Should a Startup CEO get involved in Sales?
If You cannot sell your product, No one else will
The journey of Entrepreneurship almost always begins with an idea to drive innovation. The idea then translates into an impeccable product/service and further into a great Business Model and Bam! Long story short, your business is up and running and you’re now a business owner.
What’s next?
Hiring a team of sales and marketing guys to up your game?
Thats where most Founders and CEOs go wrong. According to Statistics, 14% of Startups fail due to poor marketing (CB Insights, 2019).
CEOs play an active role in propelling performance and maximising value across several departments and most often tend to neglect sales.
According to a research published in Harvard Business Review, CEOs that put sales at the heart of their agenda, captured remarkable growth and surpassed their peers by 50–80% in terms of both, revenue and profitability.
Some of the world’s finest and successful CEOs started out as salesmen and are currently running billion-dollar businesses. For example, Warren Buffett (CEO of Berkshire Hathaway), Howard Schultz (CEO of Starbucks), William C. Weldon (Former CEO of Johnson & Johnson) and Nick Woodman (CEO of GoPro).
A little look into their History:
· William C. Weldon’s joined Johnson & Johnson as a Sales Representative in 1971 and worked his way up to the CEO position in 2002.
· Howard Schultz worked as a Salesman for Xerox Corporation and Hammarplast prior to joining Starbucks as Director of Marketing.
· Warren Buffett, the fourth wealthiest person in the world 2019, began his journey selling coca cola bottles, chewing gums and Washington Post newspapers door-to-door.
·Nick Woodman used to sell necklaces before GoPro
In the initial days of Startup, most Entrepreneurs almost automatically assume that it’s the product that requires their immediate and continuous attention. Arguably yes, the product is the star of the show. However, the show is impossible to go on its own without the director tugging at its events.
Product development is an ongoing process in early startup days. Products/Services are continually restructured, redesigned and reconfigured based on market demand and consumer needs. The best person to talk about the product in its initial days, is the CEO, who knows its product in and out.
In today’s world we all look for assurance and commitment and that Sales Guys are capable of selling anything by promising wonders of the world.
CEOs are viewed as trustable and credible contacts. They have the ability to convince prospects, by making them believe that the product has undergone years of work and has the ability to solve the pain points of customers.
Its tried and tested that when a CEO answers a prospect call or networks directly with a prospect partner, the prospect converts into sales or partners with the business. Since, its easier to trust the word of the CEO over the word of a Sales Executive who is definitely seeking a commission behind all the sales talk.
Also, when a CEO interacts directly or sends out emails, clients are assured that the CEO will personally be available to answer any queries or questions.
How can people with sales skills excel at CEO position and not vice versa?
The Answer is, because CEOs make few attempts, experience rejections and give up!
Whereas, these rejections can be used to trial alternative strategies which can take us closer to successful attempts.
People with sales experience are familiar with rejections and know to leverage them.
When sales professionals step into the market, they continually adapt their approach. When they speak to potential customers, they count every interaction as a success. They make attempts to find what they look for in a product, what problems they currently face and what can be done to solve the problems. This helps them understand how to convince them better.
CEOs often get stuck with rejections and don’t leverage the opportunity that comes along with every interaction and sales attempt.
But what if you are a CEO from a tech background? Or Someone with no experience in Sales?
There is no Perfect Salesman and the cons of hiring a Sales Team right at the start of your Startup journey have its consequences. Such as, a different customer base than the one you defined.
Sometimes, sales reps are likely to sell your products/service to the easiest people they can find in their circle. They can even show you a good conversion rate and trick you into believing you are making progress.
But when the numbers go down, you are likely to notice that it’s now time to take things in your control.
As a CEO, its important to approach potential customers and clients, make attempts and establish long-term conversions.
Successful StartUp CEOs experience trial and error and get better at sales. And, after successful conversions, they get acquainted with knowledge on how to find the sales processes that work.
When its time to get the Sales reps in, there is a proper sales process in action with defined target customers, sales stages, value proposition and KPIs, to train them with.
A CEO that has undergone the initial Sales experience can present himself better to his investors since he now has a definite idea on the specific customer base to target and a specific profile of salespeople required to target big clients.
But this only works best during early startup days.
If your company has moved from Startup to a Scalable Enterprise
It’s important to note that if a company has
· gained success with its business model and products
· surpassed the early development stages
· is expanding its operations
It’s the right time to bring in the sales & marketing guys and serve them with what works best so they can grow the customer base.
Sales becomes an added responsibility for the CEO and not the main point of focus. At this point CEOs can overlook the process by:
1. Providing automated tools and dedicated back-office units
2. Demanding Analytics
3. Considering sales when making decisions on product strategy.
Analytics are useful to understand if current sales campaigns are effective, review performance and to find where opportunities lie. Also, when a CEO ensures that tools for automation are developed and provided to the sales department, it gets easier to analyse data on trends in demographics and technology.
Moreover, dedicating a back office to sales department ensures good response speed and loyalty. As a result, there is an established system in place for generating revenue.
