What is a sales crusader? Do we need sales reps?
Marketing Through a Sales Crusader
There are many great marketing, sales, advertising, and branding books and courses out there. They all say the same thing, that you need to create a marketing strategy that goes out looking for the customer. Unfortunately, all this literature and great in-class discussion accomplishes little for the emerging venture.
Because the strategy, the execution, and the venture’s potential upside should be keyed on only one element: the founder. Put more succinctly, Steve Wozniak, co-founder of Apple Computer, discovered that he didn’t have to understand a market of several million, since nobody had a computer. All he had to understand was himself.
Second only to raising the money for the venture, the founder’s job is building momentum on the top line revenues. Like we learned from Finis Conner, the job entails working 24/7 day-to-day, traveling tens of thousands of miles each year, figuring out new ideas, being exposed to new experiences, and then discussing them with the venture team, the board of directors, and the venture’s advisors.
In the early-stage days, building top line revenues becomes a nonstop adventure for the CEO; no other marketing plan should be considered. In essence, sales begin with a sales force of one. It is up to the CEO to get on the road and to flush out discrepancies in the business and revenue models. No amount of marketing planning experts back at the desk can possibly conceive what the CEO will discover on the road talking to prospects, at trade shows, reading trade literature waiting on planes, and dealing with the industry on a daily basis. It is the CEO who needs to go out in the field, press flesh, and be the one person responsible for driving like hell to get the numbers up. This task cannot be assigned, cannot be outsourced, and cannot be buried deep in elaborate marketing plans.
Do Not Outsource Your Sales
Many individuals who start businesses without prior experience or training in sales do not know the basics in sales techniques and have fundamental misconceptions about the mindset required for getting orders. Having a CEO who is effective in face-to-face selling is critical for an emerging venture’s survivability. Gone are the days of Super Bowl commercials, elaborate Las Vegas “launch parties” with The Who rock group, and trade show rollouts with stretch limousines for the media. Entrepreneurs leading new ventures now have to rely on their CEO leading an internal sales force. They have to secure orders by calling on prospects and customers themselves. It is nothing new, and as we learned with Finis Conner, it is a common practice with the most successful entrepreneurs.
In his book, The Origin and Evolution of New Businesses, Amar Bhide, a professor at Harvard Business School, reports that only 12 percent of the most successful entrepreneurs used sales intermediaries. The other 88 percent of ventures sold directly, and all but a handful were principally responsible for making the sale. In other words, the founders themselves were experts in the hand-to-hand combat of selling. Bhide found that 82 percent of the founders were the main salesperson, and 10 percent were heavily involved.
Conclusion: Unlike large corporations that usually rely on specialized sales forces, new business ventures cannot outsource others to do the selling that is required in early stage ventures.
As for the entrepreneurial engineer, or the founder who has trouble with the hand-to-hand combat of selling, it will be tough to recruit the first marketing executives to lead the sales at emerging ventures. Vinod Khosla recalls when he was a twenty-six-year-old co-founder of Sun Microsystems spending more than one year and placing hundreds of calls trying to recruit an experienced marketing executive. He discovered that nobody wanted to leave established companies to join someplace where they wouldn’t even see any salary for six months.
In the very early turbulent days of early stage ventures, conflicts of interests will appear, most apparent when trying to figure out the pricing and market entry strategies. Pricing for the new venture and the new product becomes more of an art than science. This draws a line of conflict with the sales force, as sales force compensation packages are often driven by commissions. So naturally the sales force team will want the product to be priced high, which goes against two of the marketing objectives we discuss above. We recommend that initially the sales executives, if other than the CEO, should be rewarded for meeting objectives, such as delivering a proven product on time, and recruiting referenceable or marquee customers. Then as sales begin to ramp up, the overall compensation strategy can eventually evolve to a more traditional commission-based model.
Some influential business thinkers, most notably Amar Bhide, suggest other reasons why outsourcing sales is not an option for entrepreneurs. Maybe the process of making a sale requires making on-the-spot strategic choices, which the venture team cannot easily entrust and outsource to nonfounders. Besides, being in the trenches exposes the venture team to excellent feedback and intelligence from the front lines. Some other reasons include that hired-help employees may not have the same “zeal and passion,” and that the outsourced field agents cannot provide marquee customers with the psychic benefits of dealing with a founder.
It might be impossible to attract a really competent sales agent until the venture has established a track record in the marketplace. Good salespeople often tend to seek out “hot” items to push that can quickly generate high commissions. Few nonfounders have an interest in the arduous task of selling and educating customers about new, innovative products and services. Finally, with the average cost of a sales call of around $350 in 2003, it is very expensive to operate with outside sales agents.
Marketing Starts with a Crusader
In his book Marketing High Technology: An Insider’s View, William H. Davidow presents the case for marketing through crusaders. Davidow is a general partner with Mohr Davidow Ventures in Menlo Park, California. Before forming this venture capital firm, he was senior vice president of sales and marketing for Intel Corporation and helped lead the renowned Intel 8080 and 8086 processors to their rightful success. According to Davidow: “The most important ingredients of great high-tech marketing aren’t taught in business schools. Most marketing people don’t even like to handle them. They require personal commitment to the product’s success that is consistent with the company’s philosophy, a dogged pursuit of customers, and an untiring commitment to service. Those are the soul of the product.”
We believe that an “evangelist” is one who simply preaches and conducts lots of missionary work. Today, new business ventures do not have the luxury of time and resources of evangelism. A crusader is one who undertakes military expeditions, focuses on one front at a time, and fights for a very specific task. Davidow adds that “crusaders” are not managers.
Business schools have programs to help people become “product managers” and “product champions,” but with a new product, there is nothing to manage and there is no such thing as a champion without a hard-fought battle.
The crusaders are like Jerry Sanders, founder, chairman, and CEO of Advance Micro Devices, “who can lead in the tough times, who can fight the odds and win.” The crusaders, as Davidow stresses, “were willing to lay their lives on the line,” something that is surely not taught in business schools!