30 May Is your CEO the Top Sales Rep in your Company?
There is a time bomb ticking when SMB companies are anchored by a sales force with a CEO that wins the president’s cup every quarter. It’s a common theme among companies stuck in a certain stage of growth, especially when there is a strong desire to gain critical mass. This inherent dilemma occurs when the CEO is the top sales generator in an organization. No question, it’s usually critical for CEOs to be engaged in the sales process in smaller organizations; however, there is usually a growth cap associated with these companies.
Why This Happens
Nobody knows a business like a CEO does, and nobody can sell it with the passion that a CEO can. It’s a very common practice; one that will remain in existence for the foreseeable future. We see this in many of our clients and prospects. There almost always seems to be a desire to get out of this mode, but it is an extremely difficult pattern to stop. Here are the main reasons why the CEO faces this difficult task of breaking free.
- The CEO sets a very high standard of expectation. Because the CEO is leading the charge, the expectation for others to succeed is very high. New sales reps are expected to sell just as effectively as the CEO and are under a microscope to deliver. Very few can meet this expectation.
- SMB companies rarely employ inbound marketing practices to help with lead gen. The CEO is highly successful in working personal contacts and networks, and rarely needs to cold call for new business. In most cases, the CEO is a practitioner of the trade and has contacts in the business. Inbound marketing is usually an afterthought.
- Premature hires in sales rarely work. Most CEO’s that have never built a sales team don’t realize the skills and personality necessary for success. It’s an easy out to bring on friends or family to do the job. Unfortunately, this is usually the wrong solution.
- Financial positioning makes it nearly impossible. Having never invested in a sales force before, the urge to spend the money or set aside a budget is difficult to fathom. In fact, if the CEO is selling successfully, the company is usually in a place where any new sales expenditures would need to come out of the CEO’s compensation.
- Sales training and knowledge transfer is difficult. The CEO is busy selling and running a company, with little time to train someone to come up to speed. All of the elements included in a sale: value proposition, needs analysis, positioning, and closing are in the head of the CEO. Good luck getting that out of the vault.
- New reps are charged with new business. The average CEO is very reluctant to let new reps manage accounts that have been staples of the business since its inception. Instead, most new reps are charged with cold calling and generating new net revenue to prove themselves first. New business development is an uphill battle. If lead gen is scarce and knowledge transfer is light, then new sales personnel will rarely succeed.
Building the Transition
There are ways to alter the tide and shift new sales to people other than the CEO. If your business growth and strategy is dependent on scaling sales and revenue beyond your CEO’s tasks, then there are a few things that can help you get there. Here are some of the strategies we’ve employed with our clients that start chipping away at the sales balance.
- Hire a few junior reps to plant seeds in your market. Using inside sales teams or junior (less costly) reps to help feed the CEO’s funnel will help train a junior team that could ultimately branch off on its own.
- Hire slow, fire fast. It is imperative that the right people get hired and positioned to succeed. Take the time to hire the right people. Read our article on hiring sales reps on following this strategy.
- Build a lead generation and inbound marketing engine that feeds the team. The best thing that could help dilute the dependencies on sales from the CEO is to open up the flood gates on the channels used to generate new leads. If leads are pouring in, the opportunities can be managed by others instead of completely relying on the CEO for new business.
- Get a CRM in place and set standards for usage. This is a huge key to success. Few CEO’s take the time to document and utilize a CRM for business development and marketing automation. By stepping up the usage and creating department standards, sales and lead history can be a great transition tool for new sales personnel. Without it, a team needs to start from scratch, which leads to a period of idleness until something is in place.
- Document processes, goals, and expectations. In line with a CRM system, quotas, sales processes and expectations are all required to build the foundation of the sales organization that will take over when the CEO steps down as top sales rep.
It’s rare that companies can break through the size barriers by only relying on the CEO to drive top line results. The path for growth must pass through a team that will continue to build prospecting territories and new sales outside of the CEO’s contacts and accounts.
If you are one of these CEOs and need to get a jump start on dividing and conquering, shoot us a message and we’ll tell you what tactics we have seen work for companies like yours.
Kevin O’Brien is a Co-Founder and Partner at echogravity. Kevin’s credentials include being a top recruiter for a international Big 8 consulting firm, top business development rep for a global consulting and staffing firm, and consulting with over 100 companies across North America.