Hustle U is Now In Session

The only thing better than failing fast is not failing at all. There’s definitely a non-negotiable learning curve to becoming an entrepreneur, but the right tools can make that curve flatter and cheaper. That’s why we’re building Hustle U—essential classes for startups, small businesses, and entrepreneurs.

Three classes are available now: Creating Your Performance Evaluation Process ($19), Building an Effective Sales Team (free) and Strategic Planning for Entrepreneurs ($49). We’ll be adding more classes soon. Let us know what you’d most like to learn by leaving a comment or talking to us on social. Or just call us at 205-530-3722.

Event: How to Build an Effective Sales Team

As part of Hallux Training, Redhawk will be hosting a free event that explores how selling has changed and what companies need to do to build competitive sales teams. Part presentation and part discussion, this event will provide an excellent opportunity to engage with sales experts who have built multi-million dollar teams and sold into some of the largest companies in the world.

During this event, we will discuss the following topics:

  • What happens when your sales efforts go wrong…
  • Relationship selling is overrated.
  • How to build and scale a successful sales team on a budget.
  • How to hire salespeople.
  • Discounting is not a sales strategy.
  • Companies that rely on tricks and shortcuts will, ultimately, fail to reach their goals.

This event is perfect for people looking to build a sales team for the first time as well as those who are looking at ways to improve their sales effectiveness. This will be an engaging and fun event open to anyone interested in learning how to boost revenue and build competitive sales teams.

Cost: FREE
Location: Redhawk Entrepreneur Development Company, 3027 6th Avenue South 35233

Click to RSVP on Facebook or Meetup. To receive notice of future events, like us on Facebook, join our Meetup group, or request more info on Hallux Training.

How to Survive the Zombie Client Apocalypse

If you’ve spent any time in sales, you have had a Zombie Prospect. You spent time preparing a great sales presentation. You navigated the organizational hierarchy, made the requisite small talk, and assuaged the fears of a skeptical purchasing department to deliver your proposal. You handed it over with a smile and your prospect said they would have an answer for you “in a few days.”

That was six months ago.

You’re not even sure if your contact still works there because she stopped returning your phone calls four months ago. But still it sits in your pipeline, and you ritualistically review its painful existence in weekly sales meetings.

You don’t get it. Your product seemed to be a good fit. The specs were right. The price was discounted below market rates. Your child even goes to the same elementary school as your buyer’s kid. This is the third time this has happened in the last two quarters.

Why do these prospects go full-on Walking Dead?

Most likely, they were never qualified in the first place. There are three things that need to exist in every opportunity to justify going through the pain and anguish of a modern sales process.

  1. Ability to Buy — I know this seems obvious but there are several reasons why a buyer may not have the ability to buy.
    • There may be no budget for the purchase or that allocation hasn’t been approved prior to your sales engagement of the buyer. In many cases, you called them—so they could be taking a meeting with you without the financial means to purchase anything.
    • They may be contractually obligated to a competing solution and breaking that agreement would be costly.
    • Buyers can window-shop for products and vendors just to see what’s out there. When you offer them a proposal, they would be silly not to take it.
  1. State of Flux — Something in their market, industry, or organization is changing and it’s forcing them to reconsider their ability to cope with that change. Starbucks started as a place to buy espresso machines and coffee equipment. Imagine if you were the commercial paper manufacturer that pitched Howard Schultz on your coffee cup line right after he returned from Italy and decided to open European style coffee houses all over the world.
  1. Urgency — There’s a penalty to the buyer if they don’t act. These penalties can range from financial penalties, increased risk, or loss of some competitive advantage.

Without these, you end up with prospects that never make a decision, or keep asking for additional information or changes to the original proposal. You get delegated to an assistant. There is some new “boss” that is reviewing it. The final approval is just a “week away.”

After about 30 days of being increasingly placated, you can’t even get your prospects to answer the phone or return an email.

You officially have a Zombie.

Salespeople are notorious for chasing bad deals. Once we admit that an opportunity is terrorizing a small village and eating brains for breakfast, we have to take it out of our pipeline, justify why the sale went south to our management, and accept that all of that effort was wasted.

