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What sales is and isn’t — an entrepreneur’s guide

February 2, 2015

 

Sales. It’s a short word that implies a lot of things. As a career it’s mythologized in films like The Wolf of Wall Street and Boiler Room. It brings to mind people who get things done, get meetings “on the books,” and dollars on the bottom line. Images of power-suited men with strong tones and serious language are drummed up. Who doesn’t get floored when they hear Alec Baldwin’s speech in David Mamet’s Glengarry Glen Ross?

For many sales professionals “sales” can mean things like fiery prospecting calls that land a big client, heated negotiations that secure a solid revenue stream, or big-time commissions. Mostly though, for those of us on the inside and have peered through the looking-glass of sales, the word conjures more memories of hard-nosed grunt work. We’re reminded of putting together prospecting call scripts, writing email copy, calling trade organizations to get contact lists, or leafing through industry periodicals for whatever details we can use on our hours of talks that week.

The “real work” of sales is much, much different than the short word brings to mind, and if you’re thinking about putting horsepower behind your small or personal business in the form of added sales support then you should know a thing or two about what sales is, and what it isn’t. In my experience doing many types of independent sales work for a variety of companies I’ve come across a pattern: entrepreneur starts business, entrepreneur gains customers through professional connections, entrepreneur must devote his or her time to the technical side of the business and away from growing the business, entrepreneur looks outside to have someone “handle the sales part.” If this sounds familiar it’s because it happens hundreds of times a day on sites like Elance and Guru.

Too often, too many entrepreneurs turn to freelancing websites looking for a “sales guy” to bring business in the door without really know what they’re asking. The most productive outsourced sales relationships occur when the entrepreneur has a firm understanding of the difference between what falls under the “sales” umbrella, and what doesn’t; what is properly the job of a hired sales professional, and what isn’t. There are many working parts to acquiring new business, and making everything work together requires knowing how and where the parts are distinct but also where they fit together.

My view may not be the final view, but in my years of experience doing independent sales I’ve learned some of the most common errors that entrepreneurs make and hope I can help clear or at least point out the pitfalls or potholes on the path.

What isn’t Sales?

If you’re looking for a salesperson to step into the blank space labeled “sales” in your organization and develop customers for you out of nowhere by building a prospecting database from scratch and you think this can be done through a commission-only relationship then stop, because it can’t. Too many entrepreneurs think this “commission incentive” relationship is something enticing. It isn’t.

True sales professionals with the ability to produce aren’t afraid of commission relationships, this isn’t the problem. The problem is that the back-end work of the sales equation is much larger and more time consuming than many technically minded entrepreneurs think.

This pitfall mainly plagues entrepreneurs who are originally engineers or technicians. They see the value of their own work very clearly, doing IT, draft work, etc., and simply think that getting new clients is a matter of making a couple of phone calls. “I’m doing the work,” they think. “This guy is just putting more people in front of me, I’ll give up 5% to someone who does that.” It isn’t that simple.

Creating a sales process, finding sources for prospects and then organizing those prospects into usable data through spreadsheets or CRM software isn’t sales it’s business development.

Businesses have value for many reasons, and included among these are assets like contact and email lists, databases, sales scripts, sales processes, CRM organization and brand differentiation. Someone who is creating value for you that way is not a salesperson, that individual is a business development consultant, and a simple commission incentive isn’t going to cover those services.

If you’re an entrepreneur and you haven’t done the “back end” work yet then you should think about expanding your offer. A commission needs to be either very generous or your deal will need to include something else that will compensate the work being done to improve the value of your company. Typically, if an experienced salesperson really believes you have a good product or service they will ask for equity. An arrangement based on performance and generated business in exchange for commissions and equity is a decent agreement. As an entrepreneur you want this. You want your sales professional to be invested in the value they’re generating for you.

