Millennials Should Sell: Part 3

I’ve articulated that sales is often marginalized (sometimes rightly) but also serves as a powerful corporate development tool when done intentionally.

An entire post could be written on what the hiring manager on the other side of the table wants to see (and it has). Here I will touch on several benefits of beginning a career in sales to the recent graduate. Don’t be surprised if a tinge of regret emanates from the page and this post reads like an open-letter to a much younger version of myself.

Feeds natural curiosity:

You, the recent graduate, exude confidence, idealism and curiosity. What better time to take on a structure and trajectory that harnesses your natural curiosity? In sales, you are immediately exposed to a range of company sizes, cultures, industries and functions. Behind the veil of job titles and corporate bureaucracy, you will work with real buyers who are actual people. Do you like what you see in them? Sales is a great (paid) way to evaluate.

Develops coveted leadership skills:

Getting from lead generation to signed contract requires an enormous amount of cross-functional finesse. Early in my career, I sold health benefits to large corporations. An average deal required that I coordinate internally with data analysts, underwriters, actuaries, proposal writers, countless subject matter experts and my sales leadership. Ultimately, I was the one on the hook to get the deal across the finish line and was compensated (or not) accordingly.

Getting alignment and cooperation from a network where you have no hierarchical authority is a skill companies are looking for at their highest levels of leadership. Those who figure it out accelerate past their peers. How does that sound?

Quantifies contribution:

An age-old method to filter sales candidates is asking for your most recent W2 statements. The thinking is that a sales person should either make a substantial amount (varies by industry) consistently if he is successful, or should make an escalating amount each year as he is given greater responsibility and is successful.

As much as this tactic makes my skin crawl (it is the professional equivalent of an arm wrestling match), there is a reason sales managers use it – a successful sales rep can show proof of success on his pay stub. In sales, we have a scoreboard. Our output is binary. Did we produce revenue or not? Try asking an interviewee for a human resources position to show you their last three pay stubs…

Forced to improve communication skills:

By constantly interacting with customers, you are always performing. Every cold email, cold call, LinkedIn interaction, demo, face to face meeting, internal strategy meeting and sales round table gives you the chance to practice communicating clearly and effectively.

Although any role includes elements of sales, client-facing selling is particularly valuable for developing communication skills because you receive instantaneous feedback. Not only do you find out whether your good/service appeals to your prospect, but you find out whether you made any sense at all. Sometimes clients are candid and tell you a pitch is horrible, but more often a pregnant pause or squint of the eye sends just as valuable a message.

When you’re asking for someone’s money, they tend to be honest with you.

Control earning potential:

As the saying goes, in sales you eat what you kill. Whatever sales role you assume, you have a portion of compensation that is variable, tied to KPI’s such as customer retention or acquisition, revenue, profitability, etc.

As a former collegiate wrestler, I wasn’t yoked to under performers when I stepped onto the mat to compete. It was important to be pushed in training by good teammates and to chase team goals, but between the competitive lines, it was me versus my opponent.

Sales provides the same type of individual reward. Rather than punching a time clock, you choose an achievement mentality that is rewarded with measured wins and losses. If you win more, you also earn more. Sometimes a lot more.

In what other ways is sales a good career gateway? What caveats would you include?

Millennials Should Sell: Part 2

In my previous post, I suggested that beginning a career in sales serves both the companies hiring talent and the talent being hired. I will tackle the company’s perspective in this piece.

As the millennial workforce continues to cry out for development plans over health benefits, creating more specialized sales roles offers companies the chance to create a dynamic and structured career path that might just be attractive enough for young employees to outlive the 18-36 month expiration dates they carry along on their career passports.

At a very general level, a simple sales career progression in a SaaS company could look like this:

Inbound lead qualifier => Outbound prospector => Outbound lead generator => Inbound/outbound sales demo team => New business executive/Account executive => Senior new business executive/Account executive

This example has several trail spurs that could be spun off creating even more possibilities. The key takeaway is that creating multiple areas of specialization suits a company’s need to increase bench strength through internal development and retention.