The best treatment is prevention. This requires both the salespeople and their management to allow them to justify walking away from opportunities that aren’t qualified. Trust me—this takes a level of discipline and trust in your salespeople many managers aren’t capable of deploying.

Adding this kind of qualification demands some longer-range perspective. The amount of time spent wasted on deals that were never going to close is time that could have been spent building more reliable pipelines and closing credible opportunities.

If you’re a manager, let your salespeople walk away from unqualified leads. If you’re the salesperson, your sales skills are best spent on opportunities that aren’t half-dead already.

Survive the zombie apocalypse with Engagement Selling System. Learn more or enroll.

Stop Inflicting your Salespeople on your Customers

It’s a Tuesday afternoon, and your account manager just pulled up to their third sales appointment of the day. They whip out their iPhone and feverishly search Google for any information about the company they’re about to see. They find something about the last company picnic and skim the first three sentences of a blog from their former president before they run out of time.

Armed with this information, they walk into the appointment and proceed to conduct the exact same presentation they conducted in the previous 50 appointments. They ask rhetorical questions like “If I showed you how to make a million more dollars, would you be interested?” and “What keeps you up at night?” They regale the buyer with stories about other “customers just like them” they have “partnered with” and for whom they “delivered incredible solutions.” At some point, there’s a glossy piece of marketing material pushed across the buyer’s desk. Next, they awkwardly work in some inane comment about the picnic picture of the three-legged race in an unwelcomed attempt to build a “relationship.” Just to complete the tragedy this appointment represents, they proceed to offer a discount on the “standard price” before the buyer even requests it.

Our salespeople, who should represent themselves as professionals, have the most product knowledge, and display the highest levels of communication abilities are running around like a bunch of dilettantes.

They walk into meetings unprepared and proceed to deploy some atrocious combination of 80s era rhetorical sales questions and “hacks” designed to trick buyers into behaving a certain way. They use an identical approach and ask the same questions regardless of who the person sitting across the table may be. Regardless of the answers they get from those formulaic questions, the offered solution is always—like magic—the same.

Over the course of that 20-minute sales meeting, you inflicted your salesperson on that poor buyer.

You should be cringing right now—not because this scenario is disturbing—but because this is probably being done in your name as you read this.

Just in case you think I’m being dramatic, consider the following questions:

When was the last time you went on an actual sales meeting with one of your salespeople? What sales training have you provided? What resources have you given them since you onboarded them, authorized their email account, threw some leads across the company’s automated CRM, and wished them happy hunting?

Meanwhile, you demand increasingly difficult sales goals in tightening markets without providing support that will help them continue any measure of success. Salespeople tend to be fairly creative. They’ll find a solution in the absence of you providing one for them. Unfortunately, you may not like the solution they employ.

This is not their fault—it’s yours.

We regularly require our accountants to be CPAs, insist our programmers are certified, and expect our HR team members to hold SHRM memberships. Why don’t we support that same level of professional rigor for our salespeople?

In today’s shrinking world, competitors spring up daily, prices are being squeezed hard enough to be considered commoditized, and products are outmoded quickly. What you sell and how it is differentiated has become increasingly marginalized.

For every buyer, there could be four or five sellers.

Professional sales training is something you owe your salespeople, company, and brand. Most importantly, you owe it to your customers.

Effective sales training doesn’t necessarily cost that much when compared to what’s at stake. If the average salesperson were to improve their conversion percentage by 10% on a $500k annual sales goal, that translates into $25k in additional sales. Using our sales training program, Engagement Selling System as an example, we charge $950 per seat for our class. Most of the salespeople attending our training are responsible for generating more than that in sales revenue every day.

How you sell is as important as what you sell. If you have untrained and unprepared salespeople, the competitor who has invested in their own sales training is going to eat your lunch. According to Daniel Goleman in Working with Emotional Intelligence, the top 10% of salespeople produce double the revenue as an average salesperson with similar products or services.

