Creating a High-Performing Sales Team
Previous Note: Building Comfort with Sales
Well-managed delegation is the secret to scaling. You can create a great company or a family by practicing the craft of scaling. This is why founders should learn to become great company builders. The first level of delegation is hiring a small team and leading the team. The second level would be to replace yourself and hire leaders to lead the sales teams. For most startups any further delegation will complicate the life of top salespeople. They will get frustrated and leave.
Here are some key tenets of assembling and growing a high-performance sales team.
Interpreting Sales Profiles
Begin by comparing it in a crude way to engineering profiles. The engineering function has two key profiles: builders and testers. The sales function has hunters and farmers. Real customer situations are a good way to understand the difference:
Hunters do NN. Farmers do EN and EE. Learn to read sales profiles to separate hunters from farmers.
Founders with unconventional backgrounds have created some of the greatest companies. The same applies to the hunters. Farmer backgrounds exhibit more consistency. Both are crucial to your startup.
Designing Sales Compensation
Don't ever play with a top salesperson's W-2. This rattles the top performers and they start looking for a change. Before you take away something from salespeople, lay out what you will give. And give at least one quarter before taking. Two quarters is preferable. Common mistakes are changes in the territory or target customer list.
Hunters are the most prized and more expensive. Compensation should be different for hunters and farmers. Your top hunter should earn more than the top farmer. If not, something needs tweaking.
Follow the KISS principle. Keep minimal performance parameters to compensate hunters. For farmers, you can add more, but not much. Within the farmers, you can add more parameters for EE.
Top producers, both hunters or farmers, get very passionate as they start succeeding. And passion compounds over time. Recognize this pattern early on. And be more present around the top producers. Give them extra love. Increase their equity component. It will catapult their performance even further.
Identifying Top Salespeople
Simple and proven hiring criteria:
Varying Use of Pre-Sales Resources
Pre-Sales resource is a technical resource attached to one or more salespeople. Understand different styles in which each salesperson utilizes pre-sales support. Some salespeople need strong air cover and some are like lone wolves. By air cover, I'm referring to the presence of pre-sales resource(s) while selling.
Salespeople who need heavy pre-sales help will focus on the psychology of convincing. They will rely on a technical resource to cover the technical aspects of the product or service.
Salespeople who like to function with light pre-sales support are very curious. They like to go deep into the product. They will spend time with engineering and support teams. They will let pretty much everyone in the startup know about the help they need. They may seem like a cry baby, but remember that crying baby gets the milk. And don't treat this as a productivity drag. They are masters of getting things done (GTD). They will work across different sets of people towards the singular goal of closing a sale. They will craft a unique message and design a workbook suited to their way of selling.
Cherish both sets of salespeople. Give more care and attention to the lone wolves. Feel happy and lucky that you have them. They will take on more responsibility and uncharted territory in the future.
As a founder it doesn't matter much what functional background you came from. You could have engineering, product, marketing, or design experience. Comparisons are a helpful starting point. Compare each of the above points with your past functional experience and it will get easier.
Next Note: Designing a Repeatable Sales Process (coming soon)
Well-managed delegation is the secret to scaling. You can create a great company or a family by practicing the craft of scaling. This is why founders should learn to become great company builders. The first level of delegation is hiring a small team and leading the team. The second level would be to replace yourself and hire leaders to lead the sales teams. For most startups any further delegation will complicate the life of top salespeople. They will get frustrated and leave.
Here are some key tenets of assembling and growing a high-performance sales team.
Interpreting Sales Profiles
Begin by comparing it in a crude way to engineering profiles. The engineering function has two key profiles: builders and testers. The sales function has hunters and farmers. Real customer situations are a good way to understand the difference:
- Net-New (NN): Getting a brand new customer.
- Existing-New (EN): Selling a different product or service to an existing customer.
- Existing-Existing (EE): Selling more sold product or service to an existing customer.
Hunters do NN. Farmers do EN and EE. Learn to read sales profiles to separate hunters from farmers.
Founders with unconventional backgrounds have created some of the greatest companies. The same applies to the hunters. Farmer backgrounds exhibit more consistency. Both are crucial to your startup.
Designing Sales Compensation
Don't ever play with a top salesperson's W-2. This rattles the top performers and they start looking for a change. Before you take away something from salespeople, lay out what you will give. And give at least one quarter before taking. Two quarters is preferable. Common mistakes are changes in the territory or target customer list.
Hunters are the most prized and more expensive. Compensation should be different for hunters and farmers. Your top hunter should earn more than the top farmer. If not, something needs tweaking.
Follow the KISS principle. Keep minimal performance parameters to compensate hunters. For farmers, you can add more, but not much. Within the farmers, you can add more parameters for EE.
Top producers, both hunters or farmers, get very passionate as they start succeeding. And passion compounds over time. Recognize this pattern early on. And be more present around the top producers. Give them extra love. Increase their equity component. It will catapult their performance even further.
Identifying Top Salespeople
Simple and proven hiring criteria:
- Average Selling Price (ASP): For your product or service, ASP is like your ticket size. Look for salespeople who have sold similar ticket sizes. They are a good starting point with lower risk.
- Industry & Function: These two variables have limited relevance. It is far easier to take a salesperson who has sold a product similar in technology to your startup. And then you can assign them to sell to any industry or functional audience with the right pointers.
- Geography: It matters to a reasonable extent. Salespeople leverage their prior connections when they change jobs. It matters more for hunters than for farmers.
- Pipeline Conversion: Focus on salespeople with a higher pipeline to sales conversion ratio. This shows how much effort they put in to select their prospects. A higher pipeline conversion shows deep thinking, intellect and solid initial preparation.
- Product vs. Services: Rarely do salespeople transition between product and services sales. The ones who do are true evangelists. These hires are good at consultative selling. Give them thin air and they will devise a way to sell it. This is an overlooked poaching ground. Ability to source such hires will yield amazing results.
Varying Use of Pre-Sales Resources
Pre-Sales resource is a technical resource attached to one or more salespeople. Understand different styles in which each salesperson utilizes pre-sales support. Some salespeople need strong air cover and some are like lone wolves. By air cover, I'm referring to the presence of pre-sales resource(s) while selling.
Salespeople who need heavy pre-sales help will focus on the psychology of convincing. They will rely on a technical resource to cover the technical aspects of the product or service.
Salespeople who like to function with light pre-sales support are very curious. They like to go deep into the product. They will spend time with engineering and support teams. They will let pretty much everyone in the startup know about the help they need. They may seem like a cry baby, but remember that crying baby gets the milk. And don't treat this as a productivity drag. They are masters of getting things done (GTD). They will work across different sets of people towards the singular goal of closing a sale. They will craft a unique message and design a workbook suited to their way of selling.
Cherish both sets of salespeople. Give more care and attention to the lone wolves. Feel happy and lucky that you have them. They will take on more responsibility and uncharted territory in the future.
As a founder it doesn't matter much what functional background you came from. You could have engineering, product, marketing, or design experience. Comparisons are a helpful starting point. Compare each of the above points with your past functional experience and it will get easier.
Next Note: Designing a Repeatable Sales Process (coming soon)
Let's Talk: If you have a true experience that resonates, please send me an email.
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