I talk to a lot of entrepreneurs and owners of small businesses. A topic that comes up frequently is, “How do I afford a sales person?” My knee jerk reaction is, “How can you afford not to have someone accountable for generating revenue–sales? How canyou afford not to invest in sales” Then I read lots of horrible advice how to sell without it costing you anything (Driving Sales Without Hiring A Salesperson). My reaction is that it’s simply bad, wrong, misleading, and BS! (But I don’t feel strongly about it.)
Don’t get me wrong, affordability is an issue with all businesses. I recognize that for entrepreneurs and owners of small businesses, it’s a critical issue. You have to manage spending very carefully, but there is no way around it–if you want to sell, you have to invest in selling. The corollary to this, for those pundits of “free selling resources,” is that you get what you pay for.
Every organization has to have someone accountable and executing the revenue generation plan. The field of dreams strategy of “if you build it, then they will come,” just doesn’t work. Yes, you may get a few customers, but you won’t build a sustainable or growing business. As I mentioned, there is a lot of bad advice out there. Here’s some of it:
Get a FREE sales force! The principle is getting other people with complementary products and services to sell your services along with their own, paying them when they make a sale and you have the cash. Great idea in principle, but does it really work? Absolutely not! Why are these people going to go out and sell your product when they have to sell their own—and are probably struggling to make their own numbers? What’s going to make them “accountable” for producing revenue for you–good intention? Where are they going to get the knowledge about the product, who to sell it to, how to sell it unless you invest time, resources, and money in doing this? To motivate them, to make them sucessful, you have to spend time with them, you have to train them, you have to provide them tools and resources. There is no such thing as free. If you have a revenue plan you want to achieve, you need people accountable for achieving that plan, not well intended volunteers.
Outlay Nothing, But Hire A Sales Person: This is taking the “free” approach to a higher level of idiocy. The theory here is hire a sales person, put them on 100% commission and pay them only when they produce results. Great concept, no risk to you, you only pay for results. But in the interim, how does the sales person eat? How do they pay the mortgage? How do they pay for a car and gas to get to the customer? If your sales cycle can be measured in days, perhaps this strategy might work, but for most B2B sales, you’ve created an unworkable solution for the salesperson. They’ve got to have an income. This alternative also ignores the investment you still have to make in training, supporting, providing tools, materials, and other things help them find customers and make them successful in selling your product.
Use Reps/Channels: This is a spin on the previous alternative. It’s actually a very good alternative for all sorts of businesses. The manufacturer’s rep channel can be very powerful in selling your products and services (I think it is often an under considered alternative for all organizations). But here’s where many entrepreneurs and small business owners get it wrong. They find a manufacturer’s rep, they sign them, then do nothing other than sending some product brochures. High quality rep firms expect the principal to provide lots of things–they expect a joint business plan, they expect demand generation, they need training and support materials. They expect some support on key calls, perhaps support on initial sales situations so they can really understand the sales process. They expect to be managed, they expect someone to answer the phone when they need support. Principals want each rep sales person waking up every morning wanting to sell their products. Too many principals signing reps have not budgeted time, resources or funding to support all these activities. So while we have a “free sales force,” that sales force is producing results for the principals that have invested in them and their success, they aren’t selling for those who have not made that investment. Channels–VARS, Resellers, Distributors, Integrators, and others are similar. One final note–who sells to these channels, reps and partners? None of this happens by accident.
The Internet Has Changed Sales Forever: We all know this sales strategy, put up a website, implement a shopping cart, wait for the orders to flow in. Well that’s not free–you have to invest in SEO, you have to invest in getting traffic to your site, whether it’s developing great content, participating in the “social community,” or some other approach, this takes time, resources, and money. Now here’s the big “gotcha,” what if your customers don’t buy through the Internet? There’s no doubt customers get informed and perhaps educated through the Internet, but this doesn’t mean they necessarily buy through the Internet. We have to understand how our customers buy, we have to design our sales channel to support the way they buy–in too many cases it requires someone to do the sales function–it could be a rep, it could be inside sales, it could be direct sales. If your customers don’t buy through the Internet, then it’s a hopeless solution.
Leverage your customers to sell to you! Referrals are powerful, we want to create happy customers that are our advocates–talking us up to others, getting them to call us. But if customers are our sales force, then does that mean we go to them and ask them for a forecast? Do we invite them to our sales training classes? When their pipelines are dry, do we take them to the woodshed? For those customers who are providing referrals, how do we handle the prospects that are calling? In B2B, it’s unlikely they are calling with orders, they are probably calling asking for information and to be sold to. How do we handle those “hot leads?”
Stop The BS!
Revenue generation (sales) has to be purposeful in every organization. We can’t rely on wishful thinking, the good intentions of our customers, partners, and others. Sales requires a strategy, plans, and programs. It requires an investment of resources, time and money. Sales do not happen by accident, but though executing your strategies and plans.
No entrepreneur or small business person would think of investing nothing in developing their products and services, why do so many think they can produce sales without investing anything?
Don’t get me wrong, I understand the affordability issue totally–after all, I’m the owner of several small businesses and an investor in several start ups. In each of those we “invest” in sales—it’s a combination of time (our time as execs), resources, and money. We know that sales can never be free, but we achieve an appropriate and affordable balance of those three elements. Tomorrow, I will talk about how we do this. I’ll focus on affordable investments in selling by entrepreneurs and small business owners.
FREE WEBINAR! Join us for this week’s FREE webinar from the Future Selling Institute on The Newly Minted Sales Manager, Making The Transition. Mark your calendars for Friday, April 8, 2011 at 11:00 AM EST and click here to register.
