It does not matter if you work in a company of 5 people or on a team of 10 in a 400k employees corporate, start-up mentality could be created anywhere, and this culture is what differentiate one team from another. In addition to the hard skills I wrote about in How to become an all-round software developer, adopting the right culture is crucial for getting valuable results(or any results).
Here are the 10 core principles of a startup culture wherever exists.
- A Sense of Urgency – the team needs to create value and to deliver it to the market quickly enough in order to stay ahead of the competition
- Risk Aversion– doing something that has never been done before. Something big and meaningful! Not playing it safe. Willingness to try new things.
- Teamwork – dropping everything else and getting up to help a teammate asking for help – including over the weekend.
- Willing to take Extreme measures – Over night delivery – we call it white night:)
- Learning – this is the fun part. In other words, assembling the parachute on the way diving!
- Optimism – it may look and smell like a sausage, but will make it work!
- Volunteering – pull vs. push system.
- Dictatorship of the Mind – The best idea wins regardless who came up with it. The team will rally around the best idea!
- Commitment to the product, the team, the company- Time estimates are always wrong and underestimate the effort. The last reaction to slipping is to move the date and the first one is to stick to one’s commitment.
- Generosity and Serving – reusability, building frameworks, information, tools, and tricks.
- Yea, right- overachieving!!
These principles should be reminded every time a new person join the teams. If there is a mismatch between the team and the new teammate, there is a risk of the entire team loosing the startup mentality. This is the time to bring these principles back to the team’s awareness. This is when the expectation that any team member must have only positive influence on the rest of team should be communicated and set as a goal.
Did I forget a principle?
A sales process does not have a single path. It is not a simple, one time, sequence of events. A sales process from lead to close may go zig zag, back and forth, and in circles. Also, the customer/partner may interact with multiple touch points like, pre sale, tech support, and billing. It is not enough to just develop a single dimension sales funnel with steps going one after another from the wide top opening of the sales funnel to the narrow bottom end. In order to identified who is doing what, and when, where leads may fall between the cracks, and where there are opportunities to up-sale, I recommend mapping the sales process in the following way.
Step 1: Leads generation – the list of marketing activities that will generate leads/contact
Step 2: Referrals – identify where are they coming from
Step 3: Adding to the leads bank – some filtering/de-duping can happen here. The number of active leads is the denominator for the conversion and close rate calculation. This is where Sales and Marketing needs to work together and agree about what counts as a lead. The information needs to be time sliced – usually on a quarterly basis. Some leads that did not progress to the next step in the last quarter, despite multiple follow-ups, can go back to this pool for the next quarter. Others may be stored for a longer term follow-up.
Step 4: The volume of leads to follow-up depends on the amount of leads available and the inside sales capacity. So, here too, some leads need to slip to the next time slice. It is a good practice to keep an eye on the % follow-up = # of leads contacted # of leads available, to see that sale reps keep prospecting. The next step after following up with a lead, is getting the prospect to perform certain activity(e.g. registering to the web-site, downloading a white paper). This step split the process in two: 1. The lead is now qualified, showed interest and maybe other resources from the company to follow-up with her. 2. The lead did not react to the offer and it should be parked in the “to follow’ up pool of leads.
Step 5: Close – the prospect is on-board and productive. Here it is good to calculate the close rate (could be done from the total # of leads or just from the leads that the sales reps contacted). Here again, the prospect can go to the “to follow’ up pool of leads if the deal was not closed. Also, another base practice, and this is crucial for SaaS company, is calculating the renewal rate to monitor retention. Resigning customers should be added to the “to follow’ up pool set with high priority, and should be called as soon as possible. On-boarding is a crucial step so monitor the retention rate relative to new customer in addition to the overall customers base renewal rate.
Step 6: Closing up-sale opportunities. This is where other customer touch points possibly contribute to higher close rate. Calculating the close rate here could be tricky. It is not simply calculated based on the # of leads from step 3, but also taking in consideration the entire customer base. One of the key question that SaaS companies struggle with is how to identify opportunities for up-sale. This is where segmentation becomes crucial, and foresight thinking about what data to collect about the customers is the key.
One more thing to consider, referrals to generic leads are like jet fuel to the gas you fuel your car with. There is no question whether to invest in referral program, but it is hard to know how much. Here too, the data you collect about your referrals can help you to come up with the right answer.
In summary, the sales process looks more like a ping ball machine than a sequence of inputs and exits criteria. If your sales process is even more complicated than my example above then it is even more critical for you to spend the time mapping it.
