Idea in brief: excellence, ambiversion, humility, lovability and servitude are a winning combination for software sales pros. Throw in a little provocation and you're off to the races.
Hiring practices are changing in front of us. Companies like Google are unveiling data that shows that typical patterns (school ranking, degree, brain teaser results, etc.) don't correlate with job performance. And many classic hiring approaches completely backfire.
What does matter? Well, at Google it's intellectual humility (embracing others ideas when they're better) and cognitive ability (processing information on the fly). Google also looks for an element of excellence that increasingly isn't based on a university experience at all: 14% of Google employees on some teams didn't graduate from college.
With a relatively robust 2015 likely ahead, many of AGP's clients are ramping up their sales teams. Accordingly, we often have conversations around what hiring criteria they should use.
Here's what we've learned, from building our own sales teams and helping others:
* Excellence Matters: the best sales folks have a light confidence that has come from success. There's no question about it: if they've been great before, there's a good chance they'll be great again. And accomplishments feed overall happiness, per Martin Seligman's research on positive psychology. But greatness can be demonstrated in many ways: music, sports, academics, service, volunteerism. The important thing is to look for people who have constantly worked hard and performed well against objective, measurable standards.
* Ambiverts Win: the old adage that says extroverts make the best sales people? Wrong, according to Daniel Pink, the best selling social psychologist who draws on work from Wharton's Adam Grant. It turns out that people who both listen AND communicate really well, and who are able to adapt to lots of situations, sell the best. And those introverts? They're only slightly less productive than the extroverts -- so don't count them out!
* Humility is Crucial: per Google's points above on intellectual humility, generally humble and appreciative people tend to do much better with companies over longer periods of time (at least in our experience). Have a candidate who refers to themselves frequently in the third person? Notice a big watch that seems to scream how well they've done? Pick up an overabundant tendency to suffer from the fundamental attribution error (e.g., "my success is because I'm great; any failures were circumstantial")? Chances are, these signals of a lack of humility will cause the candidate to struggle to do well consistently.
* Lovability is Required: we all make snap decisions, as Gladwell classically outlined in Blink. And with prospective clients for your company, time and again we've found that people buy from people that they like. And really, as Barbara Frederickson demonstrated, they buy from folks they love (even if they wouldn't describe it as love, their brains deeply appreciate a state called "neural coupling"). So, for hiring? Trust your snap judgement. If you don't "love" that prospect for a sales role immediately? Keep looking.
* Servitude is Rewarded: one of our biggest "ah-ha" moments in sales was when we realized we never had to actually sell anything. All we needed to do was genuinely help people in a way that made it easy for them to buy. Like Jim Collins' Level 5 leaders who blend deep humility with intense professional will, service-oriented sales people have a winning platform.
Finally, a recent trend in enterprise sales is the use of provocation, per the TCG perspective in HBR. While provoking buyers doesn't work in all situations, a sales person who knows when and how to be provocative has one more big tool in their kit to draw from.
Of course, you will want as much experience, chemistry and value alignment as possible. But given that, look for excellence, ambiverts, humility, lovability and servitude. And see if you can find a bit of provocative glimmer. Building a team of folks with these traits may not ensure that you win -- but it will dramatically improve your likelihood while helping you create a great company culture along the way!
As Alder Growth Partners has grown to serve more than 25 companies, while working with dozens of other CEOs and entrepreneurs informally, we're often asked: "how should we think about sales compensation in 2015?"
For SaaS and enterprise software companies in Austin (or markets like it), we're currently seeing a three tier trend. The below data is anecdotal and somewhat subjective -- but seemingly representative (and in line with head-hunter surveys and experienced sales folks' feedback). And it fits trends that we've seen over more than 15 years in B2B software businesses:
* Inside Sales/Market Development ($40K/$40K): for a junior seller expected to close smaller deals (e.g. <$50K per year) and/or develop opportunities for senior sellers, we're generally seeing a $30K to $50K base with an opportunity to double the base via 100% quota achievement.
* Emerging Sales/Account Executive ($75K/$75K): for a sales person with 3-5+ years of experience, capable of running face-to-face meetings and closing medium-sized deals (e.g. $50K to $150K per year), compensation is often in the $60K to $90K base range, again with an opportunity to double the base at 100% quota.
* Senior Sales/Account Director ($120K/$120K): for a strategic, provocative revenue leader, equipped to drive larger deals (e.g. $150K+ per year), navigate complex organizations, and comfortably work with C-level buyers at larger enterprises, compensation is usually in the mid $200s -- or even higher in many cases, with unlimited upside that takes top performers into the $300s and beyond.
Of course, the compensation models above also need to have appropriate quota, commissions, accelerators and other elements to them. And different models make sense at various stages of companies, especially early when equity might be a bit looser, cash is tight and ASPs (average sales prices) might be lower.