It matters to your buyers that the salesperson you send them is professional and capable. If the peak of their powers is represented in the panicked efficiency they demonstrate when using a smartphone to dig up useless information about their buyer in the parking lot minutes before the scheduled appointment, you need to reinvest in your sales team’s training.

Learn about Engagement Selling System or enroll.

Why We Created Our New Sales Training Program

I’ve seen it time after time—small business owners who aren’t happy with their sales team or their results. They call me with a single goal in mind—help me hire better salespeople.

That’s rarely the solution. If you aren’t training your current team, you haven’t set them up for success. Adding more untrained bodies will only subtract from your bottom line, demotivate your existing salespeople, and increase competition for the same meager sales. Firing and replacing your underperforming salespeople doesn’t address the problems in your program, like poor sales management, a lack of performance measurement, poorly designed incentive structures, and misalignment between sales and marketing.

I’ve been looking for sales training to recommend to these clients, but the few programs we’ve found are woefully out of date for the current marketplace, and none address entrepreneurial businesses.

That’s why we’ve launched our new sales training program. It’s called the Engagement Selling System, and it directly addresses the chronic struggle entrepreneurs face building and growing successful sales teams. Entrepreneurs’ business development is different in almost every way from large corporations, but no one has designed an approach specifically with them in mind.

For entrepreneurs, cash flow is a continuous stressor as revenue peaks and valleys are part of the business landscape—29% of businesses fail due to a lack of positive cash flow. All businesses need revenue to survive, and they need to increase that revenue every year to grow without taking on debt or selling equity.

According to trainingmag.com, training is largely deprioritized by SMBs. The average amount spent on training per individual in small- to medium-sized companies has been as low as $554—or less than .02% of their annual operating budget.

When companies spend $5,000 or more for things like a great website, but spend virtually nothing on improving the capabilities of the people responsible for generating their revenue lifeblood, the writing’s on the wall.

We designed ESS to improve conversion rates and create sales professionals who are prepared to outperform their competitors. It’s not enough to have a great sales system, it has to be easy to use and applicable across the wide variety of circumstances salespeople face. The goal of our sales training program is to move the needle by giving your team an approach they can apply immediately and affordably.

Learn more and register.

How to Create a Commission Program that Works

One issue that routinely crops up with Redhawk clients is designing or updating their commission programs. Caught between not wanting to pay salespeople “too much” and losing them to more lucrative opportunities, managers will toil over excel spreadsheets full of random commission structures for weeks, then end up doing nothing.

Early in my career, I participated in several commission programs—most of which were horribly designed. They all suffered some combination of the following:

  1. The quality or quantity of work the salesperson expended actually had little effect on the goal being met. The market, organization, or product demand predetermined the outcome more than the effort of the person.
  2. The goals were simply ridiculous. No one would even try to reach them and instead spend their time figuring out how to live on the free saltines in the break room until they found a better gig.
  3. Sales priorities and commission triggers were poorly aligned with what the organization could deliver. A friend of mine was tasked with selling $150k of new business each month while production was maxed out at $50k.
  4. Commissions were being paid on top line even when the salespeople were delivering sales that were unprofitable.

Creating a commission program is not intuitive. It’s tough and not something that most people have experience doing until they’re forced to draft one. While there are also financial projections and considerations that need to be made, here are a few concepts to consider when looking at designing a commission program.

Be realistic

If your annual growth rate averages 12%, don’t benchmark the commission program to start at a 120% increase in sales.

Look for the Win/ Win

Ideally, any commission program should be beneficial for both the company and salesperson. Further, that win/ win should continue even if the sales numbers get huge.

Tie the Incentive to the Work Produced

If earning the commission is more about going through the motions as actually putting in the work, you’re only going to retain a mediocre salesforce. The high performers will leave because they can’t earn more through their exceptional work and the low performers get pulled into the average and fly under the radar.

Keep it Simple, Stupid

A salesperson should be able to figure out, without using differential equations, what they just earned when they got that signature. If the commission structure is too difficult to figure out, salespeople will perceive it as fundamentally tilted against them even if that isn’t true. It’s pretty hard to be motivated by something you don’t understand.

