By Pat Hinds
I spoke with a friend on the phone this week; he is working with a start-up company that has a good product with a solid value proposition. As a result, they are generating cash flow from the sale of the product; nevertheless, they are not meeting the expectations of shareholders and are burning cash at a faster rate than projected. A question that this friend asked is, “What level of sales activity is required from the sales team to improve sales?”
The classic challenge that start-up technology companies face when they get funding is they have not done the work required to translate market opportunity into sales. The company hires a VP of Sales and a sales team and they are expected to drive sales into a target that often resembles a hockey stick. Each rep starts with about 200 contacts and after the first month of working this contact list the productivity begins to fall off.
I have a recomendation for any company that is looking to enter a new market — hire a telemarketing firm prior to hiring a direct sales team. A reputable telemarketing firm is going to have you complete the following list as a test of your market model skills:
1) Provide a target list of accounts and contacts, 250 contacts per 200 hours of calling.
2) Define the firms being targeted by location, vertical, size and why you have targeted these accounts.
3) Describe the offering(s) being showcased in this campaign (in 30 seconds).
4) What makes your product offering unique over your competitors in the target market?
5) What competitors are likely to be installed, and what is the best strategy to use to co-exist or displace in your target market?
6) What outcome, other than productivity, will the customer gain from deploying your offering in the target market?
If you cannot produce the list in a timely manner and answer these questions with ease you are not ready to hire the sales team. Salespeople are not marketing people, market modeling is a marketing initative that needs to be translated into a tool that sales people can use effectively.
Topics: Sales Consulting