Creating a healthy sales organization is imperative for startups that want to eventually scale-up. Mastering the ups and downs of sales cycles requires that you get a lot of important factors right –from hiring and managing, to prospecting and pitching, to reporting and pipeline analysis, and much more. Throw in the fact that you’re selling at a startup and you end up with a lot of unknown factors that you, as a sales leader, and your sales team have to account for and plan against.
So how can you get really good at sales? How can get your sales organization to a place where it’s the department you worry about least? How can you get through this quarter with flying colors? More importantly, how can you set yourself up for success all year round from the beginning?
These are the questions we want to help our VentureApp users answer. But, I’m not a sales expert despite all that I’ve read on the topic and the many sales meetings, calls, and team discussions I’ve been a part of or simply overheard. I needed to talk to a true sales expert – someone who lives it every day and can share experiences and lessons for our community.
So I called upon our resident sales expert, our director of sales, Kareem Agha. He’s been kicking around the Boston sales community for years and most recently was crushing quotas at Bulhorn, selling an enterprise CRM solution. We needled my curiosity for sales knowledge down to 10 all-important questions for a sales leader to master his or her role at a startup.
Without further ado, here’s the abridged and cleaned up version of our conversation:
In your opinion, what’s the most important sales strategy a startup under 50 employees should employ?
KA: This is an easy one for me – startups must base their complete selling process off of their buyers’ journey. This opinion is widely understood but rarely implemented properly. People don’t spend enough time talking to consumers and prospects about how they found their service or product, and ultimately how they made their decisions on services similar to theirs. Without truly understanding how your prospects purchase services you can’t set up your sales team for success.
And, it’s a simple add-on to your daily activities. If you’re talking to a prospect, or even someone remotely close to a prospect, have a conversation with them about their personal journey. Don’t sell them, just listen. Another way that I like to get insight into buyer journeys is by talking to other sales leaders within our community that sell something similar to me. Why reinvent the wheel?
How does the sales process and challenges differ at startups with different size sales teams? And, how should startups structure to more effectively scale their sales org?
I always look at sales teams in three different buckets when it comes to size. You’ll see major differences in startups that have one sales representative, to 5-10 reps, to 10-20 reps, and then 20+ reps is its own beast (and probably no longer a startup by definition). Once you really start to scale past 20 reps, the company is growing up and there starts to be so many layers of management and teams that the startup factor tends to fade away.
- 1 Sales Rep When you have one sales rep (it might be you!) in the early stages of your startup, you’re dealing with all of the typical early struggles. These are typically widespread across the startup, too – you’re identifying how to best position your product, figuring out who your prospects actually are and how to get them onboard, and generally there is a lot of trial & error. The product and value prop could completely pivot in these early days. Your thought process will likely shift day-to-day too, so you don’t want to hire a sales rep until you have your buyers journey nailed down. Once you know who your prospects are and what their pain is, you can start to pass on the sales to other and more reps.
- 5-10 Sales Reps You now have most of your process built out and you’re beginning to generate some predictable success. Teams of this size typically struggle with prospecting and lead gen. How do you fill the top of your funnel without much support from a business development rep or marketing resources? At this point I urge teams not to throw gas on the fire until you actually have product market fit. Continuing to sell without fixing core problems will just result in a large problem with customer churn. You don’t want to have a huge churn problem but it’s always a challenge at this stage.
- 10-20 Sales Reps Your startup should have hit product market fit at this point. You have raving fans, users see the value, your working on achieving inbound customers, and churn is much less of a factor than it was at 5-10 reps. At this juncture you’ll start to require layers of management because you’ll be stretched thin as a sales leaders and your focus should be on attracting customers, pricing, and recruiting. You should be moving beyond sales sergeant and hiring someone to be in the field with reps each day. This transition can be really tough for some sales managers – you want to be involved in the day-to-day but you truly need to focus on higher-level thinking to grow the business.
What’s the best lesson or piece of advice you’ve received on sales at a startup?
It’s easy to stress and worry about what’s coming next in the startup sales world. But you can’t worry because everything will always continue to change. If you do your job to the best of your ability, everything should and will work itself out. The product, positioning, and even team, could (and very well might) change, and so the only thing you can constantly control is YOUR output.
What’s the worst mistake you’ve made in your sales career, and how did you turn it around?