1. Clear Development Plan:

Specific metrics to progress to the next stage can be attached to each of the roles suggested above. For example, if a new inbound lead qualifier passes 50+ qualified inbound leads to the inbound sales demo team each month for 3 consecutive months, he automatically gets promoted to become an outbound prospector. No ambiguity. When his manager sits down for a coaching review, the rep knows why he did or did not progress and control when he can expect another change. Just like in Monopoly, if you do not pass “GO” you do not collect $200. It’s simple.

Some new hires will not hit the necessary metrics. Once the criteria has been calibrated internally and talent acquisition has a clear employee persona to target, roughly 2 out of 3 hires should progress to the next role in the average period of time. In the example above, 2 of 3 new hires should move to the outbound prospecting team within 3 months of getting ramped up.

But what happens if they don’t?

2. Not Wired to Sell?

There will always be candidates who fit your company culturally and pass the assessment to begin in sales, but cannot perform. By hiring younger talent and measuring from the beginning, you position your company to redeploy good people away from sales roles into customer service, operations, marketing, or other areas that fit their skills and company needs.

This comes at a much lower opportunity cost than pursuing mid-career hires exclusively, cutting underperforming reps immediately, or worst of all, allowing marginal performers to slip through in perpetuity – yuck. Although hiring younger doesn’t spare you the pain of every mismatch, it gives you lateral and vertical flexibility to develop talent that fits your organizational culture.

3. Accountability/Ownership:

Every company owner would like employees to treat the company as if it were their own. By creating a culture where your people swipe corporate cards like real money, problem-solve with a view of commercial impact and generally making decisions with a full understanding of profitability and revenue creation, you largely circumvent the yoke of presenteeism.

We’ve all worked with empty-suits. My Texan friends refer to them as “big hat and no cattle”. No one wants to knowingly hire an empty suit. By using sales as a pipeline development tool, more of your young workers are directly exposed to customers and bear the positive stress of a quota. Any lessons learned in sales will not be soon forgotten as these employees migrate into other departments. The stress of meeting a quota and having objective measurements monthly, quarterly and annually gives each of us an owner’s mentality.

What other areas does it benefit a company to consider sales as a millennial development tool?

Millennials Should Sell: Part 1

I was on a discovery call with a well-known automobile manufacturer recently and it got to that point where acknowledgement of incompatibility was imminent (for now). I hate this part because I hate losing, even if temporarily.

As this conscious uncoupling was taking place on the phone, the prospect was gracious enough to give me one last chance to make a 90 degree turn from our imminent breakup. All I could muster was “Well… that’s too bad…” to which he quickly replied “Of course the sales guy would say that!”

Having very little to lose at this point, I dryly retorted “Not sales guy… consultant”.

Hearty laughter on both sides. The call ended a short while later.

I’m not here to defend all of the sales guys who are rightfully marginalized for their smarmy, fraternity sales approach. By providing you with a paycheck, however, your company implies that you offer them value. To continue receiving said paycheck, you either create value (read “revenue”) or the perception of value to your boss. We are all in sales. I’d like to offer a few ways to rethink sales roles as both powerful corporate development tools and an attractive entry point for young professionals.

1. Corporate Development Tool:

Mid-career hires are expensive while early-career hires are cheaper. Sales aligns the incentives of young talent with corporate objectives.

2. Attractive Entry Point:

If successful, young hires can make more money and get exposed to more powerful people in a business at an earlier stage than counterparts with positions that read “analyst” or “associate”.

I will tackle both of these separately and more completely in subsequent posts. In the meantime, how else is sales rightly marginalized? In what other ways should it be elevated?

The Power of Enthusiasm

Most people watching Duke play Wisconsin in this year’s NCAA finals became acquainted with Grayson Allen for the first time. He didn’t play in two of Duke’s first eight games and saw more minutes on the bench than on the court for the majority of the season. In the NCAA Championship, the freshman scored sixteen points and was the clear emotional catalyst for the Blue Devils.

The most interesting aspect of Grayson Allen’s development this season (IMHO) is what Coach Mike Krzyzewski asked of him during their preseason one-on-one to discuss his role. Rather than discussing strategy or tactics, Coach K told Allen his role was to be “enthusiastic.”

