overall bottom line of the company. This direct relationship is the most measurable one your company has. A poor sales force will produce lackluster sales even with excellent products. Nothing ever “sells itself” In order to ensure a constant sales flow, it’s critical to compensate your sales force fairly. Most salespeople get a combination of base salary and sales commissions. These commissions will motivate your sales force to sell.

Sales commissions are ripe for complication which in turn, makes them ripe for gaming. Overly complicated commission structures don’t work and should be avoided. Don’t try and nickel and dime the commission schedule or make it so complicated that no one, not even the CEO, understands it. Keeping it simple will allow your sales force to easily calculate it and get on with more selling.

OUTSIDE REPS VS INTERNAL RESOURCES

Debates always rage about whether to hire an internal sales force or outsource it to sales reps. This constant debate centers around the huge fixed costs in hiring a large sales staff while the equally painful motivation of sales reps. There are no easy answers to this dilemma. In making this decision, ask yourself the following questions:

1. How Hard is the Sell? Sales training will be a critical part of any outsourcing decision. If your product requires a minimal amount of sales training, then it might make sense to outsource it. Products that require a significant amount of training will require proper training programs and constant attention.
2. What’s the Sales Volume? Some sales channels are too small for a dedicated internal resource. These channels are ideal for reps if the amount of overhead is minimal.
3. Does the Rep Firm Sell Similar Products? It’s always better to get experienced reps that know the customer base. This can be a doubled edged sword since they may also be selling your competitors products. You will have to sort that out and see if there are any conflicts.
4. How Will You Manage Them? It’s rare to fine a “fire and forget” rep firm. They need to be managed just like any other sales team. Figuring out who and how to manage them can make or break the relationship.
5. What are the True Costs/Benefits of an Internal Team? Figuring out the true costs and benefits of an internal team will make the decision a little easier. Just don’t look at the costs but rather do a Return on Investment (ROI) calculation that takes into account costs, training and benefits. An internal team will be easier to motivate since they are directly under your control, so quantify that value.

Once you answer these questions, you can then decide what makes sense. Usually, it’s a mix of sales reps for low dollar opportunities and your internal sales staff for the big dollar deals.

SALES IS DIFFERENT THAN BUSINESS DEVELOPMENT

There can be a source of confusion between the sales roll and the business development role. Both share common goals but sales is more tactical while business development is more strategic. Biz Dev usually works on longer term deals that don’t have an immediate sales payoff. Usually, these deals revolve around partnerships, mergers and acquisitions. We will discuss that more in the next post.

THINGS TO DO

1. Think of a great sales experience you had. What made it great? Conversely, think of a really bad experience. What made it so miserable? Write a sentence or two for each.
2. Strike up a conversation with your companies salespeople. Ask them how they sell products. What is it that works for them? How do they get past no?
3. Ask your boss to go on a sales call. Observe how the salesperson interacts with the customers. What questions does the customer ask? How does the salesperson answer them? Write a paragraph on your experience.
4. Write a paragraph pitching a product you want to sell. Now, go pitch it to a potential customer. How did they react to your pitch? Ask them how you can improve it.