In speaking to so many start-up entrepreneurs, I get the same question over and over again:  what type of sales person should I be hiring?

This is a very interesting dilemma for start-up companies as they begin to build their sales plan, and as they try their best to get to profitability.  You have a serious choice.  Do you hire someone who is experienced in sales or do you hire a junior, super-energetic salesperson.

Of course… you want both!  And – often you can find that person in the experienced salesperson.  But what we are really talking about here is not energy level – its COST.   When I say experienced sales person, its just a euphemism for EXPENSIVE sales person.  A proven sales person, someone who has closed lots of very large accounts, has earned the right to have more base salary – especially at a start-up where there is so much risk – knowing this person can go to a more established company and make a lot of money.

This means that the tendency of a start-up is to find a less expensive sales person who they think can pull it off.  And many will be able to.  After all, I started my career as an entrepreneur and I was selling my software.  I had no experience in sales.  I was a programmer.  Yet, I figured it out and was able to close some very large accounts.  However, I lost a lot of accounts along the way, and also had some experienced sales people involved with the company that gave me gobs of great advice along the way.   You are going to be paying for on-the-job experience with a more junior salesperson, so how best to mitigate this and get the sales you need.

The options, as I see them, for a start-up are:

• If you have a CEO or other management type who has hard-core sales experience, then hire the junior sales person and save yourself some money.  And I mean real quota carrying sales experience – not just an ability to sell.  That manager can guide and train the salesperson, help them avoid the obstacles, power through objections, and quickly get up to speed on how to close deals.  Without this, you are likely to get lots of activity – but not lots of money.  A new salesperson typically needs their energies channeled – especially near the end of a sale because that is when it gets hard – and the path of least resistance will take their activities to new prospects where all conversations are lovey-dovey.  Managing activities and the pipeline are going to take a portion of the CEO or other management person’s time, but having management oversight will be critical – or lots of cycles will be burned without sales.

• If you don’t have a management team member that has done hard-core sales, then hire yourself a true VP of Sales.  If he/she is all you can afford, then that VP of Sales can carry a quota until he/she makes enough sales to justify another team member.  While this person will cost you more money than a junior salesperson, you will actually be spending money wisely.  This person should more than make up for their expense.  They should be able to set in place the right sales structure, and get some anchor accounts will will cement your sales strategy moving forward.

• Third option:  Hire the young salesperson, and then have an external advisor that is a sales guru (board member, outsourced sales management firm, partner firm) work with the sales person and manage their activities.  Get that person involved early on and the experienced person can shape the strategy and guide the junior sales person.  This junior salesperson, if conditioned to rely on the advice of the expert, can be guided by the senior salesperson in terms of what steps to take next, when to call again, how to handle certain objections, which accounts to prioritize, how to get past a gatekeeper, how to break a log-jam, when to negotiate on price, when to know you are getting the brush-off, etc.  He/she can also be the grey hair to call in when they call in their senior management for either a webinar or a face-to-face.  If you have someone committed to the success of your company, this can be a great option for a start-up.  If you have angel funding, you may learn that some of your angel investors can be, and would be willing to be, this person to you.  (Disclaimer:  I try to keep this blog pure sales advice – but I feel the need to disclose that outsourced salea management and advice is what QuotaCrush is about)

Its certainly a tough decision for a start-up, and the costs surrounding sales (not just salary but travel, entertainment, etc) are one of those difficult pills to swallow.  But like in anything else, its not wise to go cheap on the sales side, unless you can back-up the junior sales people with some real sales management.  I honestly believe that companies with great sales typically have solid sales management and structure behind it.

In the past two days, I’ve gotten a call from two of the banks that I do business with.  The first one, Chase, holds my home equity line, and I got a call from a woman who wanted to talk to me about my line.  The second bank is TD Bank and they hold my personal checking account and also my QuotaCrush business account.

What was interesting is that both banks were calling me with essentially the same exact pitch.  Both women that called me wanted to call to establish a “relationship” with me.  They wanted to let me know that they would be my “personal banker” and that I could call them with any questions and concerns and they would help me out.

