Filling the sales pipeline
As CEO, you bear total responsibility for your company hitting its figures, and in a scaleup the most important one is top line sales growth. Does that make you the de-facto head of sales? Well, no.
Your board may disagree with me. They may be telling you to act like the head of sales, particularly if you start missing targets. The problem is, they may also be telling you to act like the head of marketing, the head of PR, the head of distribution, the head of business development and the head of everything else to do with generating revenue. Trust me, you will work your fingers to the bone and still not do all those jobs as well as the board thinks they could.
You need to change your frame of reference. Think of yourself as the head of filling the sales pipeline. Everything else is ignored or delegated.
Take PR. As CEO and founder, you are best person to tell the company story, you are the person journalists want to talk to, and it’s fun being the centre of attention: you are Christopher Columbus, leading your team on an heroic voyage of discovery! You get in the papers and can say “Look mum! I’m finally using that expensive education you paid for!” But PR can take on a life of its own. How do you know when enough is enough?
Stop calling it PR, and start thinking of it as one of the tools you use to fill the company’s sales pipeline. If your PR is not creating identifiable new sales opportunities, on which your team can follow up, you’re wasting your time. Similarly, if your company has enough sales leads and is having trouble converting them, stop with the PR and figure out the bottleneck. There, I’ve just saved you weeks of your time and several exhausting trips a year.
What about marketing? Your main job is to make sure you don’t fall into one of two common traps into which your marketing team will try to lure you.
The first is wasting time and resources on generic market positioning. Your expensive CMO may believe that brand awareness is necessary and sufficient to ensure the success of your company, the fact is, it is neither. New brands speak more authentically through great products and services than through expensively-choreographed ad campaigns or slick launches. I recently spent a long and very dull evening being told by the CEO of an energy blockchain company all about his launch — which appeared to involve rafting down a river with some celebrities, getting drunk and possibly taking drugs. At the end of the evening I was left with the distinct impression that if his product existed, it probably didn’t solve any important problems.
The second trap into which your wonderful marketing team will try to lure you is to let them take over individual client relationships. But here’s a rule-of-thumb for when marketing has to stop and sales has to begin: marketing is about one-to-many communication. As soon as you’re communicating one-to-one with a client, that’s sales, and it has to be done by sales people. The reason is that marketing people want your products and services to be loved. Sales people want them to be bought.
Once your marketing team is not wasting its time and your money on generic market positioning or trying to close sales, get them entirely focused on filling the sales pipeline. Judge them purely and simply on results. Force them to track the effectiveness of every hour and every dollar they spend, in terms of generating leads that your sales team profitably converts. Oh, and if they find filling the company’s sales pipeline to be unglamorous work, beneath them, that’s no problem at all: fire them and hire some cheaper professionals who really understand how to contribute to the success of the company.
So PR and marketing fill the pipeline, while sales owns the client and closes the deals. Got it?
If sales are so important to your company, shouldn’t you at least be leading the sales team yourself? Nope: just like with delivery, you’ll never meaningfully scale your business if your sales team can’t close deals without you micro-managing them.
When I launched New Energy Finance, the point at which I knew we had a big success on our hands was when one of our former interns started closing sales (more sales, indeed, than our soon-to-be-fired Commercial Director, but that’s another story). That’s is when I knew we had a scalable business model, and started piling on sales people.
Sales is a professional skill — a complex one, and not one to be underestimated — but one for which there is a market. Hire more sales people than you need, and get rid of the ones that haven’t started closing sales after six months. Managing sales people is also a professional skill — if you don’t have confidence in your sales director, get a new one, don’t step in to compensate for his or her weakness.
That’s not to say you can’t close the company’s first few sales yourself — in fact you probably have to. You might even need to make the first few sales for each new product, or to help land a few huge new clients or distribution deals each year.
It’s OK for you to be in the door-opening business — helping to fill the sales pipeline — but you can’t be in the deal-closing business: there are simply not enough hours in the day.