Almost every client we work with — including us — has fallen into some version of this sales trap. Sound familiar?
Even the brightest of us are not masters of foresight. Even if we’ve read brilliant business authors and heard valuable warnings from more experienced executives about things to avoid.
I’m going to add my voice to the “cautionary example” chorus and try to help you avoid five big mistakes that small/medium-sized business leaders make when revenue is not growing as expected. (If some of this sounds familiar, it’s because every single one of our new prospects describes being affected by some variation of my Five Major Traps. You are not alone. I’ve fallen into every one I’m going to describe.
Hiring someone to handle sales on their own is first on my list of sales traps.
If you can fund a robust sales department or have found an executive that brings in all the revenue you want, then you can skip this article. Otherwise, read on.
Here’s the core problem with hiring the World’s Best Sales Director to meet all your new business needs: they often fail because this role is only one part of an effective sales and marketing machine.
I once worked for an event production company whose owners found themselves spending all of their time trying to get new business. They’d hired a very green kid (me) and brought in a sales coach. I had zero idea what I was doing, despite having a natural talent for sales. But the future of this company rode on me filling the pipeline and closing deals on my own. This was insanity. The coach was great, but he didn’t stick around long enough to dig into the underlying market issues that affected revenue challenges…
The good news? I cold-called my way to a close on a $750,000 new product launch event for an Eli Lilly blockbuster drug. I’ll admit that I did get lucky, which isn’t really a strategy. The bad news? I left the company a year later for a better opportunity. The management at this company was fully devoted to the “build it and they will come” strategy and didn’t really respect salespeople. In fact, they resented having to do any outreach at all. It was a lonely place to be.
The fact is, anybody you hire who is successful as a solo sales contributor is likely to leave to find something better. This is a major business risk for you, because when they leave, your revenue and sales processes go right out the door with them.
Here are some other major challenges you face with the “single hire” sales approach:
• Successful outbound sales programs require deep strategy (to determine differentiation factors and figure out product/market fit), complex digital marketing support and content support. There’s no way a single salesperson handles all this with time left over to close deals.
• It is extremely difficult and time consuming to vet and hire the right salesperson. In fact, you aren’t really hiring a “salesperson.” You will need a business developer to prospect for opportunities (hunter) and a sales executive to create opportunities and close deals. Rarely does combining these roles work.
• It will take your new hire six to eight months to learn the nuances of what they’re supposed to be selling — at which point they might leave anyway and leave you at square one. The real truth is that your business developers don’t need to be deep industry experts. That’s not really their role. (See my post on what my organization has learned the hard way about consultative selling.)
• Feel like managing these people? That’s a time and energy headache equal to your original problem. Want to offload it to a sales manager? OK, but add serious dollars to your costs if you want a good one. If you already have an effective sales leader, will they spend all day prospecting and finding new revenue sources?
• Having salespeople rarely equates to having a sales department; if your hired gun has never been trained in building and running a sales department, you’re just throwing money away.
Two More Painful Examples of the “Single Salesperson” Truth
I’m going to visit my case files here and give you two more vivid illustrations of the pain caused by Trap #1.
One Person Does Not a Department Make
We once engaged with a management consulting firm with deep expertise in helping manufacturing companies make smarter capital investment decisions. The principal had struggled to maintain his record sales performance from the year before.
He had hired an incredibly successful sales hunter and she had succeeded beyond his expectations. When she left, so did the entire sales department. He had no idea why she was successful, had no visibility into the value of his pipeline and lacked a process to replace her. His numbers had nosedived. He should have assumed that she would leave at some point; then he could have monitored her success, seen what worked and used the data to build a platform for repeatability.
A Disaster Inside an Implosion
This one hurts even more to think about: I was hired by two founders of a startup database marketing agency. Or was it a marketing analytics company? Maybe more like a research company? The best description was a disaster waiting to implode. These guys were right off the banana boat in terms of sales, but had years of experience shooting darts at their bosses, who were great rainmakers but not as good working an Excel sheet or SAS software suite.
The CEO told me that his goal was to build the company and be the first to leave. My job was to make this happen for him as fast as possible. His job was to work with the clients.
It was a tension-filled environment right from the start. I suggested a positioning statement exercise. They wanted a full strategy similar to the sort of stuff they put together for clients like Fortune 100 cable companies. They actually gave me an example of this sort of strategy. What a huge waste of our time.
We did write a bland and useless positioning statement. It’s ironic that marketing MBAs like them had no idea how to formulate or write such a statement. I almost laughed out loud when they actually put it in a file cabinet drawer when it was finished. (“Yup, got that checked off the list. Now go make some cold calls, Larry.”)
The central problem here was that nobody had any idea what the company offered and why it mattered to anybody. You fall into Trap #1 when you try to solve it by hiring one person to solve it all with sales. It doesn’t work that way. The entire company works together to pull together business, product, message, sales and marketing strategy with prospecting and closing approaches. Everybody is involved in execution, although the sales team takes the lead. All businesses are sales businesses. Sales is the most important thing happening in the company. It’s the heart of the culture, not somebody you leave in a cubicle to work revenue out on their own.
After a few months I was blamed for the failure of the sales effort. The company closed soon after I was fired for cause because I forgot to send an NDA before a proposal to a client that I did close. The CEO and his partner saw a “cover up” and fought me in unemployment court. Yeah it was that bad and I did try and bury my mistake. It was that bad a culture and legal capabilities were considered more important than sales.
The owners never understood that their inability to avoid this sales trap caused their company to fail. After deciding that I was another one of those “losing” salespeople, they started to closely monitor my call volume and thought that if I made 100 calls a day instead of 20, things would change. The bad news for them is that they are probably still stuck working for the man. It didn’t have to turn out that way.
The sales hunter approach looks seductive when you consider the money and effort necessary to put repeatable processes and proper operational support in place. But it’s an expensive and risky shortcut to nowhere. It almost never works.
Your job is to avoid this trap. Make sure that if you hire a salesperson, you also have a team to handle messaging, prospecting, sales, marketing and content campaign strategy. And somebody in the company that knows consultative sales and can build and manage a fully integrated sales and marketing process and the underlying technology required to make it all work.
If you are blaming a salesperson for lack of revenue growth, point the finger back at yourself before you condemn their efforts. It was you who made a big strategic error by putting it all on their shoulders in the first place.