By Rick Vohrer, Sales Quarterback, TCV Growth Partners-
I strongly suspect that anyone taking the time to read this has watched Shark Tank. If you haven’t, STOP reading and go binge on a dozen or so episodes and then come back to this. Shark Tank is a microcosm, a Cliff Notes version of what is required to SCALE your business to the next level. And each entrepreneur that hopes to appear before the “Sharks” and pitch their case must pass an application process and be approved by producers of the show. Producers are interested in entertainment value because advertisers value a large audience. Given all of this, what can you learn from Shark Tank about taking your business to the next level?
Listen to the “pitches” made and the responses to questions from the “Sharks”. Almost every presentation is about the product and how it will change the world, therefore be a great investment opportunity for the Sharks. After the presentation, if the presenter did not give details, there are always two questions. The first is almost always “What are your sales?” and the 2nd, “What was the profit?”. Ever wonder why they are interested in sales first and profit second? And if the experts, AKA “Sharks” think sales take priority to profit, is there a message to you about how to SCALE your business?
Sales is the life blood of every business, including yours. Without it, your business will not survive. With strong sales, the business can survive virtually anything. Profits come only after sales. That is why Sharks ask about sales first and profits second. They also know that growing a business is hard, faces multiple challenges out of the box and while the challenges may change as the business grows, there will always be challenges. Strong sales allow you to weather the storms. Strong sales will pay for many mistakes. And once you get through the early stages, strong sales produce profits.
ADVICE FROM SUCCESSFUL ENTREPRENEURS
"Hiring driven salespeople is critical to any company’s growth and success."
—Al Turnauer, President & CEO, Supply Chain Innovations, Inc.
"When companies apply science to managing salespeople, results come from a dependable process, not by chance."
—Cheryl Jekiel, CEO, Lean Leadership Center
"When it comes to hiring salespeople, the cost of failure is simply unforgivable."
—Tammy Bitterman, Founder and Managing Partner, The Acceleration Group
"Hiring the right salesperson is one of the most important and difficult decisions an owner can make. Hiring any candidate who lacks Drive can have a dramatic impact on any sales team; and it won’t be positive. With so much at stake, sales managers would be wise to follow the Sales Triathlete process. It is a practical guide to getting it right." —Kelly Grindle, President and CEO - Hatteras Yachts
So how do you get strong sales? Having a great new “mouse trap”, idea or service that meets the markets’ needs or desires helps but does not guarantee sales. If it did, there would be little reason for appearing on Shark Tank. Sales requires a plan… not one in your head. If you want to be successful in the sales effort, it needs to be written. The goals need to be S.M.A.R.T. In case you are rolling your eyes because you’ve heard it before, S.M.A.R.T is defined as follows:
Specific: Target a particular gross dollar value.
Measurable: Quantify progress metrics. What things can you measure that when tracked will assure you of reaching the targets?
Achievable: Do you have the resources and capacity to achieve the targets?
Realistic: Outline what results you can feasibly achieve using the available resources.
Timely: When will the sales targets be achieved? Break the annual targets into smaller bites; daily, weekly, monthly, quarterly.
I guarantee you the Sharks and any other investor will require these, so require them of yourself.
All the above can be thought out and determined by YOU. But that does not mean YOU are to be the one implementing the sales plan. #3 talks about resources and capacity. When thinking of sales, resources are your sales team. Capacity is your sales team and your business’ ability to produce the product or service at the level required to meet the sales targets. If you do not have the resources and capacity, you have to make decisions based on three options:
1. Add resources and capacity,
2. Reduce your sales targets to align with your existing resources and capacity,
3. Shift existing resources and capacity from another area of your business.
Sales requires a special set of skills. The strengths necessary to be successful continually in a sales function are innate. They can be enhanced. Some think they can be learned. The techniques, methods, processes, etc. can be learned, but it is highly unlikely they will become strengths. One who does not possess the strengths necessary to be successful in sales but sets out to learn will likely end up knowing more about something they will never be strong at performing. Your sales team needs to be hard wired for sales. If you are an entrepreneur, you need to be honest with yourself. Are you the best option for selling your product or service? If not, add sales capacity. If the sales team you currently have is not hard wired for sales… you know what must happen. And the longer you delay the longer you will tread water, maybe even go under a few times as far as sales growth. The Sharks did not get to their position in life by delaying important decisions. Neither should you.
How many walk-ons make it in professional sports like the NFL? NBA? NHL? AL or NL?
Top talent is recruited; it rarely walks in the door or answers an ad. Generally, top talent doesn’t read or need ads because it is sought out. Isn’t that what you want to build your sales team?
