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Why Sales-Led Growth Doesn't Work and What To Do About It

It would help to not rely on sales-led growth to scale your business.

Every week I'm amazed by the reasons for no / slow growth between £2m - £10m ARR; it often results from bad sales hires or attrition. Unbelievably really, what a BIG problem that creates.

You see this in the investor update:

Promised 40% growth, but they've had a tough year because;

They hired a US head of sales which turned out to be below par (they're still looking for a US head of sales).

2 (good) salespeople left

The problem? Most companies don't know how to build the infrastructure for scale-up. Some do, but most don't. And because of that, they rely on hiring salespeople. It's risky.

Here are six steps to get you up and running to de-risk sales-led growth:

Step 1: Focus on creating a unique POV, know your ideal audience profiles and target your audience's sub-segment.

The point of view of your positioning should be about motivating curiosity.

It should be about transferring your specific view and the significant challenges it solves.

If you can't position your product/ service with a unique POV, you don't have a good foundation for building awareness and demand.

Step 2: Salespeople don't create demand, so hire into marketing or product

Once you know your positioning and audience and have a decent run-rate of ARR, it's time to scale. You go out and hire salespeople.

Please don't do this.

Salespeople are not good at creating demand.

I know you're excited and believe salespeople will deliver on building a market, but they won't. It would be best if you started investing in the infrastructure of your GTM. This infrastructure begins with creating content in the first instance or product marketing to improve product positioning with the message to the market. Or product to engineering to help create a better product.

The marketing or hybrid product hire needs to focus on how to build an effective marketing strategy that creates brand awareness and the first stage of your demand funnel.

Step 3: Create a system for your revenue funnel

Once you have in place the marketing basics, it's time to create the actual customer journey and lifecycle for driving new business.

Start with how you convert brand awareness into lead flow/ engagement, and plan what resources you need to convert or engage further down the funnel. I.e. do you need more content, what content is required, top, middle, bottom, what channels are you optimising?

At this point, you should be building the architecture and testing heavily on how to make a customer journey.

Step 4: Build out your resource structure

Once the first three steps are completed, the most complicated parts are done. And often it's hard sometimes to see the impact on the lead flow. Because this is not demand generation, it's the foundations of the building of your house; you don't see the foundations.

Now it's time to build out your resource structure.

At this point, you decide on SDR resources to help conversion pathways, demand generation marketers to build the demand creation process or product marketing to help develop the PLG model or refine your message.

Step 5: If the systems start to work, hire sales-people

You know, feel more confident there is a process for demand creation.

You can now look to hire salespeople or scale the sales function (you may have a few hires or still be doing founder-led selling).

The benefit of hiring at this point is you can feel better that the top-of-funnel system will be independent of a good/poor sales hire.

Step 6: Importantly, make sure you hire the right people

Ok, this is a no-brainer.

But again, most people get this wrong. You want resources quickly, you hire the wrong people, and it's a problem six months later.

Invest upfront in getting the right hires for the sales function.

A few ways:

- Use modern assessment tools (not old-school psychometrics)
- When interviewing, use real-world scenarios, i.e. a favourite is to do a pretend sales forecast meeting and see how they'd operate week-to-week
- Ask candidates to send an email pitching your product/service, or a cold email
- At the interview stage, ask them to do your company pitch on a whiteboard
- Ask for at least two references from former managers (people don't ask for references!)
- Use your networks to gain feedback on the candidate
- Put your own internal 'Hiring Playbook' in place, looking at competencies, attributes and behaviours (I have an example if you want to see one).
- A quick tip: The great salespeople I have met are intelligent, good listeners, thoughtful, curious, motivated to be an expert in their domain, and often introverted. Not the typical sales profile.

If you follow these stops, you'll de-risk the result. Still, lots of execution is needed but an alternate way of thinking.

In 2023, it's not optional to think harder about the infrastructure for scale-up; it's mandatory because hiring salespeople won't work. But saying that, if you want to avoid investing in the infrastructure, follow step 6 and at least hire 'better' salespeople.

I hope that helps.

Whenever you're ready, there are three ways I can help you:

(1) DUE DILIGENCE FOR INVESTORS & CEOs: A bespoke framework and capability model 'DEMAND KARMA' that delivers DD services to investors, VC firms and CEOs.

(2) ADVISORY: Retained advisory at funded scale-ups. A simple monthly fee. Helping CEOs build a scalable marketing machine. (Booked out until December)

(3) STRATEGY COACHING: Book time on my calendar to work through a standalone project or to get answers to your most pressing marketing strategy and execution questions.

If you're interested, let's jump on a call to see if you're a good fit.

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