I suppose that the banking industry is hurting for good customers now, and this is the effort that they are putting out there to try and establish the relationships that they should have been cultivating LONG before now.  I entertained both of the calls because I found it interesting and I wanted to find out what they were offering.  The fact is neither woman could articulate to me what they added benefit to me would be with them now as my “personal banker.”  They could set-up accounts for me, track down payments, etc.  When I said that everything they were talking to me about, I was already doing, online, without any interaction, and not having any problems, they still could not tell me why I should care that I now had a personal banker.  Clearly definining a value proposition should have been something that was in their pitch to me – but wasn’t. 

The reality is, they are trying to establish a relationship with me because the entire banking experience has become very disconnected.  I can get money from a machine, and I do all of my banking on-line.  In fact, I can’t remember the last time I went to a bank and went through the second set of doors – I typically stop at the ATM and don’t go further.  As a result, I don’t really care who my bank is or where they are located.  I only care that they are solvent and that they make things simple and easy for me.  I would switch banks / mortgages / etc. tomorrow if I found a better deal.

So, the banks are reaching out to establish a relationship which will make me more connected to the bank, and less likely to leave.  They can step in and fix problems, and make me a happier customer.  Today, I call a general 800 number and placed in a queue.  Perhaps tomorrow I could call one of these women and have personal attention.  (As an aside, one of the women spoke in broken English which was not very convincing that I would have an easier time).  Both called me from branches close to my house, and explained that I could come in any time and talk to them about any issues I would have.  Other than this, I could not figure out what the benefit would be to me – and really I am not looking for this in my bank.

As a credit to both banks, and why I’ve been with both of them so long, is because I have not had many issues calling the 800 number and getting my problems solved.    But… honestly, I would leave both in a minute if they started to charge me fees, or make my banking experience more difficult.  I moved to TD Bank 5 years ago because Wachovia decided to add a $3/mo fee to on-line banking.  It took me about an hour to move all of my business over to TD Bank (Commerce Bank at the time), switch over Quicken, and start banking somewhere new. 

That was a long pre-amble to the point that I wanted to make  - when you make a sale and get a new customer, you should be thinking about the relationship that you want to have from the beginning – not once you are into it.  By making sure that you establish the right relationship from the beginning, you are more likely to have a customer for life.  You will get the feedback that you want BEFORE you hear that they have cancelled your service – not as they are walking out the door.

In the 21st century, social networking platforms offer us lots of ways to establish great on-going relationships with our customers, and we need to use these tools to their fullest to make sure that we are engaging our customer base and making sure that they feel part of the solution and not just a number. 

Its possible that its not too late for the banks to establish a relationship with me and prove to me that they can offer me value that another bank cannot – but as you can see – I got the same pitch from two different banks within a week - so I’m not sure that this pitch is going to sway me one way or another at this point.  It makes me think that all banks will offer the same product.  Had the initial interaction with a bank been one that made my life so much easier and convinced me that they would be there for me – then I would have been better sold and committed to one company.

Are you establishing the right interaction with your customers?  Do they believe that you care about them?

If they don’t then you didn’t do your job as a salesperson.  If they do, then you will have a customer that will stick with you.

This morning I had a sales meeting, and before I went I sent out a tweet that said “business casual sales meetings means I get to wear my really cool Christmas ties almost never… I think I’m going to wear them anyway…”

So… I go to my meeting, and the very first thing the man says to me is, “Interesting tie choice. I’m curious as to why you would wear that.  I think perhaps you didn’t think about whether wearing a Christmas tie would bother me.”  I was caught quite off-guard and for a moment thought perhaps he was following me on twitter and was making a joke about my morning comment – but alas he wasn’t.  He was truly upset at my tie choice.

He had a traditionally Jewish sounding last name, but I honestly did not think that anyone, regardless of what they celebrate or don’t celebrate in December would be offended or upset at a Christmas Mickey Mouse tie (actual picture above).  I expressed to this gentleman that I honestly thought it would show my fun side and my holiday spirit, but did not think for a second that it would offend or upset anyone.  We moved on from the tie discussion, although he brought it up at least four more times during our meeting making, “just like your tie choice” comments.

