Rajen, an Entrepreneur-in-Residence at the DMZ, helps startups gain sales traction and build high performing sales teams
Once startups land a few customers, they often face the point where they wonder: “As the founder or CEO, I’m the only person responsible for sales on my team. I’m thinking about hiring a sales rep because I just don’t have the time to focus on sales and I want to grow faster. What should I look for?”
While having a few paying customers is great (and I applaud you for getting there!), it doesn’t necessarily mean you’re ready to bring on a salesperson to scale for growth. Before you hire anyone, it’s important to ensure you’ve actually built out some type of working, repeatable process for getting new customers.
Here are six things to consider before making your first sales hire.
Are you ready to add distance between you and your customers?
The best part of being a founder running sales is that you can use every sales call as an opportunity to engage in customer discovery. As you try to bridge the gap between the product you’re building and the market you’re building for, outsourcing these conversations and customer interactions can be a huge crutch. The true risk here is that the impact of this can go beyond sales and into product development as well. As an early-stage company that’s still finding product market fit it can be a huge risk and can ultimately slow down your entire company.
Do you have a working sales process?
Have you actually built out a working sales process (even if it’s hacked together initially for 5-10 deals) that you can then hand off to a new sales rep? This doesn’t have to be complex, it can be a basic sales funnel, but there should be some type of consistency to generating leads and closing deals. The best way to check is to look back at the deals you’ve closed and map out this basic process, even if it is just on a whiteboard initially. If you look at your closed deals today and the process to find and close them looks totally different across all of your deals, then you don’t have a working sales process just yet.
Do you have measurement tools in place?
Have you put some measurement tools in place that allow you to effectively capture data on your deals, track your sales activity and monitor results? Having a CRM is typically just the starting point, and often, spreadsheets are used in the early days. This is fine when it’s just you as a founder, but before making additions to your team, invest the time in researching how to best use your existing CRM to monitor both pre-sales activity (i.e. lead generation, lead enrichment, opportunity progression, etc.) and post-sales results (i.e. revenue, onboarding process, engagement, etc.). You’ll need this to track your progress or else you’ll be flying blind when it comes to managing your new sales rep.
Have you set targets and realistic goals?
Have you set internal benchmarks for yourself (that you’ve actually been able to meet) that you can then use to define sales targets for the new sales rep? For example, as a founder, let’s assume you’re able to send 100 emails, talk to 10 prospects and conduct two demos on a weekly basis, knowing that you’re only spending 50 per cent of your time for sales. Then once you have a fully dedicated sales rep ramped up, your sales rep should be able to do twice your activity with 200 emails, 20 prospect conversations and four demos. There is a lot more to defining sales targets and sales compensation, but in the early days it’s particularly difficult when you have virtually no historical data. Every salesperson deserves being given realistic targets, and if done correctly, it can be a huge motivating factor towards sales productivity and growth.
Are you documenting?
Have you effectively documented the knowledge that you’ve gained on your customer’s pains, industry trends, and product value proposition? Is this documentation good enough that you can use it to teach it to someone with virtually zero experience in sales or your industry? It doesn’t matter if you’ve convinced the number one sales rep from your competitor to join your team. It’s imperative that once you make a sales hire, there is some type of structured training to transfer your knowledge over to them. Far too often, I see companies bring on a sales hire, do a bit of product training, and then just give them a bunch of leads to work. This is a recipe for failure. When making a sales hire, put your new teammate in the best position to truly succeed.
Thinking “sales” is actually a role
Do you actually know what you’re looking to hire for? Hiring a “sales rep” doesn’t actually mean anything because there are different types of salespeople suited to specific parts of the sales process. Are you looking for someone to help with lead generation? Or do you need help doing demos and closing deals? Does your licensing model even justify having a dedicated sales person? Before finding a solution, you need to have a clear definition of the problem you’re trying to solve for. This is just as true in building a product as it is in making new hires to your team. Know what the bottleneck to your sales growth is and then decide what you need to do (or whom you need to hire) to fix it.
The common theme is if you haven’t figured out all (if not most) of the above for yourself, then there’s a good chance you’re not ready to add a salesperson to your team. Any founder can learn some basic sales skills, and there is a tremendous amount of information available online to help you build out your initial sales playbook. You absolutely can do it for yourself. This will not only help you avoid making a bad sales hire, but it will also help make you a better sales leader when you’re ready to bring someone on in the future. Like most other items in a startup, build out your initial MVP, get it working and then start investing money and resources to make it better.