Align the Sales Goals with your Operation

When salespeople are asked to sell regardless of what the operation can deliver, you get oversold customers, pushed deadlines, and crappy deliverables. Additionally, if operations are incented on profitability where sales incentives are based on total revenue, they could be working against each other.

Commissions Influence Behaviors

One of our Redhawk clients was commissioning their salespeople more heavily on new customer sales then sell-through to existing customers, even though the sell-through revenue was much more profitable. They also asked them to call every existing customer once a month to see how they were doing and if there were any more opportunities to expand that relationship. Not surprisingly, those calls weren’t happening because the commission program discouraged that behavior.

The classic business article On the folly of rewarding A, while hoping for B is a must-read for anyone undertaking an incentive program.

Commissions Won’t Manage your Sales Team for You

While commission programs can drive behavior, it can’t drive performance by itself. Contrary to popular belief, a consistent underperformer who isn’t earning commissions won’t necessarily quit—you will still have to fire them. Incentives don’t help people develop selling skills, solve problems, or deliver superior customer experiences. Those things require an engaged and professional manager.

Make the Numbers Work

Think through what happens if a salesperson overperforms by 150%. Will you still love the program or will you have paid so much commission that your CFO has a coronary? I once worked with a terrible CEO who changed a commission program simply because he thought the salesperson earned too much money. Those sales were all profitable and wildly beneficial to the company. He rewarded that salesperson’s incredible year by reducing her pay by almost 30%. She left days later.

Get them to $100k

I don’t know why the magic compensation number for salespeople is $100k but you’ll have to trust me that number is the benchmark. To qualify this, I’m referring to mid-level and senior salespeople who have the skills and ability to generate 8 to 10 times that same number in revenue. Using a blended comp package of salary and commission to get to $100k is a general reference point to consider. If you can’t or won’t get to that level, consider re-engineering or simplifying the sales job requirements so a more junior person can be successful in the role for less money.

Decide if Commissions are Even Needed

Over the last decade, organizations have moved away from incentive-based pay in increasing numbers. Due in part to behavioral scientists pointing to the actual basis of motivation among high-performers, companies have elected to simply pay a premium salary. The foundation of the argument is that achievement is what motivates salespeople and they get that from closing deals—not getting commission checks. The thrill of the win keeps them working hard and the high salary takes care of their financial needs.

For Most Startups, Revenue Isn’t Optional

Your logo is badass, your product or service sounds really innovative and those business cards seem to be made out of some kind of cheetah fur.

I’m interested in hearing about how you plan to scale your user base and grow your adoption rates. I’m also interested in hearing about what conferences you are going to attend, the panels you plan to participate in and how you will attract that rock star CTO.

But I’m more interested in how you’re going to make money, how much you’re going to generate and when you’ll be at breakeven.

At some point in the not so distant past, there was a slide in a pitch deck that showed a potential revenue number against some trillion-dollar market opportunity that may or may not actually exist. Investors got excited about that logo, those sick business cards and that recruiting plan for the Michael Jordan of CTOs and stroked some funding checks.

Seven months later, you’re planning your four-month-long schedule for raising a second round because your expenses have outpaced your revenue faster than expected.

You had to re-design your UX, improve your security back-end and launch an expansive social media campaign. You gained thousands of users, received a few accolades for your startup and generated some revenue. You didn’t hire that sales guy you knew you needed or re-price the product to improve margins and instead spent that time, money and energy on making a better product and gaining users. Unfortunately, that sagging revenue is shortening your runway.

In a startup, you’re constantly prioritizing and reprioritizing work. The tension between product development, creating scale and maintaining positive numbers on your balance sheet can be a daily struggle. There are always more things to do than you have the resources to complete.

Generating revenue should be your top priority.

Like it or not, generating sales revenue is the path for success for most startups. Venture capital passes on all but a few of the deals they are pitched and less than half the tech startups will even attempt to pitch VCs. There may be no investor cash available.

We see the Techcrunch headlines and Medium articles about the startups that sold for $50 million even though they never actually created an operational profit for themselves or their investors. Behind that small selection of successes lie the other 90% of startups that folded. Running out of money is usually cited in most of these collapses as a primary cause.