In a similar fashion to the above, there are many entrepreneurs who acquire a prospect list and then look to hire a salesperson to do a lot of calling. Without a doubt prospecting is an essential practice for any sales professional. To most, and especially those who work at an established outfit, this means setting aside time to look for new clients. That outreach can look like a lot of different activities, but typically it’s starting or continuing a conversation with someone who the salesperson believes would be a good customer but who hasn’t been sold yet. Contrast this with sitting down in front of a huge list of cold contacts who have never heard of the product or service they’re about to be pitched on and dialing hundreds of them one-by-one, in turn, for hours. Do you see the difference?

Sitting down to do meat-grinder outreach by calling on “leads” that haven’t been exposed to a product or service, who are cold, is not “sales,” it’s marketing. Many salespeople don’t mind taking on this duty as a corollary to their own main sales tasks, however, looking to hire someone who will mainly and only do cold-calling outreach means you’re looking to hire a telemarketer. Once again, looking for a person to work on a commission-only basis as compensation for essentially telemarketing your company will immediately clear the field of any skilled sales professional who values their time. If your product or service is really so good that cold calling will produce enough conversions to properly compensate a professional salesperson then you don’t need a salesperson because your product is going to be industry changing.

If you’re looking for a real professional with the skills to help bring business through the door, you’re going to need good marketing. Some of that might be telemarketing, but it will take a marketing budget. A good sales professional will have at least some marketing skills and be able to help develop strong marketing that targets your customers needs, but they’ll expect to be compensated for it. If you need this kind of work done, set aside some budget and pay the salesperson as a marketer.

There are many types of relationships here, and in my own career I’ve handled marketing activities such as telemarketing on cost per call, cost per hour, or cost per project bases. Realize that the salesperson is fulfilling two roles for you, both sales and marketing. Don’t have any illusions about your outreach, a good salesperson who handles marketing will be able to use your market data for developing campaign projections. If this is a preliminary campaign and you have no figures to work with yet, then this is a market test, and you should know that your marketing budget is going toward getting market knowledge, not to acquire clients.

Marketing is about generating leads for a salesperson to follow-up on. Advertising copy, leaflets, email & social media campaigns or telemarketing are all efforts to get in front of people who might have a need for your product. A lead is when someone responds to this marketing. If someone asked for more information on your website, that’s a lead. If someone forwarded your email through their organization, that’s a lead. If someone walked into your store from off the street because of your window display, that’s a lead. A good sales professional will be able to take leads and develop them into customers.

So what is sales?

Sales is the human activity of taking leads and developing them into customers through a process that identifies their need for your product or service, qualifies their value as a customer, and then secures their business by displaying the value of your product or service to them and removing any objections they may have to concluding the sale. That’s it.

This work goes by a lot of names: sales, hustle, a conversation, negotiation, client development, call it what you will, but the work is always the same. A good salesperson worth their salt knows that it’s his or her job to develop rapport with a lead, identify their unique needs, pain points, desires, etc., and then qualify whether the potential client would be a good customer. That’s what you’re getting when you’re hiring an independent salesperson: someone who’s going to first qualify leads and then turn qualified leads into customers.

A good salesperson will also have skills in upselling, getting referrals, customer service and negotiation. A great salesperson will also have skills and knowledge in marketing, copywriting, social media marketing, email marketing, and prospecting potentially valuable clients. A good entrepreneur will recognize the differences between all of these activities and know what skills his or her dollar is paying for.

Good luck!

So I hope that’s cleared up a bit. I know the hustle to grow a business is constant and sometimes frustrating. The thought of hiring someone to just “handle that sales thing” sounds comforting, especially when you think that it can be done by just giving them a slice of the pie in the form of a commission. However, without a foundation of systems and structures, solid marketing, or proper compensation these thoughts are fantasies, not solutions.

Your time is very valuable, and if you’re using it to focus on the administration or technical aspects of your business then you really could use an independent salesperson, and you should go after one. When you do, keep in mind what their job is and what it isn’t, and you’ll prevent a lot of frustration and lost time or money for you or them.

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