Founder in Eleven

Sales is the lifeblood of any professional services company because of its huge impact on career, customer service, and financial growth.  Given the critical nature of sales, it is typically something most professional services firm founders struggle with over time.  Even more difficult, IT services firm founders typically come from technical backgrounds and may have found their first client through personal or business relationships, where the client was aware of the founder’s skill and reputation.  As a company grows, it must increase its number of clients. Founders, often uncomfortable with the sales role, can struggle with making use of or adding additional sales resources or responsibilities.  Within my IT board/peer group, we would constantly discuss the “I just need to hire a better salesperson” issue.

This post will look specifically at sales within IT professional services firms to try and address this common issue facing executives/founders, and finish with some thoughts on how TSG tackled this issue within our own sales needs.

IT People and IT Sales

IT services founders struggle with sales for a variety of reasons:

• No training – Whether working at a large consulting firm, software firm, or other place within IT, sales isn’t something that is typically taught and practiced by founders or IT professionals.  I always like to admit that, despite 9 years at Andersen Consulting/Accenture, I never received any sales training.    
• Poor sales perception – Whether software or services, sales does not have a great reputation within the industry, especially IT sales.  There are many stories about pushy sales reps that over-promise only to under-deliver.  “Coin Operated” sales professionals are too often rewarded for poor short-term behavior, The “push” for closing a deal can be very uncomfortable, leaving the client or vender with a negative impression of an IT services firm that can last long after the sales representatives leave the company.
• Lack of relationship and communication skills – Sales involves a level of relationship skills that can be difficult for senior IT resources, particularly when it comes to establishing new clients.
• Fear of rejection – Surviving the ups and downs of sales comes with both the satisfaction of “winning” a new client and the disappointment of “losing” a client.  Successful salesmen have the thick skin it takes to accept rejection after putting in a considerable amount of time and effort.

Given all of the above, founders and executives may turn to the easy way out of hiring a salesperson to take charge of the responsibility for sales.  Hiring the right person is difficult because many salespeople:

• Lack product knowledge – As most IT services firms are founded with a specific key capability, it is often difficult for generic salespeople to market that capability without support from the company’s knowledgeable resources.  Founders expecting to simply delegate their salespeople are often frustrated that they are included in every sales call for their technical background.
• Demand substantial compensation – As sales is a key function for any company, good salespeople expect (and get) good compensation.  While founders might expect sales to be commission-based, great salespeople often have a strong base pay as well.  Founders can struggle with justifying the typical high compensation that could come from a new and unproven sales resource when it comes to selling the company’s services. 
• Put on a sales persona – Given a background in sales, good salespeople use their skills to “sell” themselves to founders, making it difficult for founders or leaders to be able to objectively evaluate different salespeople and hire the best one.
• Change jobs frequently– Given the important role they play in a company, good sales representatives will always be in demand and are difficult to retain, particularly since good sales representatives will have very good networks.  Those networks will often reach out to good sales representatives with above market compensation as well as options and other incentives.

Sales – Building a Sales Culture

Early on, TSG struggled with sales goals like any other company.  During that struggle, we brought in Mike Petruska, a consultant from “The Alternative Board” to review sales roles and responsibilities with the intent of better understanding them.  Mike’s best quote at the time:

“You can hire five sales reps. One will perform well right away, one will perform terribly right away, and the other three you won’t be able to tell how they will perform for months.”

Mike’s overall advice was that we could not afford to hire five sales representatives to find the one good one.  Mike suggested that we should look to build our own sales capabilities from within the organization. He suggested the senior managers take lead roles and the junior managers focus on the upsell of existing clients alongside their management of the already existing client relationships.

Developing an “Everybody Is in Sales” Mindset

With some help from Mike Petruska, TSG moved to embrace an “everyone is in sales” mindset.  Some key implementations:

• For existing clients – Typically, whether it was TSG or other firms in our business network, the 80/20 rule applied; 80% of the firm’s revenue should come from existing clients, 20% from new clients.  Everyone in the company should be focused on performing quality work for the existing clients, with the intent to sell them the next project.  That is, the resource working for a client is best at selling more work to that same client.  I worked with my senior managers to mentor and train our junior managers in embracing the client relationship and identifying areas or opportunities where we could sell additional services.  The team would get involved with their clients when appropriate and frame the sale as a continuation of the client-company relationship so as not to appear too “salesy.”
• For new clients – Myself and senior managers would tackle the bulk of the new client pursuit drill.  Whether through partnerships, inbound marketing, or other networks, senior managers would initiate contact and pursue the opportunity with support from junior staff and other senior managers. This prevented us from needing to hire a pricy salesperson that lacked the needed knowledge about our IT company and services.
• For building a “salesforce” – We began looking for opportunities, particularly with upselling existing clients, to train our existing employees in embracing that some of their role does include sales, but not through “cold calling.”  We would include junior resources in sales calls as support so that they can learn by seeing and doing. 
• For selling as a founder – Having founded TSG, I had a unique perspective and passion for our firm and the clients’ business.  I was able to train and develop our senior managers to have that same passion.  While selling can be difficult and uncomfortable, I found myself and the senior managers to be the best resources in expressing our passion and commitment to the clients’ organization and solving the clients’ problems.  In competitive situations, we would rarely lose out on an opportunity when our competition sent a sales representative and we sent myself and senior managers, both of whom  would actually be involved with the work.

Rather than always being on the lookout to hire more/better salespeople, founders can embrace their own sales roles and look to develop an “everyone is in sales” culture.