Think about the optionality sales revenue provides.

  • The option of pivoting your offering.
  • The option of going after your competitors more aggressively.
  • The option of taking a risk on a new set of features or an additional product line.
  • The option of reinvesting the profits back into the growth of the company.
  • The option of upgrading your human capital.
  • The option of taking on additional investors or bootstrapping your growth.

Sales revenue also provides a wider margin for failure. Your financial projections, budgets and planning are mostly works of fiction so when something doesn’t go the way you need, that extra cash will certainly help you smooth out that rough spot.

Lastly, generating positive cash flow is a signal to future investors, employees, vendors, and other stakeholders that the product is viable and worth their participation.

Sales isn’t as fun or sexy to talk about as UX or branding. You usually can’t do it at 2am or between rounds at the shuffleboard table. But if the rest of you want to eat, you need a solid sales program staffed with competent, motivated people. If you’re not sure where to start, give me a call.

Your Customer Experience may be Killing your Company

Recently, I had some web development work I needed to complete as part of a larger product launch. Not having any resources in house, I started talking with several companies who specialized in the work I needed done. Each of the four companies I engaged was a referral from a trusted source and their work product was exceptional.

After creating a specifications document and scope of work, I scheduled and met with all four companies in person or virtually. Three of the four companies asked a few questions, agreed to get me a proposal and we ended the conversation.

The customer experience to follow was appalling.

Company A: They never called into our scheduled conference call to discuss the project scope or specifications. Ten minutes past the scheduled start time, I emailed them to ask if they were unable to make it. Three hours later I received a short email saying they had been tied up and asking if I could call them now. No apology. No explanation. Nothing.

Company B: After a productive conversation about the project, they agreed to provide a proposal within the next 4-5 days. On the 6th day, I received an email saying they were not going to be quoting the work because another big project they were waiting on called them right after our initial meeting to tell them they won the bid. They sat on this information for 5 DAYS before telling us they weren’t going to bid on the work.

Company C: These folks were probably the most comprehensive in all of our initial meetings. They asked quite a few questions and took the time to understand all the input and outputs and the relationships between them. I was quite impressed. Leaving the meeting, I was told we should expect to see a proposal in the next “few” days. Five days later I received their proposal. It was three times as expensive as the next quote and would take 4 times longer to complete than the next longest timeframe proposed.

Company D: Similarly to the B and C conversations, we had a good initial meeting but I received an actual number for the cost of the project. It was presented as a “minimum” they charged for any project. The cost was reasonable even if it was perceived as a confrontational way of approaching pricing. Ultimately, we chose this company to complete the project. We made the decision around 5:00pm on a Friday and asked if we could meet them somewhere to deliver a check so they could start work on it the following Monday. No one was at their office. After another 90 minutes of texting and emailing to see if they could agree on a spot to meet, the founder finally agreed to meet me so I could give them a check. They took on the project, delivered it on time and within budget. Their project/ account manager could not have been more professional.

Unfortunately, there was not an encore performance… Based on the initial project, we asked Company D to quote ongoing development we have in the pipeline and, again, we had a productive conversation and an agreement that a proposal would be sent in a few days.

Eleven days later, I received a text asking if I could talk with their sales guy again before he sent the proposal.

Eleven days…

During an industry meeting a few weeks later, I was discussing my experience with a friend of mine who works in a successful SAAS company and he was surprised these were the only issues I had. He then regaled me with tales of a dozen other companies committing similar or worse gaffes. Apparently, this was somewhat of a norm. It was appalling.

All of the companies we approached for this project are technically proficient and represent some of the best in web development shops. Their founders are fully engaged and they are, for the most part, growing their business at a more than respectable pace. However, it was clear that each of them lacked any real focus on creating a strong customer experience. No matter how good a company’s product or service, the customer must have a great experience buying and working with them. Here are a couple of things to consider when looking at the customer experience you have created.

