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Sales Management

Minimizing Sales Staff and Re-evaluating Comp Plans

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).

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Win, Lose, or Draw

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:

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You get no points for getting to the 1 yard line

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.

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"Doc… It's Marty… You gotta get me back to 1985!"

1985 was a great year for me.

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  • I started high school
  • I met my wife (although we didn’t start dating until 11 years later)
  • I was tapped by the Superintendent of Schools to design and build a computer system to run the schools grades, scheduling, rank, attendance, etc.
  • I started my first real entrepreneurial endeavor of some random computer consulting, training, and repair for some side dollars
  • Became one of the lead drummers in the school drum-core.

Fear is a four letter word

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

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The genius behind never logging into the software I was selling

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.

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No Single Strategy

I’ve recently gotten into answering posted questions on LinkedIn.  Its actually quite interesting to see some of the questions that people ask – many of them able to be answered with a simple Google search, but others are very thought provoking and I generally love to see a lot of insight from different points of view. 

The format on LinkedIn could be better in order to generate better banter back and forth – something more like Disqus comments – but nonetheless, I think generally its a good thing.

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Sales of a FREE product mirrors challenges of marketing

I plan to write extensively about the challenges that I have had in developing and managing a sales compensation plan on a free enterprise product. 

As a matter of introduction, I was talking with one of the other managers of my company on Friday, and while we were talking we came to one giant realization about sales compensation/motivation on a free enterprise product.  That realization is that enterprise sales becomes similar to a marketing challenge.  In marketing, you never know ahead of time what the right places are to spend your money.  Yes, you do market research, and you think hard about where to advertise, where to promote, etc.  But, ultimately, many of the places you promote your product are not right, and some exceed expectations.

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