When a company looks to reduce cost and headcount, why are sales people the first casualties?
With exposure to all types of organizations, we see one constant; successful sales resources are continually undervalued and misunderstood. The only employees directly responsible for revenue generation are constantly undermined, under supported, and kicked directly to the curb when organizations look to save money by reducing overhead.
If a company is struggling to hit revenue targets, why is the sales team the first to see reduced numbers? Is it more important to create a newer version of the technology than it is to find customers, sell the tool, and get feedback from the market, THEN evolve based on customer feedback?
The majority of technology companies believe, ‘if we build it, they will come’. We call this the ‘hope strategy’. While this approach has yielded success for a select few, the majority of organizations need to focus on sales and marketing to increase revenues and new customers. Reliance on a network of channel partners, SEO, social media, and trade shows is not enough to sell technology into a crowded, noisy market.
Think about the true opportunity cost behind slashing a sales resource and the necessary rehire when it is determined that revenue does not magically appear through Google ad words, VAR’s and that Vegas trade show that wounded your team for 2 weeks.
- Time to hire a sales resource (2-4 months)
- Time to train (1-3 months)
- Time to build a pipeline of business and absorb the sales cycle (dependent on sales cycle, 3-9 months on average)
- Factor in the cost associated with finding the right person and time it takes to get them productive (generally a total of 6-12 months based on independent research) and it becomes clear that sales people are undervalued and unappreciated.
Generally, sales people are making a smaller base than others in the organization and if properly incented, make money when the company makes money. Why then, do so many companies continue to slow revenue growth by continuing to make the same mistake?