As I was relaxing last evening, I remembered an old adage that one of my mentors said to me.
You have two ears and one mouth for a reason. You are meant to use them in that proportion.
What a simple phrase that says so much about sales. Listen twice as much as you talk. When you listen, you can craft your sale around what the prospect’s real pain is – why they would even think about buying your product.
It’s great to get back to some blogging. I’ve got about 10 major points that I want to post here – but its been a very busy two weeks – and its not even the end of a quarter!
I’m currently sitting on a two year post as a trustee of Stevens Institute of Technology which is my alma mater, and just one amazing university. The trustees had a two day meeting that co-incided with commencement at the university, and I had a lot of time to talk with my fellow trustees, and as I talked about my current position, and the challenges of selling FREE software, I was amazed at how quickly most of the people that I talked to just understood it.
One gentleman that I spoke to is probably in his late 70s or early 80s. Here was a man who sold his business and essentially retired from day to day work before companies had web sites – and he instantly understood (and already knew) all the concepts of Long Tail, and how technology has changed how we need to think about how to sell and pay for product. I was instantly able to chat with him about challenges and opportunities in motivating and driving a sales force focused on a free product.
Essentially every single person I spoke to over the past two days understood the mission of my company to provide free enterprise grade software and what that means in terms of my own challenges as a sales manager – and more importantly – the challenges of my salespeople as they go out and try to get people to accept this free product.
So this brings me to the main point of this short post. It was nice to see that there really isn’t a generational divide in terms of how things should or should not move forward. It is certainly an “innovational” divide. These very forward innovational people could clearly understand what the future was – and didn’t have any issue comprehending it.
I think this article is amazing. Its quote refreshing to read an article about the future of America that is not pessimistic. As an entrepreneur at heart, I think that this is dead-on.
As I’ve mentioned, I’m currently running sales at Angelsoft, which provides deal-flow management software to early stage investment groups like angel groups, venture capitalists, incubators, business plan competitions, etc as well as software and services to the entrepreneurs with which they interface. The sales team I’m managine is really bright and really enthusiastic, and I’ll be blogging about them a lot as I relate what’s going on at Angelsoft to other stories and ideas.
It certainly very enjoyable being at Angelsoft, since I spent so much time in the entrepreneurial space raising money, building a buisness, etc. Getting a chance to work with the VC and Angel communities in a new way has been and continues to be very rewarding. I have also, I hope, brought a great perspective into the team from the entrepreneur side which is great because we are actively expanding our services to entrepreneurs thru OPEN-deals.
My bay-area sales rep recently blogged on the profile of an angel investor and I think the post is fantastic in helping to understanding what types of people invest in start-up companies with such high risk. Selling to these people and their organizations has often been referred to as “herding cats” because you have such a wide variety of personalities and backgrounds so the sales process is very different.
Also, since our software is free to angels and angel groups, it makes sales that much more of an interesting exercise. I’ve had to deal with what the sales process looks like when sales people are “selling” a free product, compensation issues around a free product, and motivation behind selling a free product. How exactly do you match revenue targets around a customer sale that doesn’t directly tie to the revenue received.
I plan to explore this topic in great detail as I really think that it is something that is very new in Web 2.0.
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Salesforce.com is the WORST salesforce tool, except for all the others.
I have a lot of gripes with sales force tools, and I’ve yet to find one that is actually functional for all people in the organization. I think that sf.com did one thing well. They provided a tool that lets sales managers get a pipeline report and since its an online tool, the minute a sales person updates their information from anywhere in the world, that pipeline is up to date. No syncing – no installs, etc.
However, the tool is so cumbersome and hard to use, I hardly think they ever actually sat down and USED the tool themselves. Salespeople would be MUCH more willing to use the tool and put information in if the tool was quick and easy to use. The interface is atrocious. (The new User Experience guy at my company is phenominal and I’d love to get his thoughts on it).
When I was a salesperson, I HATED using salesforce.com. I used anything and everything outside of the tool and then only put in what my boss required me to put in. I know thats what my salesguys do now.
I’m experimenting with some new tools now like HighRise and Pipeline Deals to see if I can find anything more functional – and less restricting.
I’ll explain my complaints in more detail in future posts. And I’ll also review both of the above products.