  1. Communication: What are your expectations for communicating with a customer? How fast should an email or voicemail be returned? What happens when a deadline is going to be missed? Who takes responsibility for deliverables that aren’t met? Does everyone know what these expectations are?
  2. Reliability: Nothing makes me want to fire a vendor or partner faster than flakiness. Do what you say you are going to do. Meet deadlines. Satisfy expectations. Be accountable.
  3. Take their Money: Never, ever make it difficult for someone to give you money. Blow up any obstacles in the way of their money making it into your bank accounts.
  4. Know your Market: Don’t send proposals with pricing that is completely out of whack with your market and potential customer base. Not only will you not be seriously considered, you also wasted a lot of time putting it together.
  5. Communicate Bad News Fast: Company B knew they weren’t going to be able to take on my project 10 minutes after our first meeting but didn’t communicate that with us until 6 days later. Bad news is bad news but dragging your feet in communicating with a client only makes it worse. They wasted our time and time is a precious commodity.
  6. Integrity: None of the companies we spoke with appeared to do anything that wasn’t completely above board but it is worth mentioning here that this is fundamentally important. Great reputations take a lifetime to build but only a moment to destroy.

If you are debating the merits of this list or why you should spend time worrying about how your customers feel about working with you, consider that the development we are exploring represents about $250k worth of work at the current billable rate. Three of the four companies we spoke to will never have another opportunity to bid on that work simply because their initial delivery and behaviors were so poor.

Every company can audit their own experience using a myriad of processes and hire external firms to do it for theme. Since I work with a lot of startups and entrepreneurs, I might suggest a couple of simple actions.

  1. Ask three different people in your org who are responsible for customer deliverables what happens when a deadline is missed. If you get three different answers, you have a problem.
  2. Have a friend or colleague mystery shop your company. Have them fill out a web form or send an unsolicited email and ask them how long each step took and what they thought of their experience. Choose someone you know will be honest with you and let them provide a critique.
  3. Talk to your customers and ask them what they think. This doesn’t have to be overly formal- just a conversation. If you can talk to customers who fired you, do it. They can offer incredibly valuable feedback.

Lastly, don’t be scared and don’t let your ego get in the way. Ask your people and yourself some hard questions. Your product may be the absolute best but if your customers are having a dismal experience working with you, the product can’t carry you forever.

If you don’t understand your success, you are going to fail

You just got the email—you lost that deal to a competitor… again. This was the big one. The contract that was going to set your future success and allow your firm to grow its revenue and reputation.

Meetings are called immediately to review why the deal was lost, where it potentially fell apart and how you will take steps to make sure it doesn’t happen again. The sales management team, senior leadership and even the salesperson trying to consummate the deal are all in the room to pour over each detail.

This, of course, is both a reasonable and effective strategy to push improvement in your business and work toward losing fewer deals in the future.

But let’s flip the scenario.

The call comes in letting you know you won that deal you have been working 6 months to close. This was a big one. The contract that is going to set your future success and allow your firm to grow its revenue and reputation.

Immediately after, congratulatory emails and calls are received and maybe your team goes to happy hour to celebrate.

There is something missing here.

Why was there no meeting called to review the win? Why did you win it, where did the deal all come together, who stepped up? Most importantly, how will you make sure it DOES happen again?

We are quick to find faults and critique failures in our business efforts—it’s what business schools, mentors and continuous improvement experts have taught us to do. We are really good at it. Why, then, do we not apply that same discipline to positive outcomes?

Having spent quite a few years in sales, this hypocritical scenario played itself out with the reliability of a Swiss watch. Losses are examined, dissected and even used as political fodder among conniving managers bucking for the next promotion. Wins are usually recognized, briefly celebrated and then fade quickly among the competing business priorities.

Not understanding your success is a direct route to failure. Assuming your business wants more successes, it only makes sense that you should understand what made you successful in tremendous detail. Simply looking at where you failed provides a “Don’t do” list. Wins provide part of the road map for your organization.

Start looking at your wins and go back, where possible, and look at previous successes. This is not just an exercise for sales. Organizational successes happen every day in your HR, finance, recruiting and IT departments. Understanding WHY and HOW you won are as important as why you may have failed so treat those wins with the same scrutiny. You should know how to replicate your success as much as avoiding failure.

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