It’s no secret that most entrepreneurs have technical training. I’ve worked with engineers and contractors most of my career, writing that they always have a vision for the future.
Unfortunately, these visions often have a significant blind spot: a deep respect for professional salespeople, but only the people they need to develop their business beyond the startup phase.
The problem is that most engineers believe the old adage, “If you build a better mousetrap, the world will find its way to your door.” All a seller has to do is accept orders and only if there is no way to buy the product directly on the Internet.
In addition, engineers believe that the product they manufacture is not just a “better mousetrap” but “the best mousetrap,” meaning that a seller must sell this product, which seems like a personal insult.
Engineers also tend to judge human technical expertise. For them, sellers are automatically lightweight, because if they were technically competent, they would be engineers and not sellers, right?
After all, many engineers are in a geek-pop culture that still uses the tired cliché of the cheater who speaks quickly to represent the salespeople. As a young engineer I knew that “sellers are slimy”.
This once cornered posture leads to the following three inefficient business strategies:
Ineffective strategy # 1: accurate positioning of the product
The belief that real products should be available on the Internet (and without a supplier) often encourages companies to develop products that are easy to imitate and therefore prone to price wars.
The price war kills profits. The only way to keep high profits on a commodity market is to spend (or spend) millions or even billions of dollars on branding and marketing, not to mention ongoing development.
Even if a company has deep pockets, this approach does not always work. For every commodity that can get a higher price (like the Apple iPhone), there are a dozen heavily marketed products that do not reduce it.
If a business does not have much money, the only hope of succeeding in a product available on the Internet is to become viral, in line with the business plan “Step 1: Win the Lottery”.
For small businesses and startups, profit usually comes from business purchases, usually with some adjustments. However, such purchases generally require a vendor to run a project in the maze of business decisions.
Ineffective Strategy # 2: Weak recruiting practices
Even if businesspeople bypass the business model trap, if they generally reject salespeople, they probably will not pay much attention to hiring them.
Instead of taking the time to recruit and recruit salespeople with business acumen, psychological maturity, political instinct, and industry knowledge, entrepreneurs with a technical background tend to adopt two types:
Sellers who match the stereotype of Con Artist.
Potential sellers who can act as “subcontractors”.
In both cases, the results are disappointing.
The “I can sell someone” Fast Talk tends to make customers angry instead of winning them. In fact, a big part of the current sales is overcoming the stereotype and not confirming it.
When it comes to entrepreneurs, they just do not have the skills to make big sales.
Ineffective Strategy # 3: Inappropriate Compensation Plans
Because engineers do not respect sales people and do not understand the sales process, they find it stupid that a top salesman earns significantly more money than a technical project manager.
This negative attitude leads to two strategic mistakes:
Give commissions. Over the years, I have received dozens of complaints from sellers – mostly small tech companies – who have been promised large orders but were “taken out of the bank” shortly before closure.
Define the sales staff for the salary. As an engineer recently posted on a blog, salespeople need to be “like any other professional, be it in your marketing, HR, or finance departments.” (Note the absence in the “Engineering” list!)
Not being able to pay the promised commission is a strategic mistake because it keeps your most talented salespeople away, provided you had a chance to engage one.
A strategic mistake is paying sellers because the only sellers willing to work for a salary are the ones who can not sell well.
As someone who has built software (Honeywell) and sold it to a large company (Lockheed), I can say with some authority that selling a product at the enterprise level is much more difficult than developing the sale.
The reason why top sellers prefer to work for commissions is because they know that what they are doing is both difficult and necessary. Because when sales fail, companies die. Therefore, sellers expect to get paid well when they achieve results.
What entrepreneurs should do
The three inefficient strategies described above lead to predictable outcomes: the inability of a start-up or a small business to move to a larger volume of sales.
It is therefore in the interest of entrepreneurs to: 1) rethink the beliefs on which these strategies are based and 2) change the strategies themselves in order to position the company for growth.
Of these two actions, the first – rethinking convictions – is by far the most important, because strategies emerge from beliefs.
Step 1: Rethink your perception of the value of the seller
Entrepreneurs who continue to believe in the “best mousetrap” theory will inevitably develop strategies that devalue supplier contributions. Similarly, entrepreneurs who continue to perceive sellers as “slimy” will inevitably make bad hiring decisions.
There are two ways to change beliefs: 1) Reframing, which puts your current observations into another context, and 2) Reality Checking, which is about looking at a situation without prejudice.
In this case, reframing is a seller who is an entrepreneur rather than an employee. Entrepreneurs today run the risk of failure by promising in return that they will receive greater rewards in the future.
That is exactly what sellers do when they are paid on a commission basis. You take the risk of failure. If they get no results, they get nothing (or a minimum). When you get results, you should make a lot of money.
In this case, the “reality check” is for business owners who consider their own experience buying sellers. Almost everyone in the business had a positive buying experience from a seller who “just did not seem to be a seller”.
For a diligent entrepreneur, the kind of seller who simplifies life and “looks after things” is gold. If that happens, do not worry if the person you sell is on commission or not. They are just thankful to be well served.
It goes without saying that it is the sellers that entrepreneurs should hire to sell and pay for their own products.
Step 2: adopt better strategies to attract and motivate sellers
Based on these new beliefs, now is the time to apply strategies that support the growth of the business:
Focus on niche businesses. A small business will prosper if it avoids commodity markets, where the financial resources of large companies give these companies a competitive advantage. Instead, entrepreneurs need to look for markets where providers and the services they provide make it difficult for large companies to compete with “cookie cutters.”
Check your hiring practices. Hiring a bestseller requires research as well as creative attitude tactics. Ideally, you should spend a lot of time and effort hiring and hiring staff rather than hiring and hiring staff. I discuss, as in my previous post, “How can I make better sellers”.
Put (and pay) a good compensation. Reward sellers who consistently achieve great results through high commissions and benefits. There is a reason why sales commissions are as old as self-sales. they work