When dealing with large enterprises, its my opinion that a salesperson should never offer up a free trial. If the marketing department wants to deal with that and then pass off a qualified lead to you – great but the blanket free trial has no merit in sales – unless of course you are salesperson that doesn’t want to make money.
Now, this is not to say that you shouldn’t let large companies get their feet wet, but the idea is to get the commit upfront otherwise you will see the trial going much longer than you would like it to go.
When I ran my own company, everyone wanted a free trial of my software. And, I understood why. The software was a large dollar commitment. It has huge switching costs if it didn’t work so they wanted to make sure that the software would work the way they wanted it to. It also meant committing to large numbers of mobile devices which themselves were expensive.
What we did to overcome this was the “out clause” We provided them a contract which had to go thru legal which had them agreeing to purchase the software at a negotiated price, and they would have x number of days to back out of the deal.
We would set an installation, a set of acceptance criteria, and a series of installments or objectives which varied on the type of installation, etc. – details which are not important to the basic topic at hand.
Typical deals would look like this (or something similar):
$x for the software. First installment of $y is due on installation.
Company has 60 days to evaluate the software and accept or reject the software.
If rejection is made in 0 to 60 days after installation, 100% of the first installment is refundable
If rejection is made in 61-90 days after installation, 75% of the first installment is refundable.
If rejection is made 91-120 days after installation, 50% of the first installment is refundable.
If rejection is made 121+ days after installation, 0% of the first installment is refundable.
What I was essentially doing was getting the hard stuff – the legal, the pricing, etc. out of the way first. Sometimes, I didn’t require an upfront payment, but I had a pain payment after the “free trial” was completed.
Since the refund rapidly slipped away, you would be amazed at how this would force the hand. While this method was a more difficult sale than just agreeing to get the software in their hands, I would argue that it made for a lot of less wasted time. In the early days of my company, I was thrilled when someone would just look at my software and was happy to give it to them in hopes they would buy. But, with the pressure taken away, it was much harder to get them to get going. Running a contract thru legal and purchasing, etc. is hard and a customer will typically avoid it as long as they can. Forcing it at the beginning is the best way to make sure you work with people who are truly serious about BUYING from you – not those that just want to PLAY.
How simple and over stated is this basic premise of sales, yet how often is this the major issue with a salespersons performance?
If you are a sales person and you see that you are not crushing quota, ask yourself if you are asking for the order. With Web 2.0 sales, and other products with low cost trials, it’s way too easy to just have your prospect drag you out longer and longer and longer. And, if it’s a big prospect for you, it’s a scary proposition to have them not do business with you. But, I say, if they are not committing and are not willing to commit, then they aren’t doing business with you anyway and you need to move on.
Figure out what the appropriate trial time is and/or the number of meetings or calls you will take with the prospect and then insist on the order? And, never leave any meeting or a call without asking for the order. If you don’t ask, you most certainly wont make the sale.
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I wrote this post and then noticed it was a topic on Fred Wilson’s blog a few weeks ago as well. http://avc.blogs.com/a_vc/2008/05/ask-for-the-ord.html Its really interesting that this is such a wide spread problem. In this case, it was an entrepreneur looking for an investment. If you an entrepreneur and you can’t ask for the investment dollars – that’s an even scarier proposition because that is a sure sign you wont make your targets since you are afraid to ask.
So far in my latest gig, I am happy to say that I have not heard my sales people ever complain about grunt work that had to be done in order to get the sale; however, I can tell you that in my career I’ve seen it a lot.
Having always worked at small, struggling companies, I have always worked in an environment where everyone did 3 jobs because the money just wasn’t there to hire everyone that we needed in order to get things done. In these companies, there is rarely the correct infrastructure, or structure to have a salesman just walk over with a signed order and place it in a wire basket and know that it is going to get done. If I ever work in this type of environment, I think I would be bored to DEATH. As an entrepreneur at heart, I really don’t think I can ever be where the fire isn’t there.
