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How to Develop & Maintain a Winning Sales Culture

by Tony Palladino

Senior Sales Leaders love to talk about the topic of establishing and maintaining a winning sales culture. As a senior sales leader, myself, I enjoy the topic so much that I decided to write about it. So, from my POV….

To me, it starts with the Team. Hiring and developing the sales team to deliver a high-performance day in and day out is the path to a winning sales culture. Hiring “A” players up-front is the fastest path to having a winning sales culture. In fact, without “A” players there cannot be a winning sales culture. For certain, it is a much lower risk in hiring an “A” player with relevant industry experience; they know what it takes to deliver results. Unfortunately, hiring a team loaded with “A” players is hard to do. So, how do we get there?

For this discussion, let’s presume that all sales pros are “B” players until they prove that they are, in fact, “A” players by demonstrating consistent high-performance over time. While sales pros are generally very competitive by nature, “A” players possess other key ingredients, such as integrity and a strong desire to win. They tend to be strong leaders, drivers, team players, with a positive attitude and much more. They possess excellent leadership skills in their interaction with team members and customers. These traits are obvious. What is not so obvious is that “A” players possess a healthy balance of positive traits derived from three general types of sellers:  Technical, Relationship and Analytical Business sellers. The right mix of these attributes is what transforms a “B” player into an “A” player, especially in the enterprise technology sales arena.

If all sales pros are “B” players until they prove themselves otherwise, then sales leaders should focus their attention on developing the sales team through coaching and training, with the goal being to have their sellers grow into becoming “A” players as quickly as possible. Developing a systematic approach to coaching and training is a smart way to enable the shift to a winning sales culture.

Like all people, sales pros have their various strengths and areas for improvement. Sellers’ strengths vary – some are more technology focused, some are considered to be relationship managers, and others leverage their business acumen. Let’s take a look at all three types….

Technology Sellers

Tech sellers lean on their knowledge of technology, the product features and capabilities – things like performance, scalability, reliability, availability, and other abilities. Tech sellers tend to be most comfortable when selling to techy customers, typically found within IT and Engineering. Pure tech sellers are typically viewed as a “vendor” by their customer, unless there is joint ownership in the Intellectual Property.

Relationship Sellers

The “Relationship Manager” tends to focus on listening to their customer, understanding their pain and needs. They tend to rely on their surrounding support team for technical issues. The relationship seller dials into the specific nuances that matter to their customer. In doing so, they demonstrate empathy and earn their customer’s trust. They tend to be viewed as a “vendor partner” by their customers, a grade higher than being viewed as a vendor.

Business Sellers

Business sellers do the necessary research to understand the customer’s business model, identify their funded initiatives, along with the associated KPI metrics that matter to those initiatives. They usually have relevant industry knowledge and experience, which affords them a higher degree of confidence in discussing the business issues. These intangibles should not be undervalued, as they enable the seller to be viewed as a partner and “trusted advisor” by their customer, the highest level of partnership.

While all three types of sales pros can be successful in achieving their sales objectives, I believe none can reach their full potential as an “A” player without incorporating the other two style components. A healthy mix of all three – Tech, Relationship and Business – is what true “A” players are made of. They have an exceptional ability to demonstrate the positive characteristics of all three types. The challenge is to train and coach your sales team to level-up and grow into becoming “A” players – as quickly as possible to deliver stellar results.

The Bottom Line

“A” players work the sales process to their advantage to enable the sale to close as soon as possible. They assess their customer interaction to recognize their customer’s desired level of detail for a meaningful discussion. Then they articulate the relevant info about their product at the appropriate level of detail. The “A” player leans on proven applied use-cases, along with a compelling financial justification that can be realized by the customer. The A-player leverages their best Business Analyst traits to illustrate how their products/services “move the needle” against the customer’s key business metrics. This is translated to a numerical business value, often represented by a Net Present Value (NPV) calculation that trickles all the way down to Earnings Per Share (EPS), the bottom line for a public company.

I find that most solution providers tend to focus their sales training on their technology first, along with their features and performance, scalability and reliability benefits. This is natural and necessary, and it serves as a good foundation. As they evolve, these companies train their sales teams on the specific use-cases that have been successfully deployed. These use cases can become published customer case-studies that are showcased at their external user group conferences and internal sales kick-off meetings. Their sales pitch is usually focused on performance data and the sales team often pushes for a demo. Then, hopefully a pilot or POC to demonstrate the value of their product in the customer’s environment. Unfortunately, technology sales pitches are typically accompanied by a weak financial justification, if any at all.

From my experience, I can assure you that any big-ticket strategic sale involves a financial justification that includes much more than a simple cost analysis covering the total acquisition cost and intangible benefits. These days, corporate execs require a comprehensive financial analysis that they can agree with before they sign their name to a large deal. Submitting a deep and compelling justification is what it takes to close the larger strategic deal faster. Without it, the deal will flounder and the sales team will be pushing back their forecast quarter over quarter.