When I wrote this blog post about salespeople protecting their on-line identity, I talked about how you shouldn’t make all of your public rantings and opinions part of the public domain because all of that is fair game in the sales cycle.  Well, in a way, I did that today.  I screamed to the potential client that I celebrated Christmas and was proud of it.

I think that this example points out someone at the extreme, and not the normal mainstream reaction to a Christmas tie.  (although I’d love to hear from all my Jewish friends on your take on this).  Nonetheless, it was a reminder that you need to do your homework, and you need to make sure that you understand your audience.  I took my eye off the ball, and got smacked for it.  This is certainly not as bad as getting caught groping a cardboard cut-out of your boss’ choice for Secretary of State, but it was still bad.

When we express our personal views, they become part of the sales process – for better or for worse.  As small as a comment, tweet, blog post, facebook status update, online photo, email, or other action may seem, it can affect a sale.  My tie choice, affected this sale.  As small as that might seem, it became a factor.

I can guarantee you that my Christmas ties will stay in the closet for sales calls from now on!

The end of any quarter is deal-making time, but December is the best of them all.  I was talking to a salesperson the other day whose opinion was, “nothing happens in December”  Ah, how UNTRUE!  In fact, when other people slow down, its the chance to make a big deal.  But… there is a problem with December that puts sales people against sales managers and while both are aware of it, it certainly creates problems for all sides.

The problem is this: most sales plans re-set at the beginning of the year.  January is a fresh start.  Close a deal in December, and the impact of that sale typically gets wiped out in only a few weeks.  If you are already above quota, you get the sale at your accellerator, but if you push the deal until January, you have a running start towards next year’s accelerator.  If you are behind quota, you aren’t going to get it at the best commission rate anyway, so might as well wait until next year so you won’t miss quota two years in a row – and you will show good progress for next year.

The bottom line is… for a sales person, December is a not a good month to close anything.  Holding the sale until January is a much better option.  Unfortunately, with sales managers and companies trying to get the best financial picture for the year, this proves to be an interesting dilemma. 

The initial reaction of some companies is to put negative incentives in place for the salespeople, to encourage December sales.  Sales that are on the 1 yard line sometimes will get negative treatment in January, to punish salespeople that don’t get that sale in December that the company feel they should have (which may or may not be due to the above problem). 

I find, in building compensation plans, motivation always works better than punishment.  Regardless of what has happened in the past, if you want a salesperson to sell, put the carrot in front of them.  The better solution for companies that want significant numbers in December, is to reward extra.  Some ideas:

• Bring all salespeople to the top commission rate regardless of level
• Sales contest for December outside of quota
• Pay commissions on December sales – and provide 1/2 quota credit for next year (not a double commission – but for every dollar sold in December give $0.50 quota relief for next year so its easier to reach quota in the next year)

I always think that you can get amazing things from salespeople if you put the right incentive in front of them. 

Now, the other side of the coin is this:  If you are a salesperson who is behind, and you are looking for a chance to shine – and perhaps earn some silver bullets for the next year… get out there and close that December deal – there are dollars to grab.  It will show a real effort, and earn major points for putting the company above your own personal gain.

Anyone else have any interesting ways to solve the December sales problem?

Sales professionals live and die by their network.  Becoming a very successful salesperson typically means that you can use your network to its fullest to get and GIVE introductions, referrals, and more.  There are dozens of posts on ways to build and maintain your network (and I’ll likely have several posts here on this), but what do you do when you want to ask someone in your network for assistance in making contact?

Early on in a professional sales career, the mistake that salespeople often make is to badger the people in their network – or ask unreasonable things of the people in their network.  Think of the typical pyramid scheme salesperson.  They typically continually hawk their products to their friends, family, neighbors, etc. until those people cringe when they hear their call or see them face-to-face.  They are actually taught by the people at the top of the pyramid to rely on their closest relationships for sales.  This is completely the wrong way for professional sales people to behave.  You should rely on your network to help get you closer to your sales – but never to get the sale for you.   You always need to remember that it is YOU that needs to get the sale.  Your network is but one tool in your bag.

