B2B Sales problems in Startups

Context: We started working on sales design related stuff 3 years ago. Since then, we’ve met ~ 200 CEOs / COOs / VP Sales of early and mid-stage companies to understand their go-to-market challenges. Most of these companies are backed up by reputed investors so we’re talking about serious bets on the future here. As we reflect back, we see clear patterns in those challenges and thought of sharing them in this post.
This is a three part series. You can read the previous posts here: Part 1, Part 2.

In this third part, we cover goal setting, rewards, sales training & messaging and finally share our takeaways from these conversations.

Goal Setting & Rewards
Goal setting was broken to a large extent in many of these companies. The biggest flaws we observed were:

  1. Goal communication was regularly delayed. For each day of delay in communicating goals, we lose precious sales rep productivity.
  2. Goals were mostly monthly. There were the rare cases of reps knowing their quarterly and annual goals but mostly they were missing. We traced it back to a lack of annual revenue plan by the CEO / COO / VP Sales.
  3. There were either no tracking of input metrics or tracking # of meetings (the most frequently used “poor predictor of sales success”). Even if one wanted to, lack of a CRM was a constraint.
  4. Reward programs would change every month. The variable compensation was not accelerated enough. Recognition was either missing or not aspirational enough.
  5. Only a few reps were excited about sales contests. And they were usually the top performers anyway.
  6. Leaderboards were missing
  7. Monthly check-ins with reps were usually devoid of performance data and no clear agenda. Mostly based on anecdotal observations by the sales leader.
  8. Performance Management was practically missing

The implication of these was felt directly in the sales culture of the organizations. Poor compensation practices invite the ire of sales reps. Actually, all employees.

Sales Training
Every CEO wanted better-trained sales reps. Who doesn’t? Same was the case with the companies we met. Some had assigned the responsibility to the VP Sales, some had a dedicated trainer who doubled up as a sales rep and others didn’t have a structured approach but did get together once in a while to exchange best practices. But still, they reported that people weren’t learning and the same mistakes were being committed repeatedly. Why?
Simply because the problem was defined wrongly. The problem we’re trying to solve is “learning”, not training. And the classical classroom training with a preachy sales trainer is one of the worst learning methodologies ever. If you want evidence, ask a child who doesn’t enjoy it in the classroom but learns pretty much everything shown on TV. The undeniable truth about the conventional classroom methodology is that only a small percentage of sales reps, depending on their nature, learn from it. And those guys aren’t usually the ones who need to learn the most. Our objective in sales is that the lowest common denominator on the learning curve should learn and ramp-up at the desired rate.

We’ve figured out two things about millennial sales reps and learning: (a) They hate authority figure worship. Irreverence is natural to them. Till the time they are convinced about the authority figure’s credibility. (b) Their learning and retention of knowledge is much (much) better using audio-visual aids.

These aren’t being used enough to train nowadays.

Sales Messaging
This was the hidden problem. No CEO explicitly mentioned this to us. It’s something we found while doing diagnostics. There were few basic narratives that were working very well and fetching success. However, a large part of the salesforce was not using them.
We found some common features of these narratives:

  1. There was a villain in every story. But it wasn’t another competing product. It was usually a change in the business environment around the prospect.
  2. None of the narratives started with the big picture (counterintuitive, no?). It started with the hypothesis of a very specific problem that the prospect might be facing.
  3. They had plenty of case studies from similar companies. Except that the sales rep didn’t decide which company’s case study was most apt. The prospect did. (yes they pulled that off!)
  4. The narratives included lot of questions by the seller
  5. None of the sellers even spoke about their product unless specifically requested by the prospect!

Unfortunately, these narratives weren’t making their way to the entire sales team.

Our thoughts
If we look at the number of new age companies sprouting up in every part of India, with or without investment, even if a small percentage make it through the market-product fit stage, they are likely to grapple with these problems. A few top-of-the-mind things that’ll need to be done to help improve the success rate of companies after this stage are:

  1. Investors can do a lot here. They can provide founders support to set-up their sales architecture and avoid standard problems. There’s a lot in it for them.
  2. CEOs should invest a certain amount of time learning about sales. At least the basic management knowledge about Sales Development, Inside vs Field Sales, Sales Org Design, Buyer Personas, Customer Segmentation, Sales Compensation and Rewards, Sales Hiring. There are enough books and stuff on the internet on these topics. If you’re finding it difficult to find the time, then pass on sales management to someone who can. The worst mistake a product CEO can make is to run the Sales team like the product team. These are two different animals.
  3. VP Sales need to be taken through an orientation and formal training process before the scale-up begins. Else, she’ll end up doing more of the same stuff as she did earlier which unfortunately helps very little at this stage or in future. Specifically, personality-driven, rainmaker dependent sales doesn’t scale.
  4. The conventional definition of Sales Reps is changing. Your extroverted, smart alec, a gift-for-the-gab salesman is unlikely to succeed in sales today. In a heavy product-focused environment will little information asymmetry, there are other qualities that maketh the successful sales rep — listening skills, asking right questions, ability to diagnose problems, brevity, story-telling, etc. The personalities that succeeded in sales in the 1990s are unlikely to make it to the top of the leaderboard today. Hiring needs to change accordingly.