Why Startups Need at Least One Salesperson
Startups are built to run lean, with employees wearing many different hats. However, it’s not unusual for the responsibilities of sales to fall on the marketing team or even the company owner.
There are benefits when others fill the role of salesperson: You save money on salary, benefits, and commission. Even if your team has strong sales skills, though, this is not ideal. Having at least one dedicated salesperson affects your company in a profound way.
Here are six important reasons why even a lean startup needs at least one dedicated sales representative:
1. Close more sales
Perhaps the most important reason to hire a salesperson is that hiring the right one means you will sell more. Even if you have a great product, sales aren’t automatic. The sales process takes a lot of time and effort. Here are some interesting statistics that show exactly how much effort the sales effort takes:
- The average prospect must be cold called eight times in order to respond.
- The vast majority of sales require five follow-up calls before the deal is closed.
- Between 35 to 50% of all sales go to the vendor that responds first.
The last statistic is especially important because it shows how time-sensitive sales can be. If you don’t have someone dedicated to sales, your inability to pounce on warm leads as soon as they come in can compromise anywhere between one-third and one-half of all potential new accounts.
2. Allows everyone to focus on their strengths
Sales takes a lot of effort, and it will quickly eat into the daily duties of the rest of your team if you don’t have a dedicated rep. With a structured sales process and one person committed to bringing in new business, the rest of your startup team can focus on building a superior product and delivering excellent customer service. When everyone focuses on their strengths, the entire company will be in a much better position.
3. Improves the value of forecasts
Without a dedicated salesperson, your sales processes will be sloppy and all over the place. When you have a dedicated salesperson, they’ll be able to spend time building a sales pipeline that includes projects likely to close within a specific period of time. You can then use this information to more accurately forecast future revenue, allowing you to run your business more efficiently. As an added bonus, this information will also be useful if you need to apply for financing or if you’re seeking investors.
4. Receive valuable feedback
When your sales efforts are managed by a handful of employees who only conduct sales part-time, you end up with an extremely haphazard sales process. Information gets lost, leads go cold quickly, and deals fall through the cracks. Most importantly, you won’t have anyone who is focused on collecting customer feedback and passing those findings onto the product development team. A full-time sales rep not only will be able to gather and organize this feedback, but they can take the time to actively solicit it as well.
5. Build and maintain relationships
Selling isn’t just about finding qualified buyers and closing a sale, it’s about building relationships. When you have non-sales employees handling lead generation, lead nurturing, and sales contracts alongside their other responsibilities, they tend to keep client relationships transactional. In order to maintain business growth, however, relationships are key. Statistics reveal :
- Reducing customer attrition by 5% can increase profits by up to 80%.
- An average company loses as much as 30% of their customers each year.
- Retaining a current customer is up to ten times less costly than acquiring a new one.
Without a dedicated salesperson or two, it’s extremely difficult to keep up with all your accounts making client retention—and renewals—a difficult challenge.
6. Get an additional perspective
As the owner or the manager of a small business, you’re simply too close to the product to be objective. When you bring in a salesperson, you bring in a new face and a fresh perspective. Salespeople can look at things from the customers’ vantage point. Entrepreneurs spend so much time brainstorming, developing, and building products themselves, it is much more difficult to imagine the company’s offering differently.
Hiring your first salesperson as a startup is a major step. You need to make sure that your product is ready to be sold. You’ll also need to assume new costs: base salary, benefits, and commission incentives. Perhaps most importantly, you need to be ready to turn over some of your company’s success into someone else’s hands. Doing this can fundamentally change how you run your business moving forward and for the better.
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