E-Commerce secrets to scale

042 – When To Hire Your First Sales Rep With Mike Poledna (Part 1 of 3)

042 – When To Hire Your First Sales Rep With Mike Poledna (Part 1 of 3)

E-Commerce Secrets To Scale is a marketing and entrepreneurship podcast that revolves around hearing the stories and strategies of successful entrepreneurs and e-commerce professionals to uncover scaling secrets that will impact your online store.

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Tanner:

This week is the very first episode of our three episode series with Mike Poledna from SalesLab Consulting. In this series, we’re going to cover something that almost every business owner struggles with and that’s sales. With the first episode of the series we’re going to talk about when you should actually hire your first sales rep and how you know when your business is actually ready to support a sales rep. If you’re a business owner, you know, how important sales are, you know, that you have to master sales in order to scale your business. So stick around, listen to the entire three episode series. You’re going to get a ton of value.

Tanner:

Welcome to the show. Mike, go ahead and introduce yourself to the audience.

Mike:

Yeah, thanks Tanner. I’m excited to be here. You know, as probably in the show notes, or people saw coming into this, my name’s Mike Poledna and my company is SalesLab Consulting, and I’m located in Northeast Florida. And with my company SalesLab, we work with sales leaders, CEOs, and helping them build high-performing sales team. So our focus is really in helping clients make smarter hiring decisions, develop their reps faster and retain their top performers longer. And you know, our approach is a little bit unique. We do it utilizing a data-driven approach. So our goal is really to help them eliminate many of the talent management mistakes that are made as a result of relying too much on gut feeling and a lot of pretty typical subjective approaches to hiring and developing and coaching well.

For me, the love of sales and selling was really cemented at a very early age.

Tanner:

That’s awesome, man. Sounds really exciting. What’s your story? How did you get started in sales? And can you kind of walk us through that?

Mike:

Yeah, so I guess if I think about it, my sales career, I’m in my mid-forties, but my sales career probably really begin in early teens. I grew up in a family owned business and we happened to have a retail component to our business. So if you weren’t in school and you weren’t playing sports, you were helping out in the family business. So early on I spent a lot of time customer in a retail setting and I really kind of fell in love with selling, and really it was while I didn’t think about it as selling at that time, it was really just about helping customers solve their challenges, their needs, and part of being a retail business. We used to also then go onsite to customer locations. And I certainly had a lot of manufacturer reps that I watched call on my family business for years.

And I think really from there, you know, I just knew I wanted to be in an outbound selling type of capacity or role in my career. You know, I really kind of gravitated more towards being outbound and getting onsite and sitting down with customers and understanding their business and their challenges, and then helping them solve those issues, those challenges, or even create opportunities to help grow their businesses. And so it was, it was really, I think for me, the love of sales and selling was really cemented at a very early age.

Tanner:

So, what was the family business? What did you guys do?

Mike:

Yeah, so this is going to blow some people away. The family business, it’s still an existence now. It’s almost a hundred years old. My father purchased the business when he was in his forties and he would have been the third owner of the company, but it was a flag and flagpole distributor. So we were at one time, one of the largest flag distributors in the country providing flags, flagpoles to municipalities and individuals really across the U.S.  

It took me a long time to really understand that detail and process mattered.

Tanner:

Oh well, that’s awesome, man.

So Mike, what would you attribute your success to over the years?

Mike:

Yeah, I would say, well, I guess I would describe myself as a continuous learner and someone who is always curious about how things work and why companies and people do the things they do. And I’m very competitive as well. You know, I want to do things better and faster than those around me. And so I guess all that said, you know, it took me a long time to really understand that detail and process mattered. You know, one of the biggest challenges I had early on in my career, more as a formalized sales career. So post-college you know, it wasn’t – while my mode of operating was to move fast and break things that was actually, you know, more negative early on than it was a positive. And while that works, in some situations, it doesn’t usually play out very well in the long haul.

