Managing sales people is a straightforward proposition: you get what you reward. Analyze the compensation package and ensure it isn’t encouraging what you don’t want or discouraging what you do. If you are unhappy with commitments the sales team is making you need to make it clear who needs to review and sign off on different kinds of commitments.
Managing Sales People
Q: I work at a SaaS company in the services team, we often team often finds that customers mistakenly believe that:
- Certain features are included in the product package they bought.
- Certain services projects are included in the services package they bought.
What are some ways to prevent this from happening?
Managing sales people is straightforward: you get what you reward.
Any time you see sales behavior you want to change (or create) carefully analyze the compensation package and see if it isn’t either incentivizing what you don’t want or discouraging what you do. Your sales compensation plan is the single most significant control point in most firms.
Who reviews the sales presentation and sales quotations/proposals? If the service team is not involved it makes sense to include them in a timely review process.
Add customer satisfaction and margin contribution calculations to your sales compensation. If the field is leaving customer’s dissatisfied or highly satisfied adjust their commission and bonus accordingly. If the field is essentially giving away services deduct the cost from what they are paid commission on.
If there is persistent and intentional misrepresentation of what features are included in a proposal someone should be fired, but make sure it’s not due to poor or confusing documentation.
See also “You’ve Launched, Now What.” I addressed some of these challenges:
In the beginning there are only one or two people–typically the CEO and CTO–who can actually make a binding commitment. But for your company to scale up, a whole bunch of people start to make promises to a lot more customers. This means two things:
- If you don’t have a plan, it’s like running a development effort without a source code control system: you don’t know what you are changing, so you need a plan.
- If you don’t agree how you’re going to change that plan; if you don’t develop a change process, you are going to spend more time arguing about how to change the plan, then on the merits and drawbacks of the change that is being proposed.
How many people have sales guys in their company? [No one raises a hand.] Okay. Well, after you launch they may become more important.
Right now the sales incentive for Beta is very simple, if we make the sale we all get to keep our jobs. It’s a pretty easy thing to focus on. But, after you launch you get what you reward, so you want to pay very careful attention to whatever you put into that compensation plan, and how it aligns with your business model.
The founders have to be directly and intimately involved in selling, because maybe it’s not the sales pitch, maybe the product sucks, right? Maybe the business model is not quite right for what you are trying to do. The founders have to be intimately involved to be able to make adjustments between the message, the product, and the business model. Also, if they are not involved now, they can’t manage later on as they scale its sales force. So, you have to learn what’s involved with managing the sales force. It’s not magic. It’s not hire the best liars you can. It’s a real art.
We sometimes talk to firms that have hired and fired several sales people. They don’t yet have a sales pitch that works, and they are just burning money. Don’t do this. A real sales guy will give the same pitch over and over again, because that’s what works in the corporate world, and that’s what normally works post-launch. Because, most of the time they have been handed the pitch that works, and so if it didn’t work with this prospect, then it’s the prospect’s problem. During beta and for your early sales, your pitch may suck and will need to be changed.
A lot of engineers we talk to say we can’t figure out how to get the sales guys to do what we want them to do.
We reason with them.
We talk to them.
We invite them to meetings.
We show them the corporate mission statement.
Let me explain you, it’s very, very easy to get a sales guy to do what you would like. You adjust his compensation plan; you pay for what you want and you manage against that. It’s very simple. If you don’t do that, you are wasting your time and his.
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