At some point, sales leadership needs to recognize that training their sales teams on how to build compelling justifications is a top priority. The answer is simple….  Shift the focus to the metrics that matter – the KPIs that the customer cares about – to “move the needle” and ultimately achieve their business objectives. This is how the C-suite gets to keep their job – and this applies to both the enterprise customer and the technology solution provider. Yet so few solution providers invest in the expert resources, time and energy needed to solve this problem. Truly amazing to me and I think I know why….

The pendulum swings from an industry sales focus to a geographical sales focus, back and forth over time. The geo model is typically a lower cost model and it offers local sales coverage in the desired territories. However, in a data driven world the industry model provides the opportunity to win larger and more strategic customer deals, but at a higher cost. This is due to the cost of the domain expertise needed to win, for your “A” player sales team’s higher compensation package, which is commensurate with their experience. But it is well worth it, as the  larger strategic deals they generate will deliver a much greater return to the business – both near and long term.

The Commitment

The goal for each sales pro should be to become the customer’s” trusted advisor”, the highest level of strategic partnership. They can only earn this badge of honor if/when they demonstrate to the key decision makers that they truly know their customer’s business and immediate issues, and they bring good ideas to the customer to resolve them. “A” players have a strong technical foundation, cultivate their deep customer relationships, and truly know their customer’s business. Training the sales team to becoming “A” players is a commitment to a process and an investment that will shift the culture and bring the highest return. This is the key ingredient in developing and maintaining a wining sales culture.

SAFE Agreements for Start-ups

by Tony Palladino

In the world of start-ups, entrepreneurs spend much of their energy seeking funding from the investor community, as well as from friends and family. While they would likely prefer to focus their energy on building a solid product, the smart founders recognize the high priority around running and sustaining their business. For the lucky ones, this can involve multiple fundraising sprints over several years. To “cross the chasm” as it relates to their product adoption in the marketplace, founders can lean on various different types of financial investment instruments, such as a Convertible Note, or a Simple Agreement for Future Equity (SAFE), among others. For this discussion, we will focus on the benefits and risks specific to the SAFE agreement.

The SAFE agreement is a simple template or blueprint commonly used by founders and investors to seal their partnership. The SAFE captures in writing the minimum details required to protect and satisfy both parties. The SAFE investment fuels the business for the near future without the complexity of having to negotiate the company’s valuation up-front (as would be required for a Convertible Note). This allows the founders to raise the capital they need to continue their product development, acquire customers and enhance their value creation capabilities –  without diluting their precious equity or losing control of their company. This makes the SAFE a highly desirable and popular financial instrument for early-stage start-ups.

The original SAFE agreement was created around 10 years ago by Y Combinator, a start-up incubator, designed to cover the terms around equity rights and liquidity events for both parties, founders and investors. In addition to Y Combinator, Airbnb and Coinbase are good examples of start-ups that had leveraged SAFE agreements in their early-stage of growth.

The SAFE serves as a bridge for the founders by extending the start-up’s cash runway to a future fundraising round. It also serves as a bridge for the investors to convert their investment into real equity at a percentage “discount rate”, often referred to as a “valuation cap”. 

Pro tip:  When establishing the valuation cap in a SAFE agreement, founders should resist the urge to undervalue their start-up’s potential. A conservative cap may offer short-term security, but it can also dilute the founders’ equity stake down the road when it’s time to convert. Founders can consider including provisions for adjusting the cap in the event of significant growth milestones or changes in market conditions.

Because SAFE agreements are simple and easy, it is quite normal to execute multiple SAFEs over time. Start-up founders should view each SAFE as a foundational building block in the construction of their equity structure and they should seek prompt conversion – liquidity event – when favorable terms arise. Delaying the conversion can lead to a compounded dilution, which could compromise future funding rounds or acquisition opportunities.

To hold a stronger position in the SAFE negotiation process with investors, the founders should leverage their critical mass and selling points, such as intellectual property (IP) ownership, patents pending, product development roadmap, customer and revenue growth, subscription pricing model, strategic partnerships and, most importantly, the strength of the leadership team. Of course, all of these and more should be addressed in the start-up’s pitch deck to investors.

For the early-stage investors, SAFEs offer a lower barrier to entry compared to traditional equity investments, reducing the up-front capital commitment and risk exposure. Having a lower cost of entry, SAFEs also enable more investors to participate in the fun and exciting world of early-stage start-ups.

Unlike traditional Equity Financing, SAFEs offer founder-friendly terms that prioritize flexibility and simplicity. Equity Financing instruments involve issuing new shares, diluting existing ownership stakes. SAFEs, on the other hand, postpone the determination of equity to a future liquidity event, enabling founders to maintain maximum ownership and control over their start-up. Later, as the start-up matures, its founders can (and should) consider alternative funding instruments, such as Convertible Notes or Priced Equity rounds, which offer a different set of benefits often tied to a larger investment. Having diversity among the investment instruments provides start-up founders with greater flexibility, while mitigating the risks around protecting their equity and control.

For the founders of early-stage start-ups, SAFEs provide a simple mechanism to raise capital without having to surrender equity or control of their company, preserving their vision and autonomy as they navigate the early stages of growth.

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