You have successfully crossed the chasm (if you don’t know what that means, stop reading and go buy this book immediately) by building an awesome product, choosing a target market, positioning the product, building a marketing strategy, and choosing the most appropriate distribution channel and pricing. Your scrappy, generalist business development team got you the early adopters, and there is tangible interest from the early majority. Next billion dollar IPO, right?
Not quite. Interest and attention from the early majority is one thing, but capturing them, let alone capturing the late majority and laggards, takes something few startups know how to build, a professional sales org. But whenever I say the word “sales,” entrepreneurs have a violent and negative reaction, invoking Alec Baldwin’s Blake character in Glengarry Glen Ross (best sales movie ever, by the way), laughing at his brass balls, and frowning upon his exclusionary coffee practices.
I argue that if you don’t build a professional sales organization that is equipped to go after enterprise clients, you might as well turn off the lights and go do something else. The fallacy from Field of Dreams (worst sales movie ever, by the way) that “if you build it, they will come” makes me want to tear out my few remaining hairs. The pernicious idea that you can “grow hack” your way to revenue by developing “enterprise virality” features and just see the money roll in could not be more damaging to companies. Growth hacking in the enterprise is one thing, and one thing only: sales.
The good news is that building a competent enterprise sales organization is not a black art, but a well-defined and documented practice. The org basically boils down to this:
Hiring for Enterprise Sales: Specialize Your Four Core Sales Roles
Let’s start with a few definitions:
- Inbound sales: Reactive responses to inbound interest in your product, usually from marketing activities such as PR campaigns or word-of-mouth.
- Outbound sales: Proactive identification of sales opportunities via cold-calling a purchased list, or warm-calling referrals from existing customers. Also called Sales Development.
- Qualification: The process of determining whether a sales lead represents a real business opportunity. Usually involves figuring out if the customer has a pain point that your product can solve (otherwise it’s just a science project), whether there is a budget, if it is a sizable opportunity etc.
- Account execs: The core sale reps that engage the customer, find champions for your product, identify veto holders, influencers, and decision makers, flexibly pitch to various constituencies, and close the deal.
- Sales engineers: A hybrid role with sales and engineering characteristics, SE’s support account execs through the more technical phases of the sales process.
- Customer success: The role in charge of managing your customer relationships after the purchase, driving adoption of the product. Successful customer success reps will reduce churn and create new upselling and cross-selling opportunities.
Each one of these categories is a profession in and of itself, and building such an organization is the core difference between pre-chasm business development and post-chasm sales.
However, don’t fool yourself that this is easy. There are countless ways for the inexperienced to fail at building sales orgs. Here are a couple of the most common ones, and what you can do to avoid the missteps:
Hire the right people: I know, easier said than done, but as with any team, the wrong person will hurt everyone’s performance and job satisfaction. Here are my four hiring guidelines:
- Does she know the industry I’m in? Do you think that an Ethan Allen sales person can effectively sell a payment system to mobile games? A person who successfully sells in my industry and brings a rolodex loaded with potential customers, will hit the ground running and generate immediate revenue.
- Can he pitch my product to me? As part of the interview process, I ask candidates to prepare to pitch my product to a group of 3-5 people. Of course some of the details will be off, but if he got the gist of what we’re about, if he did his research ahead of time, and if he can think on his feet and be flexible, I want him on my team.
- Did I check the right references? Not just the ones she provided, but also some from people on LinkedIn we’re both connected to. If I can find an actual customer that she sold to, even better. Give me someone that worked with her, and I will learn more in 5 minute than I will from hours of interviews.
- Do I want to have a beer with him after work? If the answer is no, I won’t hire. At the end of the day, if a rep can’t master the art of making people feel comfortable, and build a relationship that goes beyond the workplace, he won’t be effective.
Compensation when hiring for enterprise sales: Sales people are notoriously aggressive (as you want them to be!), and are world-class champions at gaming any system you throw at them. If the comp plan produces a misalignment of incentives between the rep and the company, you are in trouble. For example:
- Base vs. variable pay: Try to avoid situations like low base-high variable that starves the rep during a lean quarter (don’t forget that enterprise deals can take anywhere between 6-18 months), and high base-low variable that discourages aggressive selling. The best reps will argue for a low base and an outrageous variable compensation.
- Channel conflict mitigation: If part of your go-to-market strategy is relying on value-added resellers and strategic partners to sell your product and extend your sales reach, you need to take into account situations when a partner a rep go after the same customer. To minimize conflicts, develop a well-documented process that explains who gets credit, what price discounts are allowed, and when you double comp.
Building a top-notch sales org is in many ways antithesis to the nature and DNA of startups, and is the real source of the instinctive objection to professional sales. However, if you don’t take the plunge, especially when selling to enterprises, your company will likely never move past the fun experiment phase to become a self-sustaining, profitable business.
If you do this well, you are already way ahead of most of the competition, and your enterprise prospects will feel more comfortable betting on a product from an unknown startup.
 Ross, Aaron, and Marylou Tyler. “Specialize Your Four Core Sales Roles.” Predictable Revenue: Turn Your Business into a Sales Machine with the $100 Million Best Practices of Salesforce.com. West Hollywood, CA: PebbleStorm, 2012. N. pag. Print.