The Importance of Outbound Sales — Part Two

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In the first part of my article I have focused on the initial aspects of creating a well-oiled Sales Machines like choosing a sales model, assessing the size of your Sales Team or calculating sales economics. In the second part, I am going to write more about the human aspects of managing a Sales Team, hiring (and firing).

It’s pretty common that at the early stages of a company, there is a small number of people involved in selling products. Usually there are co-founders trying to get a product-market fit. But pretty soon they realize that it’s important to build a nucleus of a Sales Team with more competent salespeople. Ideally, one of the co-founders presents sales experience but pretty often this gap is filled with a VC funding and employment of such a person. Usually you do not need a CSO (Chief Sales Officer) or VP of Sales until your Sales Team is bigger than 10 people. After this contractual limit, a founder employs a Sales Leader and they compose a small team of salespeople expanding its size and activities. At this stage, it’s important to remember a few rules.

Hiring Sales Leader

The first question is ‘Who to hire as a Sales Leader?’. It’s crucial to answer this question correctly as in my opinion, an effective sales leader mostly determines the success of a company. There are tons of books written about the subject, but I would like to highlight a few things I personally admire in Sales Leaders.

1. Most effective Sales Leaders create a sense of common purpose, a group of followers ready to ‘jump into the fire’ with such a leader. I believe this attitude is much more important at an early stage of a company’s development when it’s important to ‘break another glass ceiling’.
2. Most effective Sales Leaders constantly plan and improve the activities of their people. In this sense, ‘the plan is nothing — planning is everything’. They set achievable but demanding goals, they are flexible, and know every single team member’s strengths and weaknesses by heart.
3. One of the biggest surprises to me was an ‘operational mode’ of the best-in-class Sales Leaders I used to deal with. Rather than being very pushy and autocratic, they were very careful listeners. In the end, they did not escape into a ‘false democracy’ from taking unpopular decisions, but for sure it was more ‘aikido’ and not ‘karate’ style they presented (in short, for those who do not distinguish these: aikido is considered a soft, more passive style, while karate is viewed as harder — but they both achieve the result).
4. The best Sales Leaders are usually self-motivated and very goal-oriented. It’s only partly true that they are purely financially driven. They are high-achievers and financial satisfaction is important for them, but it usually comes second.
5. I give a few additional points in assessment of a Sales Leader, when I can verify they are metrics and number driven and know current results. I often ask them what is a plan for this quarter and what is the current execution of the plan. Or how does their sales funnel look like and what are percentage drops at every level of such a funnel.
6. The other thing I check pretty often is the ‘natural environment’ of a Sales Leader. I believe it is important for Sales Leaders to adjust their working spaces (offices) visualizing goals and achievements. In many offices I observed whiteboards, TVs in corporate kitchens or (more recently) dashboards on the initial screens of every single computer in the sales department presenting percentage execution of a plan, best performers, rankings or other information.

Hiring Sales Team

Very often inexperienced Sales Leaders employ a group of people counting on the permanency of such a state. They forget about a fluctuation among Sales Reps and they underestimate onboarding processes. Great Sales Leaders use the ‘Always Be Hiring’ method knowing that a part of their team would be exchanged. In small teams of up to 10 people it would be wise to recruit 2 people every 2 months until the quality of team members reaches a sufficient level of satisfaction. In bigger Sales Teams, I’ve seen a method of hiring ‘classes of Sales reps’ (a couple of people) which allows them to onboard, train, and evaluate these people in parallel.

Positive novice vs experienced veteran

Building an efficient Sales Team is sometimes pretty demanding for inexperienced leaders or founders. They usually struggle answering the question of ‘Should I employ less experienced but easy to learn, energetic, young people or should I employ older people with some sector experience?’. I believe that for simple sales processes and products a positive energy and grit is much more important than sales or industry experience. Experienced people are much more relevant for complicated sales. The most efficient Sales Teams I have seen were constructed by having a mix of young, enterprising, and energetic individuals as well as sales veterans with a majority of them recruiting from the first group.