If you rely on sales to live, the last thing you want is for people to avoid your calls, avoid you at networking events, and delete your emails.  You want them to embrace you.  In order to do this, you need to get into their shoes.  What would make YOU do something for them if they were calling you?

Here are my three basic rules for making contact and requests of your network:

1. Ask for something EASY:  Ask them if they would forward your email onto the decicion maker, ask them for the decision makers assistant’s name, ask for some (publicly available) information on corporate goals that might help you build a better pitch
2. DON’T ask them to get you a meeting.  (rookie mistake):  Never ask this person to get you a meeting with a decision maker.  This is putting the task of getting in the door on them.  Asking them to forward your email with a short introduction is easy and puts the ultimate closing pressure on you.  When you ask them to get you a meeting, it puts the closing of getting the meeting on them.You are asking them to do your job – not to help you out.  If you put yourself in their shoes, imagine if someone in your network asked you to get them a meeting with your CEO as opposed to just forwarding an email onto them and then letting them take care of getting the meeting.  The email is a great “in” and you haven’t potentially affected your relationship with the person in the network.
3. ALWAYS offer something in return: A referral into your network, posting on your blog, information that will help them with a project they are working on, etc.  If this person is unwilling, or un-able to help you out this time, providing them some assistance in their job

If the person you contact is inclined to go further in their assistance, they will.  Perhaps they will get you that meeting.  But because you asked for something that is easy for them to do – they will not feel put out.  You never can know the internal politics that may be going on.  Its possible they are saving that silver bullet for another time, maybe they recently had a bad performance review, maybe they don’t think your product is right for their company (but still like you and want you as part of their network)..

I recently spoke at the NY Xpo for Business at the Jacob Javitz center on the topic of “Knockout Sales Presentations” and one of my tips that drew the most controversy was when I said, “During a sales presentation, you never, ever, ever, ever give a demo.”

Before I fully explain my position, I want to give credit where credit is due.  Much of the basis of my presentation comes from the Pitch Coach himself, David S. Rose, who provides advice to entrepreneurs looking for angel investors.  If you want to view his presentation, its on his blog here.  What my presentation did was rather than look at presenting to raise money, it was how to take theses ideas and apply them to making a killer sales presentation.

I plan to post on all of the points that I brought up in the presentation, but I’m going to start with the most controversial point: NO DEMOS!

When I mentioned this in my presentation, I immediately had about 10 hands go up to challenge my claim.

“But… my company sells video conferencing, and I have to show them how my quality is better than my competition.”

“But… unless I show them my great interface, they won’t understand how I’m better than competitor X.”

I challenge all of this.  If you can’t articulate the value that you provide over your competition, or that value you bring in general without a demo, then you aren’t going to get the sale anyway.  If you make video conferencing software, then tell me that your algorithm was developed by listening to the mating calls of owls or whatever makes your technology great.  If I can grasp and believe WHY you built your product the way it did and am sold on your thinking, then the demo is icing.  If I don’t believe it, then the demo is wasted time.

Demos are a chance to screw up.  What if the product doesn’t work during the demo?  You lose all credibility with the prospect and you killed the sale.  Convince the customer of the value that you bring to them, and you don’t need a demo.  If you convinced them of the product benefit, then the demo either confirms the sale that is already won, or it kills it.

Why are salespeople so shocked by this statement?  Because giving the demo is easy.  It takes up a lot of time in the presentation.  You feel busy, as if you did a lot to move the sale forward.  But you didn’t.  Spend that same time focusing on how to convince the customer of your value and save the demo for after you’ve sold them on the value of your product.  I have even gone as far as to say that software salespeople should not even be given a way to log into their software.  When you focus on the features of your product, you take focus away from the value that you bring to them.

I sold a $2M contract before the customer ever saw the software.  I convinced the largest marketer in the world to trust me for SMS voting on a live TV program without ever seeing the software.  What did I talk about in my sales presentations?  Why my company was great.  Why we were different from the competition.  How we were providing great service for their competition, and other companies in industry.  How our algorithms would protect them, etc.  THESE are the things that matter – not what my interface looked like.  The interface can change, but the reason we were a great company – is much harder to change.