SALES EXECUTION STRATEGY FOR TECHNOLOGY START UPS.
March 26, 2014
There are many internal and external reasons why sales execution strategies are under-emphasized in startup companies.
Below, we describe three key barriers that hold companies back from recognizing and acting upon this gap:
There is a lack of available sales talent and sales leadership talent. Very often, the available talent pool consists of people who are experiencing the entrepreneurial world for the first time. With limited funds available, it is very difficult for startup companies to satisfy the remuneration expectations of high-performing ex-corporate leaders and sales professionals. Consequently, many young businesses end up with sub-par sales talent who have been schooled in the corporate approach to customer engagement, but who do not understand the nuances of executing in an entrepreneurial world.
The ugly truth is that only a small percentage of salespeople are top sales talents.
There is a distinct lack of clarity and consistency among investors. Investors, of course, are multi-dimensional, and many do look for sales and marketing readiness as they explore the potential for investment. However, they vary greatly in terms of what they are looking for to evaluate such readiness. During the due diligence process, entrepreneurs tend to think it is in their interests to exaggerate their sales funnel and oversell their partnerships. This practice does tend to increase the likelihood of investment, but then everyone is confused when these companies later fail.
Startup operations are focused on feature development, not on scaling sales. To scale sales, a company must put product feature development to one side in favor of adopting an objective mindset to the metrics of growth. For most startups, operations are still focused on feature development and not on scaling sales. This demands a fundamental mind-shift so that the operations side of the business can better support the efforts of the sales team.
To rapidly grow sales, startups need to: Focus on required product features that are meaningful to the early and late majority, not on features that only excite early adopters and technology enthusiasts. Structure the company operations to enable quick and rapid scaling to support the sales team. Develop a sales execution strategy that matches a value proposition to the early majority. Roll out the sales execution strategy using real metrics (e.g., ratio of qualified leads to closed sales, average cost of closed won vs closed lost sales) that are appropriate to the particular market. Recruit effectively to maximize the revenue potential and minimize the cost of sale.
Utilize effective technology to support the sales execution process. Engage only in marketing activities that directly generate qualified leads. By following the above guidelines, startup companies stand a better chance of achieving early revenue, which may reduce or even mitigate the requirement for external investment.