As I've mentioned previously, learning how to sell is great preparation for starting your own company. Entrepreneurs who know how to sell are usually far more successful than those who don't.
However, knowing how to sell and knowing how to manage salespeople are two very different things. In some respects, entrepreneurs who know how to sell are at a disadvantage if they overestimate their own ability.
It's like when entrepreneurs with an engineering background start meddling with the details of product design, even though they haven't done any real development work in a decade. It's usually better to let the engineers do their job.
The same is true with salespeople. Entrepreneurs must learn to manage their sales team, not try to do their job for them. With that in mind, here are some common errors entrepreneurs make when managing their first sales team:
1. Leaving non-performers in place.
Having somebody in the group who can't sell creates a lower standard of performance for everyone. It also lowers the group averages and forces the rest of your team to do extra lifting so that the entire team can make quota.
Fix: Monitor new hires to ensure they have basic selling skills. Provide training on skills that are lacking. If performance doesn't improve, do everyone a favor and move the non-performer to another job.
2. Promoting salespeople into management.
The skill set required for selling and the skill set required for managing a sales team are completely different. Promoting a talented salesperson into a management position means the team loses a top sales performer and gains a lousy manager.
Fix: Create an alternate career path that will increase salespeople's earnings while raising their recognition level. When you need managers, hire people who are good at managing and coaching, rather than talented at selling.
3. Failing to control sales and marketing costs.
It's easy to be hypnotized by revenue, without thinking about how much money it's costing to make that revenue. Worst case, you can end up losing money on every sale in the vain hope of making up the difference by selling in volume.
Fix: Stop supporting activities that don't measurably increase sales. Hold marketing accountable for the money they spend. Consider implementing a commission structure that pays according to profit rather than revenue.
4. Not building a repeatable sales process.
Many companies hire self-motivated salespeople and let them sell however they deem appropriate. However, depending on the natural talent means every salesperson ends up "re-inventing the wheel" because there's no way to share what's worked and what hasn't.
Fix: Create a sales process that describes the various stages that buyers goes through and provide guidance on how salespeople can help buyers move from state to stage.
5. Frequently changing the compensation plan.
If the plan keeps changing, salespeople don't know what to sell. They sell products that aren't strategic and then can't make enough to make a decent commission.
Fix: Never make rapid changes in the pay plan. If priorities change, take a gradual approach, and get the sales team involved in determining what incentives will drive the desired behavior.
6. Creating sales stars at the expense of the team.
Many sales managers allow one salesperson to be the "star", while ignoring the hard work of other salespeople. The "star" gets all the hot leads and recognition while the rest of the team is overlooked.
Fix: Level the playing field level by handing out leads equally to salespeople. Through ongoing training and coaching, strive to develop the potential of everyone on the team.