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.
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?
I’ve been having this discussion lately with a number of angel investors about the title “sales” and the title “business development.”
In the traditional sense, business development people deal with creating channels, partnerships, and stategic opportunities for the company. Sales are the people that go and get people to give you money for your product.
Since “sales” can have, in some people’s minds, a negative connotation, there has been this trend to call sales people, “business development people” which I think is supposed to have the effect of making them seem less like people trying to get you to give them money. Business Development people often have no revenue quota, and instead are managed by objectives. So, by tagging someone a “Business Development” person, you, in theory, are making their contact with potential customers less threatening.
When I was selling software in my first start-up (Dynamic Mobile Data – wireless dispatch and vehicle location software), the world of software was very different from when it was today. Other than small consulting projects around my software, I was never selling anything for less than $200,000. The idea was to have few clients each year at a high dollar amount. I sold to Fortune 500 companies a large enterprise-wide solution. This included desktop software, server software, database set-ups, and more. Each of my software sales had an 18% annual maintenance which included product updates, phone support, and more.
As the credit crisis holds, many start-ups are going to start looking to make sure that they hold onto cash as long as they can.
That may include the decision to eliminate and/or outsource a portion of your sales staff. And, this can often be a very wise business decision. Of course, the cartoon to the right takes it to the extreme, but as start-ups and other companies decide to eliminate sales staff, the challenge becomes on how do you continue (and accelerate) your trajectory in sales with less sales staff and potentially less resources (minimized travel budget, etc).
I’ve gotten into two lengthy discussions recently about draw as a sales compensation component. Specifically, since I work with start-ups, the questions were around whether or not you should offer up a draw or not as part of the compensation package.
I have some very strong opinions about draw, and I want to start by going over the basics. Draw is compensation offered to a new salesperson coming on board. There is a “draw period” which is the time over which the draw is paid. (typically 3 to 6 months). There are two types of draw:
In football, it goes without saying that unless the ball makes it to the endzone, in your hands, then you don’t get any points. In sales, we have to remember that we also cannot celebrate until the sale is done.
It takes a lot of effort to prospect, pitch, and ultimately get someone to agree to buy your software. It often takes a significant amount of more time to get through the contract negotiations. But – none of this is a sale. A sale is only a sale once the money is in the bank.
1985 was a great year for me.
Someone asked me recently what I thought was the biggest impediment to sales.
I thought for quite some time on this. Would I say, bad presentation? Would I say selling to the wrong people? What about not asking for the sale – I’ve blogged on that..? Or even something out of the sales persons control like price or packaging or branding…
After much thought, I came down to one common theme on what I think kills a sale and also kills a salesperson:
FEAR
When I started as a sales rep at Air2Web, being a salesperson with a fairly technical background, I immediately asked for a login into the software so I could start playing around and learning the software. My boss told me that I would not receive, nor would I EVER receive a login into our software.
His reasoning? If I started to go into the software, I would focus on HOW the software could do certain things and IF the software could do certain things in a certain way – rather than focusing my sales activities on finding the right customers and identifying their pain.
