The Franchise Sales Rep – Where Did They Go?
By Jay Valentine, ContingencySales.com
The difference between a “franchise player” and anyone else is not two to one, it is not 50 to one, it is infinity.” – CEO of High-Tech Company
We were talking about programmers and this CEO said he could hire the best talent, pay competitive salaries, and get terrific output from his team. Even the best hire stood in awe of the “franchise player,” that one special individual who not only coded better than the rest but brought ideas that changed the problem set altogether.
Reed Hastings of Netflix fame recently revealed his view that the difference between a good and great programmer can be 10,000 to 1.
Sales too used to have franchise players and they made all the difference.
One company we recall was on its 5th round of VC funding, had never won a deal for more than $350,000 a year, never made a profit, the options appeared worthless. They hired 14 new sales reps - for the 3rd time.
At the half-year mark, only one of the sales reps had closed a deal in six figures. Only one. A bit later in the year, one of these reps, a sleeper it seemed, found a very different way to explain their technology using composite storyboards.
Storyboards simplified a terribly complex technology story so it could apply to a host of issues, not just the one most of the reps relentlessly chased.
That storyboard concept, fought fearsomely by the marketing department, was really simple. Thus, marketing hated it.
A few months later, that storyboard landed a deal for a $6 million license, $14 million in implementation fees.
The company thus received the equivalent of a dilution-free capital round. But it got much more. It now had a story.
They were able to tell a much bigger story enabling them to be acquired by a larger firm, at a price that landed the hapless CEO as an “entrepreneur in residence” at a Boston VC.
The days of the franchise sales rep are mostly over because conventional transaction-minded sales managers are terrified by them. New ideas conflict with account-based marketing. They cannot be measured by CRM systems. They are not predictable for quarterly revenue forecasts.
Too many company B2B firms have marketing departments inhabited by mindless drones who crank out useless sales materials, whitepapers nobody reads, marketing programs just like the other guy and have a resistance to anything creative.
Venture-backed SaaS B2B firms are in the business of allocating up to 100% of their invested funds to sales and marketing to drive revenue toward an acquisition. That is how VCs get their dough back.
VCs hire the transaction-minded sales VP who sits at a CRM screen all day looking at small deal transaction trajectory. There is no time, no room for imagination.
There is no room for the big play.
The result is the stagnation one sees from hundreds of VC-backed B2B tech firms who raise endless sums yet never break out.
The argument is not that a franchise player would solve all these problems. Maybe. The argument is more that the franchise player would certainly “find the future” with new ideas and new ways of positioning the product for a good number of them.
Alas, that is not to be. Imagination is in short supply in transaction-driven firms. They cannot afford either the disruption from a franchise player or the threat that he or she might just find that elusive magic stone that launches the company into category leadership.
The franchise sales rep is alive and well, however, at startup B2B firms not funded by VCs.
These companies are not hamstrung by a transaction mindset or a braindead marketing department. They understand a technology’s future is often quite different from what its originators envisioned. They get it that the constant iteration between the prospect and sales rep may find that magic positioning.
Taking early VC money makes a company do stupid things fast. Finding the franchise rep, the person who finds the ideal product landing zone, one that nobody ever considered is a luxury only available today to startups who go it alone.
About The Author
Jay Valentine is the CEO of ContingencySales.com, bringing disruptive tech products to market without venture capital and the VP of Sales for portfolio company Cloud-Sliver.