Anyone who saw Duke clinch the NCAA Championship this year could see that not only did Allen develop as a player this season, but he took his role very seriously. He was the heartbeat of the team during a tenuous stretch in the second half where Duke found itself down by nine points. Allen was tenacious and above all else, enthusiastic.

Below are three reasons I value enthusiasm as highly as talent and intellect.

1. You can control it:

Some make the case that talent is more than pure natural ability; that it is the output of lots of hard work, involving a series of intentional choices to develop a specific skillset. I have no reason to disagree. But I still choose enthusiasm.

While talent takes a variable amount of time to develop, I can elect to be enthusiastic immediately and the effects are instantly noticeable once a 100mg dose of morning caffeine hits my bloodstream. (Before coffee, I can’t even spell “enthusiasm”).

How enthusiastic are you at home or work? What would change immediately if you focused your energy on being more enthusiastic?

2. Demonstrates buy-in:

Employees who are enthusiastic buy in to your mission. When you hit a rough quarter, you look to the enthusiastic leaders to right the ship. Without enthusiasm, all the talent in the world will not be motivated to make any progress. You know the old saying about adversity. It doesn’t build character, it reveals it. Enthusiasm gets you out of it.

What crisis are you in the midst of currently? How can you pour more enthusiasm into finding a solution?

3. Creates a lead domino:

The most compelling argument in favor of enthusiasm is that it is contagious. For anecdotal evidence, I am forced to look no further than my two oldest daughters. When either of them hear mention of an ice cream sandwich, pandemonium breaks out. Both of them go nuts.

The youngest doesn’t even like ice cream sandwiches. Nevertheless, when she sees her sister’s exuberance that ice cream sandwiches are in play, she matches pitch and volume. Things escalate quickly.

Are you surrounding yourself with enthusiastic friends? Do you value enthusiasm in the hiring process?

What are some other areas where you find enthusiasm valuable? Any good examples?

The Game Inside The Game

Stephen Curry’s star has risen incredibly in the last decade. Most sports fans met his acquaintance during Davidson College’s run to the Elite 8 during 2008, but he has since become a household name among NBA fans. He received more votes for the 2014 All Star Game than LeBron James. During this year’s NBA Finals, commentators refer to Curry at “The MVP” rather than using his given name – which is appropriate since he beat out icons like Westbrook, James and Harden for this year’s NBA MVP award.

One commentator described Curry’s approach to shooting as a “game inside a game”. For example, Curry doesn’t just shoot a three-pointer by aiming at the target. His goal is not to hit the rim at all. Although the ultimate intent of the shot is to score three points, by focusing on a more specific target (perhaps a cross-section of the net behind the rim), The MVP is able to stroke three pointers more consistently and measure success more specifically. To increase his shooting %, Stephen Curry creates games within games to increase focus and likelihood of success.

This technique is common outside of basketball as well from Navy Seals to NFL Kickers. Kickers often train by aiming at the goal posts during practice and keep copious notes every single kick during warmups, practice and competition. Although the ultimate goal is to be prepared when their service is required during games, applying rigor throughout preparation makes the output under duress more predictably successful.

LeadUp applies this “game inside the game” approach to developing and focusing sales teams in an area that is key to our business: contact quality.

Have a look at our website for more information on how LeadUp grows clients’ revenue.

ELEVATE ACTIVITY METRICS IN YOUR BUSINESS

Our business lives and dies on the quality of lead generation we provide for our clients. It’s doubly important for our team at LeadUp because our sales process internally mirrors the service we provide to clients. If we aren’t sourcing targeted and validated leads to approach prospects, then we waste effort reaching out, miss opportunities and our revenues stagnate.

Our ultimate goal is to dramatically increase our clients’ sales success. If that happens, we’ve probably ticked some boxes along the lines of staying cash-flow positive, hitting critical MRR/ARR targets, target # of clients, raising outside investment to scale growth, etc. Just like the accumulation of Steph Curry’s made-shots equated to an NBA Championship for the Warriors, LeadUp’s success rests on the accumulation of accomplishing these goals.

