Escaping the Founder's Sales Trap

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My 3 client personas

Overview

Most founders start as the best salesperson in the company, and many stay there far too long. What helped you build the business can quietly become the very thing that limits its growth.

In this session, we'll break down how founders become the bottleneck in sales, why teams struggle to replicate their success, and what it really takes to transition from rainmaker to leader, and build a team that can sell without you.

Discussion

• Diagnosing the Founder's Sales Trap
• The Four Stages of Learning
• Identifying Your Ideal Sales Candidate Profile
• Analyzing your current team
• Overview of compensation
• Overview of Sales Quotas
• Creating your Onboarding Plan
• Creating your Sales Process

Diagnosing the Founder's Sales Trap

When you first started your company, you did everything, from marketing and sales to customer service and operations. The company was, and still is, your baby. All of this has made you the best at selling your products or services to others.

As the founder, you have the passion, knowledge, experience, and stories to share with prospects, setting you up to make the sale like no one else. Your sales success eventually leads to more sales than you can keep up with while you're still running a growing company.

So you hire a salesperson or a sales staff to take sales off your plate. As they begin, you think they'll have that same "get after it" mentality that you did when you were selling. You make every assumption that they'll pick up where you left off. Unfortunately, the new salesperson doesn't have the built-in stories, experience, and insight that you do.

The knowledge and experience gap between you and your new sales team can cause frustration on both sides if you're not prepared for it.

The Four Stages of Learning

Stage 1: Unconscious Incompetence

To be unconsciously incompetent means to be blissfully ignorant. You don't know what you don't know.

Stage 2: Conscious Incompetence

When you become consciously incompetent, you know what you don't know and must decide whether you want to learn it. New team members are in this stage when they first join your team. This stage can cause panic and self-doubt, but for others, it can get them fired up and help them tackle the learning process.

Stage 3: Conscious Competence

Once you know a skill, you become consciously competent. You know how to do something, but the task requires thought and practice, and can be mentally draining.

Stage 4: Unconscious Competence

You are unconsciously competent when completing a task becomes second nature. You automatically complete a task without thinking it through, it's as easy as a habit.

The downfall of unconsciously competent people is that they're rarely good teachers. Team members look at you as if you've always been this competent, and it's difficult to step back into Stage 3. The best teachers can put themselves back in Stage 3.

Why Founders Have It All

Founders have the passion

If your team member shared your level of passion, they may have started a company to compete with you. However, by creating a company with a healthy culture, a compelling product or service, and a competitive compensation package, you will inspire your team to be passionate about their work.

Founders have the experience

Assuming that your sales team will hit the ground running isn't fair to you or to them. Outlining their onboarding plan one year from today and then reverse-engineering it into 30, 60, 90-day, 6-month, and 1-year plans will set you both up for success.

Founders have the knowledge

You were once a beginner in this industry. Learning the knowledge necessary to lead projects and sell your services is possible. A sales playbook is the best way to instill your systems and processes into your sales team.

Founders have the best stories

You've been part of the company since day one, so it's common that you naturally have the best stories. A prospect hands your new team member an opening and you already have three examples ready, so you cringe and take over the meeting. They watch you tell the story and close the project, and assume they'll never get that good without bringing you to every meeting. And you think, "Why do I need them if I close every project?"

Create the plan

You can't have too many stories. Write a story for your 10 best case studies.

1. Using a voice memo, tell the story.
2. Paste the transcript into AI.
3. Use the prompt: "I'm creating client stories for my sales team to use with our prospects. Knowing what you know about [Your Company], will you edit this transcript, converting it to a conversational story that my team can use?"

Identifying an Ideal Candidate

An ideal candidate profile encompasses the characteristics of the perfect candidate you want to hire. Brainstorm the characteristics, then write a profile of that person.

Ideal characteristics

Ideal characteristics help you and the candidate make an informed decision about whether they should join your organization. Including your core values, what characteristics are you looking for in a candidate?

Ideal candidate questions to identify a fit

During the interview process, you want to ask specific questions about your ideal characteristics that lead to an ideal answer or a red-flag answer. This ensures that you're making the right decision for each characteristic.

Analyze Your Current Team

Right people, right seats

The Skill Will Matrix categorizes your team members based on their willingness to perform a task and their skill level for accomplishing it well.

Will: the horizontal axis

Will is the motivation, enthusiasm, determination, and go-getting attitude you exude toward a task. Their attitude toward sales activity measures each salesperson's will.

Skill: the vertical axis

Skill is the ability to accomplish the task. Your salespeople's skill is measured by their capability to convert sales activity into closed business.

Quadrant 1 & 2

Quadrant 1 characteristics (The Stars)

Your Quadrant 1 team members have the skills and motivation to succeed in their role, and are commonly next in line as a future leader in your company. They can lead projects, strategize new markets or products, develop new team members, and handle responsibilities effectively.