Rules to hire wisely

Hiring employees is important and hiring salespeople is even more important. As one study shows, the ‘top 20% of salespeople often account for 50–60% of their company’s revenues. So if 20% of your salespeople make 60% of revenue, that’s a 3x multiplier; and since the remaining 80% bring in only 40% of revenue, that is a 0.5x multiplier, meaning that the top sellers are 6x more productive than their peers.’

Meanwhile, only one third of companies in the US monitor the efficiency (i.e. tracking costs or time per hire) of their employment practices. In Europe, I bet, it’s the same or even worse. Employers usually think they know who they should hire based on a mix of industry norms, best practices, company’s culture and… intuition. Usually they are wrong. Some studies show a negative correlation between interview assessments and job performance. A company would have been better off selecting candidates at random.

In hiring it’s important to hire for tasks — not positions. Good hire starts with knowing what you are hiring for in terms of key sales tasks. It’s a different job to generate and qualify sales leads and up-sale some additional products or renew a service. I’m a big fan of hiring people with a specific skillset to be great in their roles. You need more analytical skills to crunch data and generate leads by browsing databases. And you don’t need to be a lively talker to make the first contact. A sales script is usually enough. If you are a persuasive type — the best place will be to close a sale. So it’s like managing a football team. All your people play football, but each one of them is best at their specific position.

In sales, the only evidence of a quality hire is… behavior. Therefore, I do not recommend unstructured interviews as a hiring tool because it would inevitably bring bad results. In my opinion the best way to hire is using some mix of multiple, structured interviews and behavioral assessment. During the interviews with different stakeholders whom a salesperson could cooperate with, it’s important to communicate the tasks a candidate is hired for. It’s also worth preparing forrole-play scenarios. Sometimes it’s wise to involve company’s products or services in candidate interviews. Once you’ve completed the interviews and assessments, it’s a good idea to use the wisdom-of-crowd to evaluate the candidate’s performance. Using multiple perspectives will give you a better understanding of a candidate’s strengths, weaknesses, and a possible fit. If possible — arrange job trials or internships. There is no better assessment than on-the-job one.

Fire fast

It’s inevitable that even a great Sales Leader would make recruitment mistakes. And the employee would be fired. But there are some questions regarding if and when a Sales Rep should be fired. It’s very human to hope that a Sales Rep might improve effectiveness after a bad season. On the other hand, and that’s the rule applicable not only in sales, we should ‘fire fast’ not letting bad performers spoil a team. I observed that in sales, where targets were set quarterly: there is a ‘rule of 2Qs’ (two quarters) when a manager could raise a warning sign after the first quarter of not delivering results and give a notice after a second bad quarter. Of course it all depends on the team, product sold, market, etc., however, it’s worth setting such clear rules to assess Sales Rep’s performance.

Sales tools

There are different tools to shorten or ease some important processes like onboarding, training, setting the goals, and evaluating. Besides traditional Sales Management Platforms and CRMs starting from Salesforce, through Hubspot Sales Hub, and smaller solutions, I recommend checking out tools such as Showpad or Wonderwerk. These examples shorten onboarding processes of Sales Reps by delivering them tailor-made trainings. Just for a record, it’s worth mentioning that you would need great and complex tools like Pipedrive, Salesloft or Freshworks at a certain stage of your Sales Team’s development. It’s worth introducing such tools probably when your team is bigger than 10 people and ‘mature enough’ to use them.

There are so many more topics I might describe here, but in the format of a short article it might be too much to swallow. If you think you build a great marketplace or a digital platform startup and your sales effectiveness is worth mentioning, I recommend you to reach out to me and I would gladly have a conversation about your experience and share mine. In Market One Capital we always welcome great Sales Teams which I personally believe are a backbone of every successful company.