The following is a pretty common scenario among investors…
The entrepreneur comes in and shows them their product and/or service. The investor is somewhat impressed and asks the entrepreneur why they need money.
The entrepreneur responds, “I need the money to hire salespeople. I have a great product/service, and if I could only afford to hire 5 salespeople, my sales would skyrocket.”
While intuitively this makes sense (i.e., hire salespeople and sales will go way up), the smart investor will want to minimize their risk. Mainly, they’d want to see that the entrepreneur has already hired one salesperson and achieved positive results. This would imply that adding more salespeople would significantly improve sales.
So, the investor would ask, “have you hired one salesperson yet?” To which most entrepreneurs would unfortunately respond “no.”
Now, one entrepreneur who I recently helped answered “yes” to this question. He did recently hire a salesperson. But unfortunately, the salesperson hasn’t performed very well.
So, he asked me what to do.
The following is my response, and importantly, a framework for you to assess most situations that don’t go as planned.
1. Do you think the poor results could stem from your Strategy?
If the strategy is flawed, the salesperson will not be able to succeed. In this case, strategic questions to ask would include:
- How are you getting leads?
- Who specifically is the salesperson calling on?
- What value proposition are they conveying?
- What format (e.g., verbal vs. print), are they using to communicate with prospects?
2. Do you think the poor results could stem from your Process?
If the process is flawed, the salesperson will not be able to succeed. In this case, questions to ask would include:
- What processes does the salesperson use (e.g., start with lead qualification, then discovery, then proposal, etc.)?
- Do they go through the same process every time?
- Where is the process breaking down?
- What training have they been given?
- What tools are they using (e.g., scripts)?
3. Do you think the poor results could stem from your Leadership?
Leadership refers to how you are motivating the salesperson. In this case, questions to ask would include:
- Are you motivating the salesperson with bonuses or commissions?
- Are you offering them other monetary and/or non-monetary incentives?
- What else could you be doing to motivate and incentivize the salesperson to achieve the success you desire?
4. Do you think the poor results could stem from your Human Resource Management?
You might have done everything above (strategy, process, leadership) well, but if you have the wrong person for the job, he/she won’t succeed. As such, you should ask:
- Is this salesperson the best person for the job?
- Did you adequately screen this candidate?
- Do they have a real track record of success?
The framework above has you look at the 4 aspects of tasks that don’t work as planned: 1) the strategy, 2) the process, 3) your leadership and 4) the people. Importantly, using this framework will guide you towards solving the issue. More work may be required though. In this example, you may have to go on sales calls with the salesperson yourself to see what’s going on. Or you may have to hire a sales trainer or consultant to help figure out the solution.
The good news though, is that fixing this problem can be highly lucrative.
As an entrepreneur, you quickly learn that the first time you try many things, they don’t work nearly as well as you would have hoped. The key is modifying and tweaking your strategies and processes until they do work. And once you’ve done that, you’ve created competitive advantage that you can use to successfully grow your business.
So, leverage and apply this framework to the things that don’t work in your business. And soon they will.
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