An unfortunate mistake inexperienced entrepreneurs often make is thinking they can just build a good product, do some clever advertising and marketing, and the customers will come. Or, that they can simply get the product to market by just engaging a distributor or retail chain to stock it. These simplistic notions come apart quickly and entrepreneurs soon learn that they have to be thoughtful and purposeful about building an appropriate selling organization.
Early-stage companies seldom have the funding to build an in-house sales organization right off the bat. Unless you are selling directly to your consumers via the Internet or direct mail, your sales efforts will probably be conducted by some combination of you as the entrepreneur and one or more middlemen organizations – wholesalers, distributors, and manufacturer’s representatives — who sell your product along with those of noncompeting manufacturers. Depending on your arrangements, these channel partners may buy the product outright or sell it on commission. They may even offer value-added services, such as financing, physical distribution, and service.
As you grow, you will want to invest in developing your own sales organization. Direct selling gives you more control over the sales positioning, targeting, contract negotiations, and after-market upgrade and cross-sell opportunities with clients. Depending on the complexity and price point of the sales opportunities you are pursuing, you will need to decide whether you need inside salespeople, who typically handle smaller-value sales via telephone and email, or field salespeople, who typically travel to the prospective customers’ sites. If you’re selling to big national or international clients, you’ll also need to consider a specialized national sales force that can coordinate activities across geographic sales territories to maximize sales within each of those major accounts.
Other considerations for setting up your own sales force include:
- Whether to employ an industry specialization strategy. Some companies hire industry experts to serve as salespeople, adding deeper credibility to the relationships they develop with prospective clients.
- How to divide territories for maximum sales effectiveness. It is important that each salesperson have a certain amount of exclusive territory in which to develop account relationships and knowledge. Territory can be defined by geographic, industry, or other means.
- Sales management. Individual salespeople need to be freed to do as much selling as possible. Excessive requests for other roles, such as customer service, reporting, and management tasks, will undercut their time in the field in front fo customers and should be avoided.
Salesforce Planning & ManagementSales organizations are expensive to build and maintain. An attractive compensation plan will attract the best qualified people, and is usually made up of some base salary plus benefits, an expensive budget, and a variable commission rate based upon actual sales completed. Standards vary by industry and by region, so check what other companies in your industry pay before deciding on the right compensation mix for your enterprise.
Once you’ve hired the right people, be sure to give them adequate direction. Your selling messages and supporting materials must be crystal clear, and your training must prepare them to answer typical customer objections and concerns. Experienced salespeople will already know how to prospect, how to develop and deepening relationships, and how to close a sale. Your marketing organization should be carefully honing demand-generation and lead-generation campaigns that help your salespeople spend maximum time in front of prospective customers, selling.
- Your EVE Podio Account: go to the Sales tab and add “Sales Checklist”
- Lally School Entrepreneurs In Residence (EIR)
- Exemplar’s Program
REGISTERED EVE BUSINESS MENTORS & PROFESSIONALS
CAPITAL REGION SALES ASSISTANCE
- Small Business Development Center: Marketing Plan Development
- Center for Economic Growth (CEG): Strategies for Increasing Revenues