So you need sales people you say.. feet on the street knocking on doors and finding customers. You want to compensation that effort based on results (commission only), after all your product is ready and proven, you are telling them where to look, and you provide sales support. What's wrong with this picture?
Before diving in on what's wrong with this expectation, based on the stage of business' evolution, let's provide a bit of framing. As a business development consultant I find that when early stage companies think they want sales people what they are really seeking is revenue, which of course comes from product and service sales. Upon a bit of investigation into the target market and company history it becomes immediately obvious that we're talking about a new offering to the market or extending the existing offering into a new market segment -- in both cases we have a 'business development' need, NOT a 'sales people' need.
Let me explain: Traditional "selling" IS about people and their skills. They sell on points of differentiation into a market that knows what the product does for them. Usually that means selling into the middle of an organization on points of productivity and competing for existing budget. Business development is about market place needs--the value proposition--and identifying points of entry or those functions that will respond to the value prop which usually means the top of an organization, and likely on points of strategic objectives.
These are two completely different methods for increasing revenue. Sales people will differentiate on features yet they also seek the close with exuberance. They will knock of door after door and will chase any and all prospect interest, but will never look at how their offering fits with the breadth buyer needs. Biz Dev people will discover what the market place needs based on current dynamics and match your offering accordingly. This may inform the market approach vector to be channel partnerships or association leverage points to penetrate a market. The goal remains -quickest path to revenue- which is some combination of biz dev and sales, but usually not one alone.
What is most telling in understanding your best approach is to look at the stage of company evolution versus the market place dynamics. Product or service is mature enough to sell today-check; target market is identified-check; target market has reference clients-?; target market is an emerging market place.. or is a new target market-?. It is absolutely critical to understand where you are if you want to to achieve your revenue objective anywhere near the internally set expectation. Curiosity for your offer IS NOT commitment! If you product/service offer is new then your targets don't yet fully understand what is does for them and they won't adopt. This means a long process in realizing the value prop, getting the decision makers on board, and finding budget. Which means you MUST FIND EARLY ADOPTERS so you have pilots and references for those still trying to make a decision. If you are pursuing a new market with existing offer then you have reference clients, yet you don't actually understand the appropriate value prop, decision process, and approach vector. You still need to find early adopters which comes down to tracking them by navigating a myriad of conversation in this new ecosystems.
Why sales people are the wrong activity: Because most start-ups begin with product we have an engineering mindset which puts all modes of selling in the same bucket. This perception leads to things like 100% commission, technical differentiation, and territory alignment-which sets us silos-but leaves a gapping hole in proof of application in this new market. It also negates the fact that to penetrate a new market quickly, requires tightly coupled cross pollination of all internal intellect as your team discovers how to win in the new market place. From value proposition to target client objectives to how your offer fits in their work flow to where it falls in the priority list to how buy decisions are made to what does an average sales cycle look like.. should be mapped out by the whole team.
Create the right incentive structure: Ensure that you incent your team to work together to discover how to win. This value--determining how to penetrate a new market--is not worth zero!! In fact, its some of the most important knowledge your company will acquire.. so set up the team to work together and figure it out. If you can't pay base salary until commission can take over, then offer equity or compensation in arrears. Double pay commissions and don't set up silos. And above all else, make sure you have a business development person leading the charge, not a sales manger simply setting up processes.
