Building And Managing A Successful Sales Team In The U.S. Market, Part II

    US Airways landed (photo by caribb)Last week we covered some basics in getting into the U.S. B2B software market. This article further elaborates the tips from the presentation by Pirjo Tuomi, who has quite a many years of sales experience in the U.S. market. The focus is on building and managing a local sales team for the B2B market.

    #1 Determine Your Sales Approach

    First thing to do is to define your sales approach. Your product, target customer, industry practice, and desired location all affect the strategy you should take. As mentioned last week, you need to carefully think what the division of inside and outside sales efforts needed is, i.e., working from the office by phone/email/web, or  going out meeting prospects in person.

    A key thing, as Pirjo presented, is to first define your ideal target customer. There are so many possible prospects in the U.S. market that it would be very foolish to go after every big firm just based on your gut feeling or because they are close. Important is that you should aim to get a first reference customer that is respected and known by the firms among your other potential target customers. In nailing down the ideal customer profile, some things to consider include: firm size (e.g., “$100-500 million in revenues”), industry, geographical boundaries (it is a huge country, and practically impossible to serve fully from just one location), IT infra the customer uses, customer’s IT staff culture (e.g, are they used to buy outside solutions vs. internal development), company structure (e.g., done multiple acquisitions, conglomerate), cost drivers for the firm (e.g., manual & decentralized processes).

    In your planning, you should pay special attention to the caliber of the sales persons needed. In hi-tech and software sales, you typically should only look for persons with smart and consultative selling style, technical understanding, and minimum 5 years of relevant sales experience. Sales support is often best to be set up cost efficiently centrally, utilizing primarily webinars.

    Typical salesperson compensation in the U.S. is 50 % base salary plus 50% commission when reaching target performance with $1M quota. You will need 3-4 sales and sales support persons, and with other activities expect the required entry investment be $1-2 million at minimum. You have to create a U.S. focused marketing message, and you need prepare to customize the solution to the local customers. Also asses your competitors, create a clear strategy against the strongest ones, and take advantage of the weaker ones.

    #2 Build the Team

    Second, after laying out your plan, the next step is to build the sales team. When finding candidates, Pirjo advised to never ever to hire anyone you do not know personally or through your network. It is not that hard at all to check the references. Additionally, you should also check the refences of possible head hunters you consider using! Most of them do not understand fully the possible issues with cultural differences and requirements you are looking for, Pirjo claimed.

    You should also ask for the candidate’s past pay checks (though often they provide those automatically), as it is common in the U.S., and “past predicts future performance”. And, finally, you get what you pay for – be extra wary about “cheap” choices.

    Pirjo listed several possible and typical issues for foreign companies hiring U.S. salesforce:

    • Hiring compatriots – may or may not work, you really need to know what you are doing
    • Dazzled by the “Yankee talk” – boy, then can talk…make sure you stick to the facts
    • A foreign firm is a potential career sidestep – sales rockstars just won’t join a poorly funded foreign companies with unclear prospects
    • Young and old salespersons might be cheap – but young might be there mainly for the title, and old wanting to “ride to the sunset”
    • Do not be afraid to ask tough questions at interviews

    For the salespeople, it is really crucial to know that the company is going to succeed, and that the product is something they will be able to sell (does it fit the market/the customers, do they understand it — and is it ready). Due to the compensation model, they will need to get the opportunity to make a lot of money to “pay for the mortgage”.

    For background, Pirjo offered some insight into the local salary structure. The setup is quite different from the one we are used to in the Scandinavia so it is important to understand. Typically, the first $60-80K of the annual salary of professionals goes to covering things that are typically covered by the state or city in Finland (like childcare, pension). And the taxes aren’t that low, after all, with max 39.6% federal tax + state income tax 0-12% + real-estate tax 1-1.5% of property value + 0-10% sales tax. The bottom line is, if there is nothing to sell, the product isn’t ready, or your team is not able to sell the product, the salespeople will leave even if they liked the firm as such.

    #3 Manage the Team

    Third, once put together, you need to manage your U.S. sales team properly. And that can be quite tricky if you do not adapt your managing style according to the local flavors. Let’s take a look at the U.S. – Scandinavian sales dictionary Pirjo provided:

    • “fine” = everything’s f***ed up
    • “good” = well…
    • “short delay” = we’ll ask your competition for a quote
    • “customer promised” = no deal is possible
    • “looks positive” = nothing much happening there
    • “excellent” = whatever

    So, if your salespersons use these terms a lot, you know you should be worried, Pirjo instructs… It works both ways, though – if you state in the typical humble Finnish way that “we’re doing ok”, you might successfully get the team alerted to thinking the firm might be going under. Of course, you should also educate them about the company’s cultural origins and its implications.

    Furthermore, in the U.S. sales and business culture, sales managers need be in touch with the sales reps nearly daily. This is not obtrusive – Pirjo commented that in case the sales rep does not hear from the manager for a couple of days, she thinks she has done something to upset the manager. In addition, verbal communication typically prevails, and writing things down and documenting has to be forced, Pirjo claims. Finally, there is an often strict performance management system in place – miss the quota in 2 quarters, and you will be shown the door. This is also good for entrepreneurs and managers to realize: if things are not working, it typically is much better to change them sooner, rather than think that maybe the issues will go away over time, and waste another year and lose money while waiting.

    Finally, as a manager also, keep constant focus on the deals. Competition gets worst in the very last minute. Also qualify not only customers, but news from the sales team as well – remember “going great” means  “there are some opportunities”. Starting and ending the week with team meetings (/calls) going through the deal and pipeline status is highly recommended.

    You can find Pirjo’s slide deck here (pdf).

    Rest of the Verso Software Sales Camp materials, and all previous Verso program materials for that matter, can be found here (some in English, some in Finnish).

    You can find Pirjo’s slide deck here (pdf).
    Rest of the Software Sales Camp materials, and all previous Verso program materials for that matter, can be found here (some in English, some in Finnish):