At one company in particular where I worked as a sales rep, the company was fantastic and I loved working there – but there was NO structure in how to get a sale through the company. I worked in New York as the north east rep and the company was in Atlanta. I was working on some massive deals like Proctor and Gamble, NBC/Universal, GE, Citibank, Viacom, FedEx and others. When I started working on these deals, I was thrilled to have gotten us in the door, and through the initial screen, and now having these large companies seriously considering us for their business. Getting a start-up or small business at the same table as industry giants is something I pride myself on being able to do well. However, these guys typically work with other companies of their size and stature and what irritates them about working with small companies is the lack of structure and process. (hmmm… great topic for a separate blog entry). So, a sales person needs to make sure that the large company gets the customer’s process followed whatever it may be and there may not be someone in your company that is going to do this. So, what I would do very often, is get on a plane down to HQ and essentially walk the RFP, contract, etc from desk to desk and stand behind people until they did what I needed them to do. If I didn’t fly down, I would be on Skype, the phone, SMS, etc. until I got what I needed. I was never nasty about it, and people were generous with their time and information. I was always understanding that they were busy too – and my commission was not the most important thing to them.
Which brings me perfectly to the point of this entry: Did I like the fact that I had to do all of this? Did I like that sometimes, I even had to do other people’s jobs for them so that it got done? No. But, there is NO place in a growing company for a prima donna salesperson. If you want the commission, then get off your butt and help the sale all the way through. If you sell software, go do the installs. If you sell high-end landscaping items like trees and bushes, then put on some gloves and pick up a shovel.
Your bank account will be thanks enough.
Let me say that I am one of those people who HATES taxes.. and really cannot understand any reason why we cannot stop spending tax money on moronic things, reduce the size of our government, and lower our taxes – but this blog is NOT about my political views, its about my rumblings on sales and sales management.
So, then why am I happy about my tax bill and what does it have to do with sales.
Well, in my entrepreneurial days, I worked a lot with a fantastic sales man. He sold pen based computers and was enormously successful in his endeavors. He was probably the first salesperson I encountered that I admired. He certainly embraced much of the other characteristics that I will or have blogged about here and I took a lot of lessons from him.
One day, he and I were at lunch and I made some opinionated comment about taxes. Yes, it was early in my career and I had not yet learned the humility lesson yet (not that I’m perfect now) – so my views were, of course, perfect and all others who did not embrace my ideas were stupid. I’m not sure where he sat in his political views because he HAD learned the lessons about not mouthing off your opinions (after all he was enormously successful in sales). He simply looked at me and said, “Mark, I have to tell you that I am thrilled that I am going to be paying a lot of taxes this year. Do you know why? Because it means that I made A LOT of money!”
I’m sure he, and every other successful sales person would love to see lower tax bills and are championing candidates that will help us keep more of our money – but in the mean-time, when we pay that enormous tax bill, it’s because we are being successful!
Sales is one of the few careers in which you are totally in control of the amount of taxes you pay. If you want more money – well then, get back to the phones, get back in those board rooms, and “get the signature on the line that is dotted!”
I am certainly hoping to be paying a lot of taxes this year. I am managing a phenomenal sales team. I set a goal for them this year that was at a 15% increased pace from last year. The team had never had a real well defined quota plan and I wasn’t sure how they would perform against it. I am proud to say that they are currently on a pace that will have the team quota beat by 242% and every single member beating the goal. I suppose I need to make the challenge even harder now…
I joined this great company, Angelsoft, 7 months ago as their VP of Sales and inherited this really awesome team. As I started to show these guys how to really crush through their quota objectives and make some serious cash through selling, one of my guys said that I should be running a blog about this stuff.
Historically, I’ve always been the early adopter and ahead of the curve in technology. Heck I even started out as a programmer. But, what I realized after joining this company that as life has been happening, and I’ve been emmersed in sales and sales strategy, I’ve gotten out of actually doing the cutting edge stuff – happy to sit on the sidelines. Why have I not been blogging for years? I certainly have a lot to say! Sure, I’ve got three kids to worry about – but its really no excuse.
So, here we go. I plan to blog on lots of topics but mostly my ideas and opinions on sales and sales strategy in this new Web 2.0 world. Hopefully bringing old ideas forward – and perhaps bridging old ideas to meld into the new model of commerce.
I won’t say that I’m the foremost expert, and everyone can always learn more, but I have had some success. Suffice it to say that I’ve had several great mentors who have taught me what I know. Hopefully, when they read this, they will feel proud.
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