For LeadUp, our success hinges on consistently hitting these activity-based metrics. We need to source quality leads for ourselves and our clients, consistently. This is the single most important metric in our business because any success will be an outpouring of doing this well.

What is your activity metric that measures your game within the game? What success/failure have you experienced focusing on activity over outcome?

A Portrait in Tunnel Vision

My wife and I recently watched Jiro Dreams of Sushi on Netflix and came away inspired. For those of you not familiar with Jiro Ono, here is a quick list of his accomplishments:

  • His sushi restaurant was awarded three stars by the Michelin Guide; the only sushi restaurant to have received such a distinction
  • He is considered “A National Treasure” by Japan
  • There is a three month wait for a reservation at Jiro’s restaurant
  • A meal at the restaurant costs upwards of $300 and lasts fewer than thirty minutes

In the same way that a symphony has movements, a meal at his restaurant has layers of richness that build upon and complement one another. Jiro’s meal is created with an eccentricity and attention to detail few in any vocation can replicate. For example, Jiro takes note of whether his patrons are right or left-handed and seats them accordingly for maximum comfort and pleasure. He creates portion sizes with each successive piece of sushi according to the size of his guests and pace at which he perceives them to be eating to ensure the group moves through the meal together.

We can learn many lessons from Jiro Ono, but the one I’d like to focus on is his tunnel vision. In Roger Ebert’s review, he surmised that even while making love, Jiro regrets wasting sushi-making time. Jiro’s compete obsession has him constantly dreaming up (literally) more fantastic ways to serve sushi.

Here are a few of my takeaways and recommendations you can apply when building your sales processes:

World-class specialization

“I either buy my first choice, or I buy nothing. If ten tuna are for sale, only one can be the best. I buy that one.”_Hiroki Fujita, Jiro’s Tuna Guy

I was particularly amazed during scenes where Jiro and his son Yoshikazu headed to the market to buy fish that would become their sushi dishes for the day. They only dealt with the best buyer of each fish. Jiro has a tuna guy, an octopus guy, a shrimp guy and even a rice guy!

Jiro isn’t shopping for ingredients at Costco and expecting three Michelin stars for his effort. He is surrounding himself by the very best in the world, specializing in each component part required to compose the very best sushi.

How are you looking at your revenue targets and building a world-class team of specialists at each level? Are you empowering and incentivizing the right behaviors?

Rigorous training

“These days the first thing people want is an easy job. Then, they want lots of free time. And then, they want lots of money. But they aren’t thinking of building their skills. When you work at a place like Jiro’s, you are committing to a trade for life.” _Jiro’s Shrimp Dealer

Jiro’s son Yoshikazu is fifty years old and still works at his father’s restaurant. A plot twist at the end of the film, however, revealed that when the Michelin Guide judges ate at Jiro’s restaurant, it was Yoshikazu who prepared and served all of the food.

Jiro and Yoshikazu apprentice a full staff and train them rigorously with a view of creating master sushi chefs. The commitment for all parties is immense.

When you hire an SDR, you aren’t hiring an employee into that job for life. In order to develop your talent with the right mindset, you should hire only those you can see running a division of the company one day. Performing the role of SDR isn’t glamorous, but you can expect higher output when there are clear expectations regarding what metrics need to be met to progress.

How do you approach hiring and training? Do you set clear expectations on what activity and results merit promotion? Are you hiring potential and developing skills?

Repeatable processes

“Our techniques are no big secret. It’s about repeating a process, and getting better each day.”_Jiro Ono

Throughout the film, the camera focuses on the sushi chefs pressing the fish and rice into perfect sushi. Again and again. Rather than perfecting the sushi roll and expanding into more exotic cuts of fish or increasingly complex flavors, Jiro and his staff continue to perfect the individual steps in the process.

There is merit to creating intelligent processes, but I have learned a valuable lesson in my career. Any process is better than no process. And a great process is better than a good process. A sales organization is only able to discern gold from pyrite amongst its salespeople and its methods when there is a baseline against which all hires can be objectively measured. These measurements need to contain activity and output-based components – not merely checking whether a rep hit their monthly quotas.

Do you have a process in place? If so, how are you measuring its effectiveness?