So certainly you know, if you’re an early up and coming rep, that’s going to be a challenge, but absolutely if you want to be a successful sales leader and CEO. So I think what I would attribute my success to, was really part of that continuous learning, but also then realizing that part of how I was operating early on as a rep was going to be detrimental in the long haul and that I needed to become more detail oriented and more process oriented in order to create repeatable success for myself and for my clients and for my employees.

They hire too early or they hire someone thinking that it’s going to be a shortcut.

Tanner:

Well, I have to say that’s probably the most elaborate answer I’ve ever gotten to that question. So thank you for that, Mike. So I’m really honored to have Mike on the show today. We’re going to talk about sales as you can probably tell from his background. And sales is something that most business owners constantly struggle with of course. And because it’s so important, we’re actually going to split today’s interview into three separate episodes. So let’s jump right into part one.

Part one is when you should hire your first sales rep. I know a lot of entrepreneurs out there are asking this question every single day. So, Mike, what do you think is the biggest mistake that business owners make when it comes to hiring their first sales rep?

Mike:

There’s generally, I guess if you had to put in two general buckets, there’s really two mistakes that business owners will make when they’re hiring their first rep. The first one is they hire too early. And the second one is they try to hire from a competitor or at least someone who has industry experience thinking that sales will come easy. And with that first one, you know, they’re hiring too early that they’re not really ready for it. One, it may be actually financially detrimental to the business to hire somebody at that point. Or it may be a matter of, they’re just not prepared. They’re not actually ready to scale the business. And so it’s a wasted hire.

But really on that second one, you know, the intentions are good in trying to hire from a competitor because you think you’re going to shortcut the process. But in fact, many of them end up hiring. If it’s a good, solid competitor, they end up hiring somebody that was probably going to leave anyway. And that was maybe somebody else’s cast off or they maybe give too much credit to a competitor’s business. And they may perceive that there’s success happening on the sales side. When in fact, they may actually be struggling. So what you’re doing is, you’re hiring somebody else’s symptom of their problem, or potentially a symptom of their problem, and it’s not going to benefit your business, but yeah, there’s really those two common mistakes, they hire too early or they hire someone thinking that it’s going to be a shortcut and it’s just not a fit for their business.

Tanner:

Yeah. I mean, too many people think, oh, I have no sales. I have no revenue. I should hire a sales rep. And like you said, it’s not the right decision because sales is not that easy. You can just hire someone and magically overnight the sales problem is gone. Right?

Mike:

Correct. Yeah. A lot of them, to piggyback on what you’re just saying there, a lot of people will hire a sales rep, hoping, or even thinking that they’re going to come in and they’re going to be productive in the first 30 days that they’re going to knock down deals. They’re going to fill a pipeline and close deals in 30 days. Well, even if your sales cycle is 30 days, that’s highly unlikely. Worst case scenario, you don’t know what your sales cycle is. It’s much longer. And you’ve maybe budgeted for a rep saying, Hey, you know, I’ve got six months that I can afford to have a rep that they need to start paying for themselves. Well, if you have a nine month sales cycle or you don’t know what your sales cycle is, you’ve lost before you even started.

Tanner:

Yeah. And I would like to add that, you know, if you’ve got six months of runway with a sales rep and you’re dumping all of your cash into a sales rep salary, you’re probably not ready a sales rep, right?

Mike:

Yep. Oh, absolutely. Yep. I agree.

A company should not be hiring a rep, their first sales rep, or multiple reps until they have product market fit or they’re darn close.

Tanner:

So, what are some symptoms of a business owner being ready for a sales rep?

