Saturday, May 14, 2011

Startups & Sales Issue: Attracting & Compensation of Sales Person

I was fortunate to attend a business startup meeting in Downtown Toronto in the financial district. It was a great experience to see the importance of entrepreneurs helping each other even when their competition was in the room. I was asked for my expertise on sales and marketing in relations to startup businesses. Some of the audience members were not sure how to attract and compensate sales people.

My advice to them was to think about their business from the perspective of a VC because in some ways sales people are like VC. They are looking at the leaders, products, training, culture, vision, customers, connection, competitive advantages, process, ROI, and so forth of a company.

When it comes to compensation, for startups with no money, you can always negotiate with the sales rep. The sales person is going to weigh the risk-to-benefit both short term and long term. My suggestion, the riskier the opportunity the more sales people should be compensated, also considering experience, and product sales cycle. It can consist of living wage salary and a significant commission percentage or stocks and significant commission percentage. In addition, do not treat your future sales rep like pawns, dispose of when you no longer need them because there are a few who will retaliate in a way that will drastically damage your business.

For you guys who know nothing about selling or sales process. If you contact me, I’ll be glad to put together a quick, simple guide, tactics which can be used by beginners or business owners. I also recommend reading about Mary Kay Cosmetics, and IBM or simply work for a company looking for sales people on a PT basis. There’s no better way to build character then taking a sales job.

Also note that the old ways of selling is gracefully dying. There was a time when consumers depended on sales people to educate them now the power as shifted. Today’s selling is more about: partnership, advice, assistant, customization, retention, and relationships.

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