Consider a head football coach. When they need a middle linebacker, they do not go out on the street and find just anyone over 6ft. 3”, 230+ lbs. They look for proven players, those that have demonstrated the strengths required for the position at the combine or observed by scouts, and then assess the recruit’s head and heart to be sure they fit with the team dynamics. There are a lot of parallels for sales.
You need a team of Sales Triathletes. A triathlon is a multiple-stage competition consisting of three continuous and sequential endurance disciplines. The most popular form involves swimming, cycling, and running in immediate succession over various distances. Triathletes essentially train for marathons in three events. To succeed, defined for many as simply finishing well, requires training that is consistent across all three events. One must perform successfully in all three to finish well. Participants do not need to be a Michael Phelps, Lance Armstrong, or Usain Bolt clone, but they must be able to swim, ride a bike and run. Performance in only one or two venues will not render the desired result. If they can’t do any one of the three, they cannot participate. And it is the same in Sales. To be successful in sales requires performance in Three (3) areas: Prospecting Presenting Closing
These three, like the three events in a traditional Triathlon, are not sprints, but marathons. The sales triathlete needs to be strong in all three and all three need to be consistently practiced over the long haul. To be successful requires a plan. Then the plan is implemented through consistent training. And like a sports triathlete, they will need to train in all three over and over. Athletes do not ever believe they have mastered their sport and no longer need to train or practice. A sales triathlete understands the same.
Salespeople have a tremendous impact on the fortunes of an enterprise. Hiring under performing salespeople creates financial hardship on large companies and small startups alike. Therefore, hiring the right salesperson or team is one of the most important and difficult decisions you will make. How do you get the odds in your favor? You need someone who is functional on all three legs of the Sales Triathlon, understands the need and is willing to consistently train in all three. Some call this trait DRIVE. Drive is made of three key components: Need for Achievement, Competitiveness and Optimism. Christopher Croner is a PhD who has co-authored a book titled Never Hire a Bad Salesperson Again.
Choosing to read it would be a good investment for any business owner, especially an entrepreneur looking to scale their business. Dr. Croner developed a test that measures / determines drive for sales. It is a personality / strengths type test developed specifically to test sales drive. There are two statistics that reveal the validity of the test. The first is that they tracked hires that “passed” the test. In year two (2) after being hired, 93+% were still successfully engaged in producing above average sales. The more important statistic is the one that tracked those that did not pass but were still hired. 74% of them had washed out by year two (2). When you have that kind of statistic to protect you on the downside, it makes sense to use it. It’s more important than one showing those with success. It is very easy to review results. They come to you color coded, Red, Yellow, and Green along with a detailed explanation and suggestions of how to best manage this person should you choose to hire them. You should use the Sales Drive test for every sales hire. But it is important to use it correctly; BEFORE you interview. Why, you ask?
If you interview first. You are likely not a trained interviewer. You have a vital position to be filled and want it filled yesterday. The candidate is looking for a job and will do everything possible to sell you on how wonderful they are, how they will do great things for your sales volume, etc. Then if the test results are not great, you might doubt the results and make a poor hiring decision. When you have the candidate test prior to you granting an interview, you have reduced the risk of a bad hire because they never get the chance to “sell you”. Most investment counselors will tell you that portfolio gains will take care of themselves. Protecting from risk on the downside is what saves portfolios. Hiring a sales team is no different. Use the test to weed out those not worth interviewing.
Use the interview to determine who has the potential to be a great Sales Triathlete. The Sales Drive test is a tool. It is only one of several factors that should be used in making your sales hire decision. In addition to the three key components of Drive, there are other personality traits that are also important. These include Confidence, Persuasion, Relationship Skills and Organization. Salespeople like to sell. The adrenaline rush from the close is important to them. Closing involves more than “getting the deal” and will be covered in detail in a later blog. All salespeople like to pontificate. The presentation leg of the Sales Triathlon gives them ample opportunity to participate in and realize this. Overcoming objections during the presentation feeds any need for control they may have. These two legs of the Sales Triathlon are generally strong suits. The First leg, Prospecting, tends to be the one that will separate the OK from the great. While all three legs require DRIVE, Prospecting probably requires the most. It can be a deal breaker for some reps. If they are used to or expecting to run leads generated by others (marketing or call centers for example), you need to strongly consider if your business can consistently generate leads for them to run. It is also a potential excuse as to why a rep’s sales are off. When they can prospect, consistently keeping their pipeline full, they are a stronger candidate. Your risk is reduced. Make sure you fully vet their ability and willingness to prospect.
It’s a New Year. We are only a couple of weeks into it. If you have not made a written sales plan, it is not too late. And if you need to rethink your sales team, do it.
Up next, Leg 1 of the sales Triathlon - In the meantime feel free to reach out to our Sales Quarterback if you have any question. You can reach Rick Here.