For many bootstrapped companies, the founder is the sales organization. This setup may work well in the early years, but to grow meaningfully, bootstrapped companies have to build out real sales teams, and founders need to get out of the day-to-day sales activities.
We’ve seen many bootstrapped entrepreneurs head down this road and struggle. For those who successfully get out of day-to-day sales and get a real sales team in place, the reward is worth the risk and the investment of time. The following are several strategies we’ve used, or seen founders use, to help companies build smarter and more effective sales organizations.
Hire the right sales person for the job, not the ‘best’ salesperson
Not all salespeople are created equal. One software company we’re familiar with learned this lesson when it started building a sales team to sell a new enterprise-technology product. The company recruited a couple of swaggering sales execs from other large, enterprise-software companies, figuring they were perfect for the job. But they failed.
Why? The big-ticket hires were accustomed to selling products from a well-known brand name, backed up by millions in marketing and customer support. In their previous roles, these sales honchos didn’t need to educate the market on the nuance of their product, or build trust in their firm’s brand. They were closers, but lacked experience in the earlier stages of the sales cycle.
The company eventually figured out that it needed scrappier salespeople who were more technical, intimately familiar with the new product’s benefits and differentiation, and willing to dig into the details. This expertise would enable them to smartly educate customers about a product that, essentially, nobody had heard of before. The company adjusted its job specifications for the role, instituted more training, and quickly improved its results.
Obsess over your commission plan
Sales people are economic animals. If you provide the right incentives, you’ll get the results you want. But if you provide the wrong incentives, watch out. This is especially true for bootstrapped companies that rely heavily on commissions, instead of hefty salaries, to fund sales in their early days.
Some companies place artificial parameters around sales compensation. One popular one is that no sales person should be paid more than the CEO. Why not? Why cap your sales team’s upside potential? They should be incentivized to kill it.
We’ve also seen commission structures aligned with the wrong goals. One technology company in which we invested was paying sales managers commissions on recurring revenue for deals closed several quarters, or even years, before. So salespeople were getting commissions on accounts in which they were no longer involved, or were being incentivized to spend time managing existing accounts instead of closing new ones. It can be a very painful process to unwind an established commission plan, so carefully evaluate every scenario when you’re putting that plan in place.
Be relentless when it comes to using technology
Some sales people are reluctant to learn and use new technology to help with sales. They have a system that works and their goal is to stick with it as long as possible.
This approach is sure to leave you at a disadvantage to your competitors. Explosive innovation in sales-support technologies over the past several years has allowed companies to juice the effectiveness of their entire sales organizations, especially inside sales teams.
Advanced CRM features, presentation-sharing technology, marketing automation, website-tracking software and lead-management tools, among others, allow sales teams to qualify, engage and educate prospects more efficiently than ever before. Sales-collaboration platforms can reduce turnaround times on proposals and make it possible for sales, marketing and product teams to stay aligned throughout the process. They can also shorten onboarding and training cycles for new sales reps.
These technologies allow bootstrapped companies to hire fewer and more cost-effective sales reps, who will operate more efficiently. Use of the latest sales technology can also be an early signal to potential customers that your company is a professional, cutting-edge organization, which reflects positively on your products and services.
Building a sales team is an iterative process, and for bootstrapped entrepreneurs, there’s not much room for error. Focusing on issues like hiring, commission plans and technology-driven inside sales can help your nascent sales force grow smartly-;and bolster your bottom line.