Mapping the sales process can help with:
- Identifying where leads should be followed-up, and by whom in the organization
- Where leads should go back to the short term or longer term pools
- Where and what data should be collected along the way
- To identify opportunities for up-selling
This exercise can go a long way increasing your you revenue as a result of an increase in your close rate.
If you are looking to learn from the best how to focus your effort in 2013, just google “three words for 2013“.
My three words for 2013 are: connect, story, and service.
Connect: I would like to learn ways to connect better with my family, co-workers, classmate, friends, and prospects.
Story: This goes both ways, to listen openly to other’s stories as well as to invest in developing my storytelling skills. Both can help to support the goals wrapped in the first word(connect).
Service: To be of a service delivering value to the people I connect with.
For me the “soft skills” are the hardest!
On the physical side consider cleansing your body from all the processed food consumed in 2012 – I plan to try this method.
I’m now two and half years into the part-time MBA program with Boston University with a little less than one year to go. One thing that surprises me the most is the lack of Sales Management class in the core program. I was educated about managerial accounting, finance, operation management, organizational behavior, marketing, economics and corporate strategy, but not a word about sales. When I got to the time to select my electives I knew that something was missing, so I found only one class called Entrepreneurial Sales Strategy (that I later heard was offered only every other year) and signed up for it. Only one class in the whole program that talks about sales. When I checked with my friends who went to other universities for their MBAs I was even more surprised to hear that this is the common case. Sales is not part of the MBA program!
The irony is that Sales (as I was reminded by my Sales Management professor during our very first class) is the only activity that contribute to the positive side of the income statement.
I’ve learned a ton about running a business so far, but this class was the most transformative one in the MBA program for me. It does make sense to allocate this class later in the program after understanding key frameworks like DuPont analysis, Five Forces analysis, the time value of money, pricing, marketing positioning, among others, yet sales management can help to tie all these things together in a coherent manner with a very clear goal in mind.
Here are some of the key subjects from the Entrepreneurial Sales Strategy class:
- Business Models and Value Propositions
- Building a sales organization – hiring, compensation, organization, and management
- Direct, Indirect and Channel Sales Strategies
- Importance and development of strategic partners and alliances
- Understanding the Selling Process and Sales Cycles
- Implementing Pipeline Management Principles and Forecasting Techniques
- Repeatable Sales Models – what they are and why they are important
- Keys to successful selling including Solution (consultative) selling vs. product selling
- Sales Management, Positioning a sales force as a barrier to entry – differentiation and competitive advantage
- Major Account Selling, Team Selling, Global Sales Strategies
During the course we participated in two team sales activities:
- Sales Challenge – the objective of this activity was to engage in a complete sales process including building the value proposition and sales funnel, leads generation, leads qualification, cold calling, navigating the target organization, and closing. We had to convince a VP of Sales from a company with over 100MM annual revenue to participate in a panel with more VP of Sales from other industries at the university in one of the class evening.
- Sales Audit – each team was assigned a company(a real one), to execute a complete sales strategy and management auditing consulting project, and to come up with recommendations. We got the chance to meet with the CEO and VP of sales in the assigned company, to hear about the strategy and sales activities, and to gain access to real business data.
- The Sales Audit project was one of the highlight of my MBA program so far, I learned during this activity more than I could ever learn from case studies discussions in class. This company is a young SaaS company (Software as a Service), selling mainly through partners (MSP/VAR) and growing their booking more than 45% in 2012. We mapped their entire sales process, identified areas for improvements, and came up with two major recommendation plus other areas for further research. After delivering the presentation in class we also travel back to the company to report our findings.
The key outcomes from this projects were:
We made a difference – the company is actually revamping it sales process following some of the input from our recommendations.
We build great relationships with the CEO and VP of Sales
One of our team mate who graduated after this class was hired by this company
We earned a real consulting experience and learned how sales works in the real business world
We got an A
I know I did good choosing Boston University for my MBA program!!
In summary, the motivation for writing this post came as a result of a comment I heard during our second visit to the company that we audited, it came from both the CEO and the VP of Sales saying that this material was never taught in their MBA program(one of those was done at Stanford). I believe that Sales Strategy and Management are a core managerial skills, even if you end up working as a general manager, business or financial analyst, in operation, it is important to understand your value proposition to the organization and how your activities contribute to the sales activities. For the ones going for an MBA program with the aim working in Sales, Marketing, Strategy, or to start their own business, learning about sales is a must!!