We'll tackle more thoughts on approaches and best practices in coming posts.
Telling your company story is critical. But how might you deconstruct and reassemble your messaging?
Below is a six part structure that provides an effective framework for a positioning hierarchy. There's also a real-world example that highlights this approach in action (props to Mike Maples, now with Floodgate, for the example and inspiration, many years ago!).
Six Elements of a Positioning Hierarchy
1) Market: start by clearly articulating what market you're in. An "enterprise software" company will carry a different set of strategies and assumptions than a "mobile solutions" firm will.
2) Customers: after you've clarified your market, turn to who you serve. A statement about enabling a vertical (like retail) versus a broader market (like brands) will convey important messages. Consider qualifying (largest, best, etc.) the types of customers you aspire to serve too -- as long as you can back the aspiration up with current examples (e.g., "our customers are the world's largest retailers").
3) Value: arguably, the hardest part of a positioning exercise is the value statement. For B2B companies especially, enabling, empowering, equipping and/or other "supporting verbs" carry an appropriate level of others-centricity. For B2B2C plays, consider also how your solution might impact your clients' customers too.
4) Benefits: with clearly defined market, customers and value statements, along with time in market with prospects and customers, you can turn to conveying 3-6 primary benefits. I'm a fan of three word benefits that link nicely to your value statement. They often start with a power verb (increase, reduce, enhance, improve, etc.), lead then to a descriptive adjective (e.g. real-time or high-impact) or narrowing noun (e.g. retail or marketing), and end with a stakeholder noun (e.g. management) or impactful noun (e.g. productivity or consistency). With this three word schema, you can mix and match a nearly endless array of benefit clusters. But be warned: it's very easy to wander into the land of cheesy!
5) Capabilities: features and capabilities often get mixed up. Features are very specific things that a product does. Capabilities are broad concepts that a product enables. For example, "collect data" is a capability, whereas "guided input forms" are a feature. Capabilities often roughly parallel benefits (i.e. you may use 3-6 capabilities for your product and/or company). And capabilities can have multiple dimensions as you think about end users versus operators, for example.
6) Validation: in a positioning exercise, it's important to help your audience know why they should pay attention to you. While it's easy to claim you're "the leader in" your market, unsubstantiated statements like those are generally ignored -- and sometimes are held against you as marketing fluff. Instead, list highly recognizable customer examples and/or key statistics to show why your audience should care.
With the six parts above, you can turn to utilization via marketing materials, sales training tools and more.
Here's an example of a press release boilerplate that roughly leverages the approach above:
"Motive, Inc. is a pioneer in helping companies to deliver technology management capabilities as an on-demand service. Motive's software adds self-management intelligence and automation to technology products and services allowing them to install, diagnose and repair themselves, or to guide users through simple steps when necessary. Companies worldwide have used Motive's software in connection with more than 30 million products and services."
Looking at this statement we can see Motive through our 6 part lens:
* Market: software
* Customers: product companies worldwide
* Value: technology management on-demand
* Capabilities: install, diagnose and repair (and guide)
* Benefits: self-management intelligence and automation
* Validation: used in more than 30M products and services
Note that there are often other aspects to a positioning hierarchy, such as a tag, campaign statements, and different length versions of an elevator pitch. Feel free to reach out with questions and let us know if you've used alternative and effective positioning structures.
Regardless of the framework you ultimately choose, if you can master something like the six part structure above -- succinctly, clearly and with pizzaz -- you are well on your way to great company positioning and messaging!
Classically, I've put two folks on new sales initiatives whenever possible. As a sales leader and executive I wanted to be able to test strategies, tactics and messaging, understanding when something might have been a flawed approach versus poor execution.
A friend of mine recently told me I was wrong and that I should have applied the Rule of Three. Why should you staff three people on a new sales project?
This friend, who has built a company of 500+ sellers generating $100M+ in revenue (and has also launched and sold two other startups), clearly knows his stuff. His concept of the Rule of Three is pretty simple but profound (like all great tips are):
Three sellers avoids "groupthink" and let's you best test a new initiative.
What do we mean by this? Well, two folks working together, in my friend's experience, often leads one strong willed person to influence the other more malleable seller. Two people end up operating much more like one, limiting true comparative testing.
When you have three sellers, ideally with very different backgrounds and experiences, it's harder for groupthink to develop. If two people go down a path that doesn't seem to make sense, the third will often push back and take a different approach.
So, while two sellers are better than one to test a market, I'd encourage you to apply the Rule of Three whenever you can to new sales initiatives. Of course, startups often have limited budgets and need to sell with the CEO and any/all other hands before hiring a first seller to begin. Accordingly, this model isn't always possible in all situations. But if you can afford it, I'd say go for it!
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Steve Semelsberger is the Founder of Alder Growth Partners.