Top 5 Sales Management Mistakes Early Stage Startups Make

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1. Hiring experienced people thinking they are buying a Rolodex of new clients.

RolodexI’ve made this mistake. I still kick myself for a hire in 2009. I should have hired a young, smart, interested candidate that never held a sales job before. Instead, I hired the industry veteran that couldn’t handle the ambiguity of a startup. In enterprise selling, buyers do not purchase a product because they’ve previously bought from a sales rep. The stakes are too high. The Rolodex helps with introductions to generate initial meetings. That’s it. After that, it’s up to the salesperson to identify needs, step through the sales process, and articulate how the product solves a million dollar problem for the client.

Pro Tip: Don’t buy into the “I really want to work at a startup” excuse for leaving their role at Big Company. If a candidate is interested the startup world, they should show that they’ve attended startup events and provided some informal advisory work to the startup companies. And most of all, that they should have networked their way to a job with one of those companies by now.

See Mark Suster’s incredibly awesome posts about these issues.

 

2. Ignoring the importance of behavioral profiles and tests.

Check out ZeroRisk, DISC assessments, and the Kolbe Index. Interviewing well does not mean someone is a good salesperson. In fact, these profiles will help you discover when a good interviewer is a bad hire…When hiring engineers, you can look at their code. When hiring a marketing professional, you can review their portfolio. Salespeople have their LinkedIn profiles in which every one talks about beating quota and being a top performer. How do you check that? Usually, you’re hiring someone that’s in a job, which means you can’t talk to their managers or customers. Bummer. Behavioral assessments identify the core traits of your candidates, then you can decide if those traits match with your company, market, and team.

 

3. Hiring only one salesperson. (Corollary: Hiring too soon.)

If your company wants to hire one salesperson, you should be ready to hire three. Hiring means that your company is growing. If you are an early stage company, hiring a salesperson signals that your company is nailing down its sales framework and now it’s just a matter of scaling customers and revenues. If you can only afford to hire one salesperson or don’t have a need for 3-5 salespeople, you’re not ready to scale. And thus, you’re not ready to hire.interview

If you hire one salesperson and their sales fall below expectations, how do you know if it’s the salesperson, your training, the product, the price, or the market? Hiring multiple salespeople simultaneously enables you to scale your training and provides a measurement cohort. When you hire a cohort, you have a means to compare performance and selling styles, plus making a change (and you will), doesn’t hamper your company building.

 

4. Telling everyone that you’re a sales manager at an early stage company.

Unless you are the company CEO, you are not a sales manager. By definition, early stage indicates a small, growing organization. Startups are not smaller versions of big companies. (See: Steve Blank)

calvin

Until there are more than five salespeople, the CEO should be the sales manager. Firstly, because the CEO is assumably the single best salesperson in the company who developed the customers the company has now. The CEO needs to hear directly from sales team about objections, product issues, pricing approvals, and market segment challenges. If the startup thinks they need to hire a salesperson so they can start closing customers, you have a lazy, scared, or stupid CEO.

A sales manager wedged between the sales force and the CEO creates an information filter. It’s not malicious – it’s human nature. By the time customer information reaches the CEO in this model, it’s been filtered three times – first by the customer who is trying to be nice, then by the rep, and then by the sales manager. Not the way to adjust rapidly customer needs.5.

 

5. Skipping sales training.

training2Proper sales training programs are external educational programs designed to introduce concepts and new ideas to the sales team that they can put into practice. Shadowing sales calls and weekly team meetings and one-on-one pipeline reviews are not sales training. At least twice a month, you and your sales team should attend webcasts or a training program, attending as a team in the conference room and away from their email and phones. No can absorb training while banging out emails or updating their CRM. At least once a quarter, the sales team should attend a live, onsite sales events.

A few I recommend:

SalesBuzz – http://www.salesbuzz.com/training/

Great Demo! – http://secondderivative.com/Workshops.html

Dale Carnegie Sales Advantage – http://www.dalecarnegie.com/events/sales_advantage/

Miller Heiman Sales Solutions – http://www.millerheiman.com/

Of course, you can also contact me at scott [at] salesqualia.com where we’re developing a Startup Sales Program designed specifically for startup salespeople and sales teams.

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