Mike:

Yeah, I think, let’s borrow a term most often associated with technology businesses, which is product market fit. You know, a company should not be hiring a rep, their first sales rep, or multiple reps until they have product market fit or they’re darn close. And so let’s talk about product market fit. You know, let’s define that they have a product or solution that addresses a clearly defined target audience. And even people within that target audience, those roles within the target audience they have a clear problem that they can solve and that the customer is seeking to solve, or at least is very close to seeking to solve. And, and that you have some revenue. So, you know, really you need to achieve or be very, very close to achieving product market fit before you’re really thinking about bringing on a rep.

I mean, the reason being quite simply, you’re still figuring things out. You don’t even know if what you’re doing is viable or not. And so you could end up hurting the company by spending money on someone who’s not going to be productive when you desperately need them to be productive. And until you really have product market fit, you don’t really know what type of rep you need to be hiring in the first place. You could end up hiring a really good sales rep, but meant for a different selling environment.

Tanner:

Right? Yeah. And I mean, you can’t truly scale without product market fit, of course. But what about service-based businesses?

Mike:

You know, I don’t think they’re really any different. I think you really have to have a clearly defined target audience, a problem you’re solving, a problem that they want to solve. I don’t think whether it’s a product or a solution or a service. I really don’t think there’s much of a difference. I think you really need to be careful, before you bring on that first rep, that you’re going to put them and yourself in a position to succeed.

If you don’t have the answers it’s highly unlikely that the first rep you’re going to hire is going to be able to figure it out for you.

Tanner:

So do you think that the CEO or one of the founders should be handling sales and, you know, really being successful with it and then being prepared to handle hand that over to a sale incoming sales rep? Is that the right way to do it?

Mike:

You know, I’m a big proponent of it, you know? So my simple answer is yes. Now there’s something in there that we said, you know, that that CEO needs to be successfully selling, well, we might need to define success on that one successfully selling meaning they’re good at sales and they’re executing. Yeah, that’s helpful. But I would say it’s more of do we have product market fit. So it’s possible to be out there in the trenches, selling, learning a lot of lessons that are valuable and would indicate you’re ready to bring on a rep, and then there’s being out there in the trenches and not learning the right things. I think the biggest key there is that the CEO or whoever, a co-founder, or one of the early on individuals within the company, somebody needs to be owning a sales function and mastering it to a certain degree because you need those lessons to be able to then pave the trail for who’s going to come on as your first rep.

If you, as a founder, or co-founder, CEO, if you don’t have the answers it’s highly unlikely that the first rep you’re going to hire is going to be able to figure it out for you. And that’s usually just a function of you’re getting what you can, what you can afford. And if you can’t afford much, you generally hiring an individual who doesn’t have a lot of experience blazing those trails and learning those lessons fast enough, that they’re going to provide you with the ROI that you’re seeking.

Tanner:

Yeah. I couldn’t agree with that more. I mean, if someone in the company already doesn’t have some sort of process dialed in, or an idea of what works, what doesn’t, how’s the new rep gonna come in and be successful with it, right? It’s like saying, okay, here’s the salary I’m putting you on, or whatever compensation structure you have go saw. That’s how it is. And it doesn’t work. And I know that because I’ve tried it.

Mike:

Well, you know what you were saying there, you need to, as a founder, co-founder, you need to go collect data about the market and how the market’s going to behave relative to your product or solution or service. You need to collect that firsthand. It is absolutely critical that somebody owns that knowledge, that data to be able to then pass that on and put the individual that you’re hiring in the best possible position to succeed.

I think in a perfect world, before you hire your first rep, there’s things that you have in place.

Tanner:

Yeah and not to mention being able to coach them and help them succeed. All that stuff is really important. But let’s talk about processes. No sales rep coming in is going to thrive without, you know, a clearly defined process, what they’re supposed to be doing, how to organize everything and stuff like that. What are your thoughts on that?