Constant refinement

“I do the same thing over and over, improving bit by bit. There is always a yearning to achieve more. I’ll continue to climb, trying to reach the top, but no one knows where the top is.”_Jiro Ono

When Jiro’s restaurant was first awarded three Michelin stars, his team prepared the octopus sushi with a thirty minute massage. At the time, thirty minutes was standard practice in the sushi community. Eventually, they determined that forty five minutes was more effective and now spend that amount of time on the octopus massage.

Forty five minutes. Massaging a dead octopus.

Jiro’s commitment to perfecting his craft is evident – even the dead octopus will tell you that. By focusing on the existing menu items, Jiro’s team is able to refine existing processes and improve an already acclaimed menu.

Did you exceed your targets last year? How are you learning from what you did well and doubling down to increase the repeatability and intensity of those activities?

The Risk of a Failed Sales Hire

Early in my career I was fortunate to be hired into a high potential sales training program with a major health insurer. The cost to the company to train eight early-career hires and get us ramped up selling was approximately $1M per person. During this time, the eight of us lived in corporate housing, flew to site visits around the country and schmoozed with executives regularly before finally getting drafted by different sales markets into various sales roles.

The company’s break-even on investment in each of us was roughly 3 years, depending on the role we ultimately ended up performing in our respective markets. Fortunately for my young conscience, I moved into a key accounts role quickly and expedited my employer’s break-even before eventually turning a modest profit for them. I lasted three years and six months, and notably, outlasted six of the others in the program.

There is a key difference, however, between this Fortune 100 healthcare company and most other companies. The healthcare company had over $1B in free cash at the time and could afford to gamble on unproven and expensive young salespeople. The upside potential of bringing in the next market-making leaders was much greater than the downside risk of losing several more who couldn’t hack it.

For any company not in a cash-rich position looking to grow billions into zillions, I provide the following illustration. Consider the implications for your business and how you have either addressed or neglected quantifying the risk presented by prematurely hiring sales executives into immature markets where you don’t have mature clients, haven’t invested in marketing or targeted outbound lead generation activities.

Formula:

Cost\ of\ Ramping\ up\ New\ Senior\ Sales\ Executive\ =
\left (Monthly\ Base\ Salary + Monthly\ Target\ Incentive\right )\ \time Average\ Deal\ Cycle\ in\ Months

New Hire, Sales Closer Role (Mid to High)

Yearly Base Salary, $72,566 to $123,028

Yearly Commission, $17,000 to $68,837

Formula (High), \left (\frac{$123,028}{12} + \frac{$68,837}{12}\right )\ \times\ 6\ \approx\ $96,000

Formula (Mid), \left (\frac{$72,566}{12} + \frac{$17,000}{12}\right )\ \times\ 6\ \approx\ $45,000

Cost to Ramp Up, $45,000 to 96,000

Assumptions:

  • Simplified sample calculation based on two factors: base salary AND commission/performance incentive
  • Including high and median based on “Senior Sales Executive” role profile on payscale.com
  • Average deal cycle is assumed as 6 months and length of incentive guarantee assumed to match
  • Incentive attained (e.g. $17k for median example) matches 100% of annual goal and guarantee matches prorated target incentive

These estimates are a minimum range for successful executives and high performers brought on mid-career often command much higher incentive schedules. For the sales executive on the higher end of the illustration, you have invested nearly $100,000 before you can rightly gauge if they will be successful with your company.

I’m not contending that salespeople aren’t worth large sums of money. They certainly can be because they can directly impact even larger sums of money flowing through the company doors. Companies are lucky when they find good salespeople and should compensate them well.

What I am suggesting, however, is that if you choose to hire sales executives without the support of marketing and lead generation activities to fertilize their efforts, you shouldn’t be surprised by failure. When sales execs get bogged down managing the entire sales life cycle via multiple data sources, they often lose confidence and focus. Failure is not imminent, but highly likely. $100,000 spent to ramp up a new sales executive without proper market preparation will likely be squandered and both of you will feel disillusioned as you part ways.

How have you made sure your new sales executives are positioned to succeed? What other elements should you consider before hiring in new salespeople?