It's the startup life. The founders do the prospecting and close their first customer by themselves. When it is time to hire their first salespeople, they do so while remaining quite involved in sales campaigns – sometimes even too involved.
They justify this because they own the tribal knowledge, the company's story, the passion for its solution, its vision for the future – and because they’ve solved problems for existing customers This can work in the short term, especially when hiring junior salespeople.
However, soon enough, founders will find themselves unable to keep up – particularly when an additional investment round requires their attention. At last, it’s time for a proper sales delegation.
As Gizmo would say: “Uh oh; here comes trouble.”
Acquiring a sales team can be as tricky as setting your pricing strategy. You must select the right talent and ensure you set them up for success. To do this, you must first unload that tribal knowledge in a structured, easy to read and easy to digest consultative document (Playbook). Give it to your customer-facing teams and make sure it contains the following, at a minimum:
- Your USPs (Unique Selling Propositions): the features you provide that are unique to your company and that no one else has on the market. Features that have a tremendous positive business impact on your customers.
- The personas you address, their collective pains, and negative business impact.
- Your success stories and use cases – backed up with metrics or business KPIs.
The playbook is not only necessary to accelerate the onboarding of your recruits. It also ensures that each person in a customer-facing role will maximise your value, your reputation, and your customer engagement – at all times.
Grandfather: “With Mogwai comes much responsibility. I cannot sell him at any price.”
Nevertheless, a playbook is not a set of ground rules. If a deal closes and looks shady, if there was ever a side note, a verbal promise, or even a discount that was not too aggressive, you have a sales issue on your plate and…a Gremlin in the house.
Rand Peltzer: “So if your air conditioner goes on the fritz or your washing machine blows up, or your video recorder conks out before you call the repairman, turn on all the lights, check all the closets and cupboards, look under all the beds, 'cause you never can tell. There just might be a gremlin in your house.”
With a revenue operation officer's help, you can set some ground rules and gatekeeping steps to avoid proposals being sent before approval or thorough brainstorming. You can set a checklist of documents and requirements that must be socialised with your customers. These will ensure that your sales team knows what to do and what not to do at all times.
Chinese Boy: “Look, Mister, there are some rules that you've got to follow.”
More importantly, a revenue operation officer will review the compensation plan and ensure that the commissions are not only based on revenue but also discount level, margin valorisation, product mix, and long-term strategy.
Billy: “Yeah, what kind of rules?”
- No discounts without formal approval: you can also teach your sales team to create value scenarios where the customer can choose the size of the deal, not based on discount but a value for budget drawer quote.
- No side letters of any kind, no promises, verbal or by email (especially future features and roadmap estimates). Anything that must be committed to should be part of a formal agreement.
- Avoid short-term contracts, POC (Proof of Concept), and pilots at all costs. They drive away resources from engaged paying customers.
Chinese Boy: “But the most important rule, the rule you can never forget, no matter how much he cries, no matter how much he begs: never feed him after midnight.”
Instead, reward positive behaviour:
- If a customer has agreed to engage for three years instead of the typical twelve months, pay commission for the additional years.
- If a salesperson has maximised the value of a deal by selling additional expertise, thus securing the project's success, don't undermine the commission of such services vs. license.
- If a salesperson has developed and turned a customer into a lifetime champion that provides public testimonials, interviews, and webinars, reward your salesperson too.
- Last but not least, reward forecast accuracy. If you find salespeople who create pipeline consistently and forecast accurately, it is as golden as the size of deals they bring in.
“Perhaps someday, you will be ready. Until then, Mogwai waits.”
Caroline Franczia is a regular columnist for Maddyness and the founder of Uppercut First. Experienced in working for large companies such as Oracle, Computer Associates, and BMC, Caroline also lived in Silicon Valley for four years before moving to startups (Sprinklr, Datadog, Confluent) where she witnessed on the ground the benefits of a well-thought sales strategy. These are the foundations of UF: a structure that accompanies the European startups in their sales strategy by giving them an undeniable advantage in their go-to-market.