Mike:

Yeah, I think in a perfect world, before you hire your first rep, there’s things that you have in place, and they’ve got to be knowing your target audience. You need to know what your messaging, what successful messaging is going to sound like. You have to know your numbers. And I’ll talk about that in a second. And you’ve got to have a defined sales process. Now, all that’s not to say that it won’t change any of those won’t change later, but at least you have a place to start. And it’s also an indication that the founder owner has spent enough time selling to actually define those critical topics or really be able to address those areas. You know, we talk about, again, knowing your target audience, knowing your sales and marketing messaging and knowing your numbers, the numbers is the one that I think is super important.

The numbers are referring to, you know, what’s an average sales cycle length for you. What’s an average deal size, you know, especially in technology companies, you know, your key metrics are going to be, you know, what’s the size of your pipeline. What’s an average deal size. What’s your deal velocity. I mean, it’s just simple. What’s your inflow, what’s your outflow of cash. And so before you hire a rep and you start to lay down a salary and some incentive compensation, you really need to know what your numbers are so that you can back that up and support that.

Tanner:

Yeah, that’s a great point. You know, I think another thing that is really important is giving your sales rep the materials that they need to execute those sales. What do you recommend there?

Mike:

You know, this is actually an area where you see companies either spend way too much time or not enough. It’s hard. It can be hard to get it right, but I think if you keep it relatively simple in terms of what it is you actually need for where the business is at that moment in time you can navigate it. So I’m a huge fan of Donald Miller and StoryBrand, and what they’re putting out there in the market. You know, they’re all about keeping it simple and streamlined. Really the first thing you need, and I mentioned it earlier is, you need to have solid messaging to leverage. You’ve got to be able to leverage that in your sales outreach campaigns, you know, which is going to be your email, it’s going to be your phone outreach could be your social that you’re utilizing and social selling.

You need to be able to have that messaging then to support your, your marketing and drip campaigns. So getting your messaging right first is paramount, and then really to support that in terms of content or material, you really only need a few things to get started and then you can build from there. And so some of those things are going to be, you know, a landing page to support your sales and marketing campaigns. And then you’re, you’re going to want, let’s say like a PDF solution sheet that folks can download, because oddly enough, myself included, sometimes it’s nice to just be able to download something and put it in a folder and put it on your desktop and come back to it later. You don’t want to have to necessarily go browse the site again, to find it just to, just to locate the information you know, once you have your messaging and your email campaigns for sales and your marketing nurture campaigns and you have your landing page in your, in your solution sheet, you know, you can move on and get more of those additional items such as, you know, even just another landing page or two, you can start to add in infographics, you can create some videos, or you can create some mini case studies, but I think companies, like I said, they either spend too much time or not enough.

And there’s really just a happy balance in there. And it really isn’t quite as extensive as maybe a lot of the marketing gurus want you to think it is. You can build all that stuff out later, but there’s really only a handful of things you need to get started to drive revenue.

If you’re honest with yourself about where your business is you’ll know if it’s really, truly the right time to bring on that first rep or not.

Tanner:

Yeah. And I think that’s a good point. And I agree with you that some corporations overdo it. I mean, they’ve got 500 PDFs that they want to send you and all these lead magnets, whatever. And I’m a really big fan of Don Miller and StoryBrand. If anyone hasn’t read Building a Story Brand, I would highly recommend it. So, Mike, is there anything else that you can think of that would help a business owner prepare for their first sales hire?

Mike:

Taking you know, really just having a gut check about where your business is, you know, have you achieved that product market fit? Do you see your market as being stable enough over the next 6, 12, 18 months, depending on your sales cycle lengths, to sustain bringing that on? I would even go back before any of that and say, as an owner, do you know your market well enough that you can pass on knowledge, that’s going to put that first rep in a position to succeed? I think that’s the first part. I mean, as business owners, you know, it’s hard not to be emotional. If you need revenue, you want revenue, you need to grow, you want to grow. It can be tempting to want to pass this very critical function off to somebody else. But I think a lot of the things that we’ve talked about here if you go back and revisit those, and you’re honest with yourself about where your business is you’ll know if it’s really, truly the right time to bring on that first rep or not.

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