Lesson 19: Building a Business Dev Team

Building Biz Dev & Sales Team

In the early days of your start-up, a sales team won’t be necessary because you the founder (and your cofounder) will act as sales managers, marketing directors, and the main salespersons, besides assuming any other roles.

As your company grows, keep your eyes peeled for the tell-tale signs you might be ready to build a team devoted solely to sales:

•          Consistent positive feedback from existing customers and prospects

•          Growing demand for the product or service

•          Surplus of leads then the current team can handle

•          Earning enough revenue to hire a full-time sales rep or two

All other things being equal, the more salespeople you have, the more revenue from sales you should generate. Thus, adding sales personnel and improving your existing sales staff are essential components of growing your company.

Evaluating Your Sales Force

The first step in building a sales team is to evaluate your current capabilities and determine your expectations. Companies that do most of their sales through mail orders or the Internet should think of a sales team strictly as an option. Here, a sales force is best used in handling larger accounts while leaving smaller orders to customer service personnel and order-takers. For other companies, however, the salesperson is the most visible—and perhaps the only outward manifestation of the company seen by customers. This salesperson carries heavy responsibilities. He or she must uphold the company’s image, hold the customers’ hands, interface with delivery and repair departments at headquarters, and make the sale.

It shouldn’t require much thought for you to come up with a good description of what you want your sales force to do. The key measure for testing a sales force is sales productivity.

Measuring Sales & New Development Productivity

The simplest measure of sales productivity is the dollar amount of sales per salesperson. That’s easy enough to figure out: divide the volume of sales by the number of salespeople on staff. That will give you an average sales productivity figure and let you know how the average salesperson in your organization is doing. A more useful approach, though, is to know how each individual salesperson is performing compared to the average. You may have a handful of relatively productive people who are carrying the load for a raft of underperformers. This is the information you must know to decide whether to make changes within the team.

One word of caution: sales productivity may involve more than generating dollars of sales. As previously mentioned, salespeople’s activities often overlap with other departments. For example, your sales force may sell lots of products now but costing you sales later by alienating customers with poor service. They may make promises you cannot deliver on overburdening your production and shipping departments. They may sell the wrong products (i.e., items with low margins or high support costs) while ignoring your more profitable product lines. See if certain salespeople have large numbers of returns or sell to customers who don’t pass credit checks. These salespeople could cost you more than they’re worth.

Hiring Salespeople

Adding salespeople can cause steadily increasing sales. If you hire the right people, this can free you up to spend time and energy on other tasks.

To hire the right salesperson for the job, you must understand and be able to describe the job itself. This means you must clarify whether this sales position is intended to generate immediate sales or perhaps develop contacts for a sales cycle that may stretch into months or years. Do you want someone who is a closer (i.e., closes deals) or one who takes more of a consultative approach? Matching your company’s sales needs and selling style to your new hires is the first step to getting good salespeople.

This requires understanding your product and your funnel. Where do the salespeople take over? Are they there from the beginning to the end? Regarding your product, does your product well with a hard sell approach like the stereotypical sitcom toner sales? Or do you require a higher touch relational sales approach? If both can work, which one fits with your brand in the long-term? A big, cold call operating might generate some nice revenue early on, but it can hurt your brand. The answer to every single preceding question requires a different salesperson. If you are interviewing people with the proper experience, they will instantly understand what you mean when you say relational sales or cold calling depending on their experience.

For all potential new hires, make sure you are transparent about the compensation plan. In addition, clarify the territory, your performance expectations, any training you will offer, and any sales tools you will provide. You should also provide candidates with a description of the market and the competition. Then you know that you’ve explained the opportunity accurately to anyone who is interested.

Don’t stop by describing your needs. Imagine the ideal salesperson for the job, including his or her personality, experience, energy level, reputation, and abilities. You may not find someone exactly like that, but if you don’t know what you want, the odds of making a bad hiring decision are high. You won’t know your ideal salesperson unless you think about your company, product, and funnel. We cannot emphasize how important it is to focus on the right things when it comes to hiring decisions. Avoid falling in the trap of easy metrics like number of calls, % of deals closed, time on phone, etc. because while those may be right for a certain product, and many of those lead directly to ROI it may be the wrong approach.

Before putting a job description on your website, LinkedIn, or job site, consider these options:

•          Look internally. You may have technical, support, operations or administrative people who would and could successfully move into sales.

•          Post the job on an internal channel and see what happens

•          Ask for employee referrals. Chances are high that your existing employees know the people who would be happy working for you. They may suggest people for you to contact.

•          Network with suppliers, customers, colleagues, advisors, and social contacts. This can be cheaper, faster, and more reliable than advertising to the public.

•          Check with your local college. You may hire a recent graduate who’s enthusiastic, effective, and less expensive than a seasoned professional.