They can handle autonomy; however, you don't want to ignore these team members. Instead, you want to nurture and develop them. You can challenge them. They typically compete well with other Quadrant 1 team members (if they're the only Quadrant 1 team member, they may become complacent). Ensure that you have contests and incentives that motivate them. If you don't nurture your Quadrant 1 team members, they may lose motivation and become Quadrant 2 team members.

Quadrant 2 characteristics (Potentially Disengaged)

Your Quadrant 2 team members have the skills but lack the motivation to do so.

Long-term: likely former Quadrant 1 team members who lost their motivation, possibly replaced by a new top performer. They likely have an openly negative attitude and speak on the team's behalf. They resemble fallen angels, living in the past, "Remember when...". Don't forget they know how to be great.

Temporary: could be un-nurtured Quadrant 1 team members whose results went unnoticed, or something in their life (business or personal) cost them their drive. The good news is they are temporary and can be great again.

You can coach Quadrant 2 team members back to Quadrant 1 by recognizing their achievements and serving as their cheerleader. Give them projects that align with their interests or career goals and then recognize their achievements. You may isolate a long-term team member until their attitude or motivation improves. If they remain Quadrant 2 too long, they may become resentful, which can destroy the team.

Quadrant 3 & 4

Quadrant 3 characteristics (The Learners)

Your Quadrant 3 team members are motivated but lack the skills. These are most often your newer team members or those you've promoted into a role they've never held before. They're very excited about the opportunity they see to succeed. Ensure you provide them with an onboarding plan that outlines the steps and expectations for success. Provide them with training guides, workbooks, scripts, and opportunities to shadow other Quadrant 1 team members.

If you don't give them a plan and they have to figure it out on their own, they may become frustrated and give up. With proper guidance, they will go from Quadrant 3 to Quadrant 1. However, if a long-term Quadrant 2 team member influences them, they could become a Quadrant 4 team member.

Quadrant 4 characteristics (The Strugglers)

Your Quadrant 4 team members lack the skills and have lost the motivation to improve. They were once great, or you saw the potential in them to be great, but due to unforeseen circumstances, they have "fallen" from any of the other quadrants.

Before you dismiss them entirely, identify why they are a Quadrant 4 team member.

• Bad hire: reset expectations immediately. If they improve, great. If not, consider cutting ties immediately.
• Poor onboarding process: create an onboarding plan and reset expectations. It's okay to say, "This is my fault since we didn't give you the plan. This is where we will go from here."

As John C. Maxwell says, "Sanctioned incompetence demoralizes." By allowing or ignoring bad behavior, you're impacting the entire team. So be sure to consider this team member's impact on your organization.

Compensation

There are three common types of compensation plans: 1. high base, low commission, 2. low base, high commission, and 3. 100% commission.

High base low commission

High-base, low-commission compensation plans are typically used for long, consultative sales cycles. The lower commission rate compensates for the risk the company is taking by paying a higher base salary.

Low base high commission

A medium-to-low base and high commission are typical for a shorter sales cycle. The risk lies with the salesperson, as they can quickly turn sales into commission.

100% commission

A 100% commission plan is successful for seasoned sales professionals. The risk is entirely on the salesperson to close business, but they can make a higher commission rate and larger overall income. A draw against commission is common to ensure the salesperson receives pay even in a down month.

Guarantee

For seasoned sales professionals accustomed to higher income, it is common to offer a fixed guarantee for a set period when hiring them. If the salesperson you hire has averaged $192,000 a year, yet your base salary is set at $60,000, you can offer them a guarantee for the first 12 months that matches their previous income.

• Base salary: $60,000 ($5,000 per month) with a guarantee of $192,000 ($16,000 per month).
• $5,000 base + $11,000 guarantee = $16,000 per month or $192,000 annually.

If your sales cycle is less than 1 year, you could tier down the guarantee to match it. You can also temporarily increase your commission rate to incentivize them to close business sooner.

Sales Quota

When creating a sales quota for your team, there are 2 reference points to follow. It's critical to calculate which model aligns with your business. Each salesperson should:

• 3X their total compensation in gross profit, or
• 5x to 10x their total compensation in total revenue. A lower multiple is common for high-profit-margin companies (over 40%), a higher multiple for low-profit-margin companies (under 40%).
• Gross profit multiple is common in: construction, insurance, agencies with high COGS, materials, or logistics.
• Revenue multiple is common in: consulting, SaaS, mortgage, real estate, agencies (recruiting, marketing, travel), pest control.

Inclusions for total compensation vary based on base salary, commissions, bonuses, payroll taxes, benefits, and overhead (computers, phones, software, training, office space, etc.). It's important to include what feels best to you.

Gross profit is what a business retains after subtracting cost of goods sold from total revenue. It doesn't account for operating expenses (rent, utilities, administrative). Net profit is the actual profit after deducting operating expenses. COGS is the cost directly tied to creating or procuring a product or service (raw materials, direct labor, marketing, shipping, administrative costs, software). In consulting services it's common to include consultant fees in COGS.

