When is the time right for Renaissance vs. Coin-operated Sales?
At Altus Alliance, we see a lot of clients who ask for guidance on sales strategies, compensation, and how best to drive results and increase sales. CEOs and investors, in particular, are interested in results and how to make the most out of their sales team.
However, getting the results that you want from your sales team isn’t always simple and straightforward. There is not a one-size-fits-all plan that will generate peak performance. In fact, many sales leaders struggle with sales compensation and how to best motivate their sales reps. Some of the members of the most productive sales are motivated by a plan that rewards them for all of their contributes and gives them a chance to make more money. Often, those who are satisfied with a standard salary and a bonus that might be tied to overall company performance might not have the drive you’re looking for to grow the business.
Here we discuss renaissance vs. coin-operated sales the appropriate time to use both.
Renaissance Vs. Coin Operated Sales Strategy
In the paper “The Sales Learning Curve,” by Mark Leslie and Charles A. Holloway, two types of salespeople are defined, both critical to growing businesses - the “Renaissance sales rep” and the “coin-operated sales rep.” The Renaissance sales representative is extremely resourceful, able to develop a personal sales model, collect materials as needed, and facilitate broad-based learning by the company. These sales reps are valuable because they can share data and information within the entire organization and reduce uncertainty. In addition, they are leaders responsible for company-wide learning and thinking outside the box.
On the other hand, coin-operated sales reps are goal-oriented and able to use the resources available to them efficiently. Though these types of sales representatives are necessary, they don’t necessarily speed up learning or increase sales at an exponential rate. One of the takeaways from Leslie’s and Holloways’ critical insights from their paper is that when you’re just starting off getting your company off the ground, coin-operated salespeople are unnecessarily expensive.
Let’s discuss what you need to know about renaissance sales and how those sales reps differ from those who are strictly goal-oriented.
What You Need To Know About Renaissance Sales
Businesses should consider a few things when they want to navigate the sales learning curve successfully. First, the entire team should be focused on it and be tackled by people who have the drive to pursue the initiative with an open and mindset framed for learning.
Additionally, it should be well-established that any sales strategy should be open to adaptation. Nothing should be set in stone, and new information is learned and applied to the company plan. The sales team must dive into the success requirements and understand the pain points and the company’s value proposition for each of those pain points.
Only when the core model has been fully baked is it time to hire the salesforce team that will carry it forward. The renaissance sales rep comes in, as the learning curve is different from that of a sales rep. The team that builds the core and is equipped for learning looks different than the team that carries the process forward once the mission has been flushed out.
Here are a few characteristics that come with a renaissance rep:
- They are entrepreneurial and have a drive for success and a love of new challenges
- They have experience with early-stage companies and want to be a part of that again
- These sales reps are willing to learn and adapt over and over again
- A renaissance rep can roll with the punches and never points blame at any particular department of the business
- They have the strength and determination to push back and make the sale
- They have faith that the money will come in because they believe in the process
When Are Coin-Operated Sales Strategies Appropriate
Many companies launching new products into the market are tempted to immediately hire a vast sales force to gain as many customers as possible. However, hiring an entire sales force too early might cause you to spend too much money and then fail to reach your revenue expectations. Instead, if you want to sell a new product efficiently, your entire organization needs to dive into how the customers will acquire and use it. As we mentioned above, this process is called the sales learning curve, explained by Mark Leslie and Charles A. Holloway.
As your sales increase, the learning process unfolds in three phases: the initiation, transition, and execution phase. Each step requires different sizes and styles of the sales force and represents the stage in a company’s strategy. Adjusting those strategies as your business grows and progresses along with the sales learning curve can help you plan your budget more effectively, set better expectations, and avoid shortfalls.
The coin-operated salesperson comes into play during the execution phase. Sales reps can be hired quickly and in bulk, if your company can financially handle it, but only if your sales management is confident that the product has achieved traction. When in the execution phase, your formula for success has been flushed out, and the need for more traditional salespeople arises. You need people who require nothing more than a territory, a sales plan, a price plan, and simple marketing materials to bring in more sales.
Now that you know a little more about when coin-operated sales are appropriate let’s dive into a little more about the phases of the sales strategy.
Phases of A Renaissance Sales Strategy
The Wall Street Journal recently reported the news of sales executive Joanne Bradford joining Yahoo after a brief stint at Spot Runner reminded me of Mark Leslie’s commentary in his seminal paper on the Sales Learning Curve published in the Harvard Business Review. In that paper, he described three sales phases — Initiation, Transition & Execution — of a company’s market entry and the accompanying sales talent that fits with the phase. The sales talent needed at the Initiation phase is more akin to a Product Manager function than a pure sales role.
Joanne is one of the top two sales executives that Altus Alliance has ever worked with. She was certainly what the doctor ordered when she came into Microsoft early this decade after a long tenure at Business Week when Microsoft was in the Execution phase. There is no doubt she’ll make a major impact at Yahoo as well. Not knowing what happened at Spot Runner, we can only speculate that it may have been a similar situation to countless sales reps and executives hired before the startup world with storied sales careers only to find it isn’t a fit at the startup phase of a company.
For a founder that isn’t steeped in Sales & Marketing, it is appealing to hire a Sales leader that fits the profile of someone who has many plaques on their office walls with etchings of “President’s Club” that speak to their sales success. However, these are executives that are accustomed to being surrounded with a well-defined market and product to meet that market. Further, they are used to the full complement of sales collateral, systems engineers, sales support, defined sales compensation model, and the like common in the Execution Phase.
Unfortunately, as Leslie states “It’s both unrealistic and potentially dysfunctional to assign large sales quotas in the Initiation phase”. He goes on to say what their priorities ought to be. “The members of the sales team should be encouraged to focus instead on learning as much as they can about how customers will use the product.” The byproduct of hiring the former President’s Club member is frequently great frustration as the sales exec finds he or she can’t earn the money they expected as there are too many issues with the product and go-to-market strategy. He outlines what is needed at this phase as follows:
“The types of skills needed during this phase differ from those needed to sell more mature products. They include a facility for communicating with many parts of the organization, tolerance of ambiguity, a deep interest in the product technology, and a talent for bringing customers together with various functional teams within the company. Salespeople must be resourceful, able to develop their own sales models and collateral materials as needed. We think of this kind of person as the ‘renaissance rep.’”
Later, in the Transition phase, sales management should focus on developing a repeatable sales model, refining market positioning, and more. Leslie talks more about the type of sales rep needed at this point.
The original renaissance reps should continue to focus on learning. The people hired at this stage — we call them “enlightened reps” — should be comfortable contributing to a still-evolving sales model but do not need to have the analytical and communication skills of the renaissance reps.
At this point, the executive team should assess whether they are confident that they have sufficient traction and a proven, repeatable sales process. If they are confident, that is the time to rapidly scale the sales organization. Leslie expands on this…
“In this phase, when the formula for success has been developed and all of the support requirements for sales reps are in place, the company needs more traditional salespeople — what’s known in the industry as “coin-operated reps” — who require nothing more than a territory, a sales plan, a price book, and marketing materials to bring in orders.”
The common mistake of hiring a coin-operated team when renaissance reps are needed is a costly and time-consuming mistake that delays success. Counter-intuitively, this “go slow” approach is the fastest way to achieve success.
Are you ready to launch your sales success? A team like Altus Alliance can evaluate your goals, help you create a better strategy for success, and create sustainable business growth. We have Revenue Growth Services combined with our proven High-Performance Revenue methods guarantees accelerated revenue tractions. Get in touch with our revenue and marketing consulting experts today and see how we can help you today.