Pirjo Tuomi, an experienced Finnish saleswoman who has worked in the U.S. for the past 16 years, presented her experiences and tips for Building and Managing a Successful Sales Team in the U.S. Market at Verso Software Sales Camp last week (see our previous post from the event). Pirjo has long experience from the U.S. B2B sales, positions from Sales Rep to SVP Worldwide Sales, going through 5 M&A‘s and 1 IPO, growing a firm from zero to $250M in revenues and up to 120 team size, among other things. In the following, I will also reflect points from Jussi Harvela‘s presentation also covered in the previous post.
First of all, Pirjo stated the U.S. market is obviously a vast and a hugely competitive one, accounting for third of the world’s 500 largest companies and over 40% of world’s enterprise software sales. Local sales presence and sales support is crucial. For getting the first reference customers, you should look to work very closely with them, developing the product together and building and managing the expectations. Winning the first deal is crucial, and will require special effort and perhaps special arrangements like discounts and on-site engineering support commitment. The entire firm needs to be focused on closing the deal. Titles are sometimes important and thus for example the CEO should participate in the sales process as well as needed. As Jussi also stated, you should aim for the big and known names first — you need to get a reference customer which other firms know by name. The most important thing is to build reputation and enable further sales.
One clear differentiating point in the U.S. business culture, repeated by both Jussi and Pirjo, is the sense of urgency – the U.S. business culture is used to focus solely on particular initiatives and getting them worked out in due course and then moving on to next one. For example in Finland, a lot happens in a “multi-tasking” mode instead, and thus takes more calendar time. In the States, if you don’t follow up the next day (or same day) after your meeting, you may have to start all over in two weeks when you get back with the material you promised to deliver. So, when you are pushing a deal forward, do not let your grip soften – you will need to follow up constantly. Maintaining the momentum is everything. “Do it yesterday!” is the mantra, Pirjo stated. However, this does not mean that you would be able to score deals with major corporations in less than six months, it does take time to go through all the necessary steps.
Another point to consider is the fierce competition. Pirjo emphasized you can be sure the deal is not “in the bag” until the shipment has been made and you have received the payment. Having signed paperwork does not mean the deal could not still go south. The competition intensifies the closer you get to finalizing a deal, and you can be sure if there is an existing provider, they will use all possible means and tricks to just try to keep their business with the customer.
To enter the U.S. market, as an entry requirement the firm should look to reserve minimum $1-2 million investment, Pirjo explained. Establishing the sales and the support organization, a legal entity, starting basic marketing activities and establishing awareness (yes you need to do that), and tailoring the product to the U.S. market will take time. Furthermore, depending on your deal size and the customer organization size, closing the first sales could take anywhere from 6-12 months or more. It will likely take 2-4 years to reach $5+ million in sales, Pirjo argued.
Next week in the second part to this post we will look at specific tips on setting the sales force up for success in the US.