3X their compensation in gross profit

$150,000 total package = $450,000 gross profit generated.

5X to 10X their compensation in revenue

$150,000 total package = $750,000 to $1,500,000 total revenue.

Onboarding Plan

Measuring success

Imagine analyzing the success of your new team member 6 to 12 months from today.

• What does their success look like?
• Will they have closed a certain number of accounts?
• How healthy is their pipeline?
• What is their income level?

Creating the plan

Create their onboarding plan by reverse-engineering their success at the end of their first year. Then work backward at each mile marker. Your result will be a 30-day, 60-day, 90-day, 6-month, and 1-year plan.

Sample Plan for a New Team Member

30-day accomplishments

• Has a clear understanding of the organization.
• Has shadowed 16 sales presentations (4 presentations per week).
• Has created their 100 Strong Prospect List.
• Is averaging 5 Quality Conversations per week.
• Has made 100 dials, set 4 meetings, and presented 1 proposal.

60-day accomplishments

• Has shadowed 36 sales presentations (4 presentations per week).
• Has maintained their 100 Strong Prospect List.
• Has made 400 dials, set 20 meetings, and presented 6 proposals.
• Has closed 1 account.

90-day accomplishments

• Has a clear understanding of the organization.
• Has identified how to solve their problems or who to contact.
• Has shadowed 48+ sales presentations.
• Has made 1,000 dials, set 35 meetings, and presented 12 proposals.
• Has closed 3 accounts.

6-month accomplishments

• Has a clear understanding of your products and services, an ideal client, the sales process, and how to win.
• Is consistently meeting their KPIs or goal tracking sheet items.
• Has closed 6 accounts.
• Made $74,000 year-to-date.

12-month accomplishments

• Is a valuable team member.
• Meeting sales KPIs.
• Has closed 12 accounts.
• Made $128,000 year-to-date.

Your Onboarding Plan

Your Sales Process

Step 1: Lead generation

Gather leads and research each prospect.

Step 2: Initial contact

This is the first contact with a prospect where you identify their personality style and create a buying atmosphere.

Step 3: Needs analysis

This is the most significant step in the entire sales cycle. After creating a buying atmosphere, you ask the prospect questions. This is where you identify pain and the need for your products and services.

Step 4: Presentations & proposals

After evaluating your prospect's needs and personality style, you create a proposal and deliver the presentation.

Step 5: Negotiation & handling objections

Ideally, you identify potential objections during the needs analysis and proactively address them in your presentation. However, prospects often raise objections after reviewing the proposal. Address each concern to move the sale forward. This is also when you answer additional questions and when negotiations happen.

Step 6: Closing

The close is when we ask for the business. This sometimes requires revisiting Step 5 to handle additional objections. Then, you return to this step to ask for the business again.

Step 7: Follow-up

A step-by-step follow-up system ensures client satisfaction after the sale. Proper follow-up can lead to additional sales. It is also an ideal opportunity to ask for referrals and testimonials.

Your Sales Process

Lead generation

1. What are 3-5 ways you generate leads today?
2. What percentage of your opportunities comes from each lead source?
3. How are you deepening relationships with your current book of business?
4. If your primary lead source (or top client) disappeared, what would happen to your revenue?

Initial contact

1. How does your team make initial contact with a prospect (call, email, etc.)?
2. Is there a defined process that everyone follows, or does everyone handle prospects differently?
3. What is your lead-to-appointment ratio?
4. Does your sales team know how to adjust their communication style based on different buying styles?
5. Have you ever listened to or observed your sales team's initial calls?

Needs analysis

1. How do you set expectations for the meeting?
2. What questions do you ask your prospect to determine if they're qualified (decision-maker, need, timeline, budget)?
3. What questions uncover your prospect's PAIN?
4. What PAIN do you solve?
5. What is your appointment set-to-proposal ratio?

Presentation & proposals

1. How can you ensure your team is not mindlessly emailing proposals?
2. What is your proposal-to-close ratio?
3. Are your proposals customized for each prospect, or do they cover every product or service you offer?
4. On a scale of 1 to 10, how confident is your team when discussing price?

Handling objections

1. What are your 3-5 most common objections?
2. Do you answer an objection with a question, or do you tend to accept the first objection and not continue to close the business?
3. What client stories answer your most common objections?

Closing techniques

1. How will you change the end of each meeting to ensure you've closed for next steps?
2. How many of your open opportunities don't have defined next steps?
3. What is your lead-to-close ratio?

Follow up

1. What is your follow-up process with existing customers?
2. How are you identifying upselling or cross-selling opportunities?
3. How intentional are you about asking for referrals?
4. What role do referrals play in generating new business today?
5. How do you ask for testimonials or reviews?

Action Items

Recommended reading

1. Measure What Matters by John Doerr.
2. Who by Geoff Smart.
3. Powerful: Building a Culture of Freedom and Responsibility by Patty McCord.
4. Sales 101 by Zig Ziglar.