Not setting proper expectations. Specifically, I closed a large deal based on an integration that we planned to have down the line. Long story short, the integration never happened and the customer was unhappy – rightfully so. I didn’t want to lose the deal, of course, but I also wanted to rebuild that relationship with the customer. I basically went back to the drawing board and through the entire sales process again because I knew that the promised integration wasn’t the only reason they chose our software. Ultimately, we gave them a small discount for goodwill and a token of gratitude, but they stayed on the platform because we sold them on the software itself.
This was a perfect example of how setting the right expectations – and having a true understanding of the feasibility of the expectations you’re setting – is so important to build a relationship, not just to close the deal.
What’s the best piece of advice you would give to a sales leader at a startup?
Focus on your talent more than anything. Sales leaders at startups typically follow a similar path – they were a top sales rep at their last company and ready to make the leap to management. Once they make that move into management at a startup, they must fight the urge to close deals and do the job of a sales rep. Focus on hiring, training, and mentoring. Making your team the best they can possibly be is the secret to building a successful team.
How should sales leaders accurately plan ahead for recruiting and hiring?
Sales leaders that wait to the last minute to start filling a role are doing it the wrong way. It’s incredibly hard to find good candidates, so if you need to hire someone next month, you should already have a stable of candidates that you’ve been in touch with year-round. I am always recruiting, constantly meeting and interviewing new people even if I don’t have an immediate hiring need. Plan to spend about 20% of your day on recruiting, and that doesn’t necessarily mean sending notes on LinkedIn. Meet with sales people around your area and listen to their stories and their career needs to see if their is a fit at your company – now or in the future.
Additionally, you need to have a constant understanding of the high level metrics of the business. It helps to have a sales operations expert who can help you plan and optimize your team. Understanding your CAC (cost of customer acquisition) and each individual sales reps’ complete efficiency will help you accurately predict the future. Only once you know what 100% quota achievement looks like for each sales rep can you start to understand when to bring on another new hire.
Q4 can be a crunch for some sales teams – how do you keep your team ahead of goals in Q4, and all quarters really?
It really boils down to accurate forecasting, so if you don’t have confidence in your reporting there’s no way to predict future success. So you might be asking, OK, how do I report accurately and confidently? In CRM systems, there are standard, cookie-cutter sales stages but they don’t always fit the business using it. Those stages are typically: prospecting > qualifying > developing > proving > negotiating > closing.
When I looked at our customer journey, it didn’t seem to fit into those standard stages, so we built custom stages. This allows me to point to a specific action that our potential buyer took to know exactly where they are in the stage with a certain weight. This way, our CRM reporting is completely accurate and we’re not inflating our reps pipeline.
From there, the key to any successful sales team is efficient prospecting. Use your reporting to make sure you have 3x of your quota and pipeline at all times.
For sales teams struggling this quarter, what last minute tips can you share to push them over the finish line?
Hope and pray.
In all seriousness, last minute tips go against how we operate. If you’re short at the middle of Q4 you’ve done a bad job. You should be able to look a quarter in advance and know where you stand.
But if you’re really in trouble this quarter, I would double down on prospecting and hope you win a majority of your 50/50 deals. While it might cannibalize your efforts for next quarter, simply devote as many resources as you can to closing. You might get there.
How should sales leaders prepare their team for the new year?
The biggest challenge for companies at the beginning of a new sales year is a massive dip in productivity. If you had a good year, your team mails it in the first month of the first quarter. They’re tired, or they’re resting on their laurels. You can fight this by keeping a high sense of urgency. Sure, congratulate your team on a good year, but what’s next? Increase the stakes in Q1 – make the odds higher and your people more accountable. You should also place a strong focus on incentives. You want your team to start the year off strong? Incentivize them to do so.
Are you paying attention to any sales trends right now?
Unfortunately, I hear that the traveling sales rep is dying. Face-to-face sales are going away and inside sales is winning given the efficiency of a phone call and the influx of automation tools available at our fingertips. Don’t get me wrong, some companies do this very well, but I think we’ll see an inflection point. Marketing automation is definitely having its moment but I believe that the reps that continue to create relationships will be the ones that truly succeed. There has to be a balance – always keep an eye on automation but also be cognizant that humans purchase from humans.
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