Building And Managing A Successful Sales Team In The U.S. Market, Part I
Pirjo Tuomi, an experienced Finnish saleswoman who has worked in the U.S. for the past 16 years, presented her experiences and tips for Building and Managing a Successful Sales Team in the U.S. Market at Verso Software Sales Camp last week (see our previous post from the event). Pirjo has long experience from the U.S. B2B sales, positions from Sales Rep to SVP Worldwide Sales, going through 5 M&A's and 1 IPO, growing a firm from zero to $250M in revenues and up to 120 team size, among other things. In the following, I will also reflect points from Jussi Harvela's presentation also covered in the previous post.
First of all, Pirjo stated the U.S. market is obviously a vast and a hugely competitive one, accounting for third of the world's 500 largest companies and over 40% of world’s enterprise software sales. Local sales presence and sales support is crucial. For getting the first reference customers, you should look to work very closely with them, developing the product together and building and managing the expectations. Winning the first deal is crucial, and will require special effort and perhaps special arrangements like discounts and on-site engineering support commitment. The entire firm needs to be focused on closing the deal. Titles are sometimes important and thus for example the CEO should participate in the sales process as well as needed. As Jussi also stated, you should aim for the big and known names first -- you need to get a reference customer which other firms know by name. The most important thing is to build reputation and enable further sales.
One clear differentiating point in the U.S. business culture, repeated by both Jussi and Pirjo, is the sense of urgency - the U.S. business culture is used to focus solely on particular initiatives and getting them worked out in due course and then moving on to next one. For example in Finland, a lot happens in a "multi-tasking" mode instead, and thus takes more calendar time. In the States, if you don't follow up the next day (or same day) after your meeting, you may have to start all over in two weeks when you get back with the material you promised to deliver. So, when you are pushing a deal forward, do not let your grip soften - you will need to follow up constantly. Maintaining the momentum is everything. "Do it yesterday!" is the mantra, Pirjo stated. However, this does not mean that you would be able to score deals with major corporations in less than six months, it does take time to go through all the necessary steps.
Another point to consider is the fierce competition. Pirjo emphasized you can be sure the deal is not "in the bag" until the shipment has been made and you have received the payment. Having signed paperwork does not mean the deal could not still go south. The competition intensifies the closer you get to finalizing a deal, and you can be sure if there is an existing provider, they will use all possible means and tricks to just try to keep their business with the customer.
To enter the U.S. market, as an entry requirement the firm should look to reserve minimum $1-2 million investment, Pirjo explained. Establishing the sales and the support organization, a legal entity, starting basic marketing activities and establishing awareness (yes you need to do that), and tailoring the product to the U.S. market will take time. Furthermore, depending on your deal size and the customer organization size, closing the first sales could take anywhere from 6-12 months or more. It will likely take 2-4 years to reach $5+ million in sales, Pirjo argued.
Next week in the second part to this post we will look at specific tips on setting the sales force up for success in the US.
Thank you for a great article, it's a shame I missed the presentation. Having spent the last two days at Global Clusters seminar and workshop these things have been on top of my mind.
I have a gut feeling that many Finnish companies underestimate the amount of competition at the U.S market. Many of us could start by practicing fierce follow-uping in the local market first :)
I fully agree with Pirjo's comments! I have worked in the US marketplace (enterprise software) the past 12 years and some of that experience is in my book from Talentum (Onnistu suuressa maailmassa). The investment, the competition and the pace is very different to that of Finland or even Europe.
Petri I. Salonen
Good points.
Taking Pirjo's recommendations, When you get in to the act, you should plan and implement some more key things as these may be the real challenges such as the following
1. How would you make sure that you get the right People to spearhead your product or service selling and make your plans realistic?
- Create a proper job specification and post it in popular Job portals such as Monster,Dice,SimplyHired and JobVite. Review and assess the applicants and short list them. Check their Linkedin or Zoominfo profiles . You can also seek the help of Head hunting firms depending on your budget and urgency.
- First conduct Telephone interviews and schedule a face to face meeting in the USA. Before this meeting ,Suggest them to come with a plan on how he would kickstart your business and help achieve goals. Get people from locations closer to where you want to start your business as this is more predictible (e.g East coast - New York means people from New jersey or Boston or Connecticut makes more sense than seeing people from the West Coast or Mid-west)
- Conducting background checks and asking for 3 professional references will help you immensely to select the right person. In the US, You will find most of the sales people communicating very effectively, but to know if they can really sell and make revenues , you need to have an uncanny knack of getting the insights and selecting the right people.
- Be cautious to get the so called Veterans of Business development or Sales for a Start up company and people who have crossed 35 to 40 epecially for a start up business that needs some one to be hands on with a lot of initiatives.
- Get the right person who understands your culture and can work in a collaborative fashion with your Nordic team. Disconnects between the US Sales and your product team in the Nordic countries can have diastorous effects.People who have worked with European countries especially in the Nordic makes more sense.
- Finally having spent a lot of time in the above,select some one who will stay with you for a fairly long time showing commitments as you will see a lot of lead time when starting a business. In the US leaving a company is very simple, its just a 1-2 weeks notice.
- Then you need to understand the US compensation and social benefits in a particular state (it varies in texas and New york for instance) and evolve a compensation that is attractive to attract and retain talent as well as meets your company needs. especially for sales ,plan a reward mechanism that will make them take initiatives as well as stay.
- Onboard the people,make them to visit Sweden,Denmark,Norway or Finland ,where ever you are located for a weeks time. Ask the Sales head you have recruited to give you a Long term and short term Sales plan. Go through the costing and revenue plan in detail. (There can be a specific 90 day fast track plan)
- In the US ,Get your office closer to your clients location (more so based on your demographics)
- As a CEO or CTO , Plan moving to the US for the first 3-4 months to work and support the sales team.CEO meetings are common in the US to give commitments and closing the deals .may be you can plan a frequent travel too.
- You need to have a strong process oriented sales in terms of Lead generation,qualification and deal closures (Put a process and Use Salesforce.com).Have weekly ocnference calls/meetings , Drive /delegate the sales head to give you a weekly status with the ongoing follow up and action plan. Assess your gaps and risks during this time and try to mitigate them.
- Make your Nordic team (key members supporting sales and customers) to work flexibly with the US timings as this is important to close and sustain business.
These are some of the key things in my experience managing sales in the States as well as in Nordics. There are a number of other things to plan and do ,I have shared some of my thoughts in response to this article....
To summarize, you need to take a deep dive to do business in the US
Sankar Nagarajan
http://www.linkedin.com/in/nsk007
Sankar,
Huh, thanks for the comment(s)! I guess I don't need to bother writing the second part at all then... ;)
-Miikka
[...] week we covered some basics in getting into the U.S. B2B software market. This article further elaborates the tips from the presentation by Pirjo Tuomi, who has quite a [...]
People will be excited to use Blue Mars for music, a place for self-expression and community. ,