top of page

Real Life Pitfalls Establishing and Evolving the Sales Function of Your Organization

(This post originally appeared on LinkedIn here)

The reasons I love sales are the same as in 1993 when I decided that this was the area for me going forward. Sales has the advantages of having your own company without the disadvantages. In sales when you scored 189% one year, you scored 189% no matter what color your skin has, what religion you have, what family background or education you have, etc. Challenge and day is like the other, one phone call can change everything. Making the customer successful is a very rewarding feeling. And finally, a strong influence on the number on my paycheck made me fall in love with sales. I'm privileged to have worked in fascinating companies and with great individuals, going through the ups and downs of life in sales. 

Disruption Selling is helping customers to get their Go-to-Market motion right, including how to build the Organization of a Disruptor to reach market leadership. As we continue the series about how the Disruptor must build the organization, this post is about pitfalls a Disruptor must avoid when implementing Sales.

Commission plan and quota

As they say: "show me your commission plan and I will tell you how the company works". The baseline for any sales organization must be a commission plan stimulating the right behavior. E.g. with the pureness of the "pay-as-you-go" model and its adoption in cloud technology a Disruptor wants to pay commission for "usage" rather than "signing contracts". Sales people focusing on finding, onboarding & scaling new workloads to stimulate and increase usage will do many different things compared to sales people who are goaled on closing a contract. On the individual level, good quotas strike the balance of being challenging and realistic to achieve. If it is not challenging the company leaves money on the table and if it's impossible to achieve it will frustrate people.

The wrong behavior and culture

People will notice when you tolerate the wrong behavior. As a leader keep in mind that you promote what you tolerate. Even if the person with the wrong behavior delivers rockstar bookings, you must stop the wrong behavior. It will otherwise make its way into the corporate culture. Removing the wrong behavior from your corporate culture takes a lot of time and effort without the guarantee for success. Watch this space even more when you grow sales by 50-100% of sales people every year. When you add that many they will have a significant impact on the culture based on their past professional lives.

Builder and maintainer

I never liked the terms hunting and farming in relation to sales for a number of reasons. The biggest one is that it is almost counter intuitive. I've worked with many sales organizations who would put the most experienced person on a large existing account and the least experienced on prospective target customers. It is counter intuitive because the existing customer is more tolerant, which should help the less experienced person grow without the risk of damaging or totally losing the account. The prospective target customer, after they found the value proposition compelling, will care the most about risk mitigation. An experienced person will be able to provide actionable experience to de-risk the endeavor and raise confidence with key stakeholders. It did help me to look at the territories from the perspective of "building" vs. "maintaining" placing the most appropriate person on it.

"My" customer

Some sales people believe they own a certain customer. They don't. Their CEO is owning the customer and she asked the sales person to take care of it on her behalf. That's very different. Especially in organizations, whose business is growing more than 20% per year, it is clear that splitting territories is an inevitable part of growing so well. Be transparent about it to avoid unnecessary emotions and effort. Similar is true for moving up in the organization. Just because somebody was the first sales manager with 3 reps it doesn't automatically make them the best choice when the company is at >$20M and needs a Chief Revenue Officer.

Product Led Growth (PLG)

A few weeks ago I published a post covering misconceptions about PLG. As an executive don't assume that PLG is magically solving all the Go-to-Market issues on its own and inexpensively. It won't. Doing it well is hard work and even PLG champions like Snowflake or DataDog have quite sizable sales organizations. It also won't solve a lack of product market fit (PMF) or lack of understanding the Ideal Customer Profile (ICP).

Scale too soon

Scaling the Go-to-Market resources was always rather easy before 2022. The era of cheap money and growth at all costs led to a lot of overhiring. With the end of the era of cheap money and the focus on profitable growth it is important to only scale when you are truly ready. The foundation for being ready is a clear understanding of the ICP and a confirmed PMF. Built on top is the sales and marketing plan with supporting KPIs, including the value propositions, as part of a sales play or sales initiative, a territory plan and an account plan template as well as guidance regarding hiring and onboarding. This includes the definitions of roles & responsibilities, leveling guide, interview approach and effective onboarding of the individual. As mentioned above, a good commission and how to set the right quotas is also required before a Disruptor starts to scale.

As always, the devil is in the details. A good setup is paving the way to market leadership and a bad setup is leading to disaster. Don’t approach it with a copy and paste cookie cutter approach but think hard to make the best decisions that are the fuel of you rocket ship.

27 views0 comments


bottom of page