I was prompted to write this by a piece I saw on DIGIT recently. It covered comments made by tech investor, Dan Halliday, where he talked about building a Scottish technology business and touched on a subject that has long been something I have pondered – it’s that I call the “Scottish Sales Problem”.
Having worked in tech sales for over 25 years, in direct B2B sales roles, built/managed teams and all over EMEA, I feel well-positioned to understand the problem and (I hope) offer insights that may help Scottish technology business sector, which is something I’m passionate about.
So, what is the problem?
Let’s first look at the world from a sales person’s eyes, starting with a few truths about me and my brethren. Successful salespeople are ambitious, greedy and work efficiently. The good ones choose their next employer, it’s rarely the other way around. These three traits mean they are looking for a company that has a compelling portfolio of products and/or services, and operate where there are most prospects who want to buy them.
This is why so many Scottish salespeople take roles that focus them on the wider UK. There are plenty of great tech companies up here and many cut their teeth in Scotland but as soon as they are proven, move to operate in and around London. Why? Because there are a lot more prospects to sell to. If you ever catch one of the many early flights from Glasgow or Edinburgh then you will see me and many of my fellow salespeople.
The salespeople that stay operating in Scotland are either young and not proven (yet), much older and have made enough money to work for less and enjoy the lifestyle, or have never proven they have what it takes to take a bigger role. Of course, there are exceptions (I know a few of them) and it is generally family commitments that keep them up here, but they are rare and highly sought after. I really hope this does not cause offence, none is meant.
Now let’s look at it from the perspective of a Scottish tech business (STB). I have worked with/for and know many owners of STBs, and I hear the same things time and time again: “We can’t afford to pay London salary rates”, “I’m not having a salesperson earn more than me”, “we have tried to crack London and it didn’t work”.
My message to these business owners is simple – you need a clear strategy for your company and have two options:
- Be a Scottish business serving Scottish customers, or
- Be a UK-wide/global business whose head office is in Scotland.
Next, you need to decide on your own personal goal. Again, you have two options:
- You want a lifestyle business that pays you and your fellow directors a good living
- You are building the business to sell it in the next 5-10 years
Be honest with yourself. The combination of answers to these two questions will tell you which type of salesperson you need to hire. For example:
- Strategy is 1 and personal goal is 1 = hire Scottish based salespeople on Scottish salaries or (as many do), be the salesperson yourself
- Strategy is 1 and personal goal is 2 = you need to hire Scottish based salespeople but be prepared to pay London salaries otherwise, you simply won’t get them and won’t hit the aggressive growth you need (this is a high risk/reward route)
- Strategy is 2 and personal goal is 1 = you need to hire salespeople based in the regions you operate and pay the salary rate according to the region (London salaries for anyone who needs to sell in London)
- Strategy is 2 and personal goal is 2 = you need to pay all salespeople on London salaries
I’m sure there will be lots of people offended by this and arguing there are other ways, but if they were truly honest with themselves then they would agree (through gritted teeth).
As an STB owner if your personal goal is 2 then you need to plan and ensure your financial budget can support the commissions you need to pay, but remember, you own the business. Yes, a salesperson might have a bumper year and take home more than you but think about the bigger picture and the value of your shares. This is what all the owners of the tech startups in the US do.
Why should you be any different?
Remember, good salespeople will often seek you out and they will certainly know about your strategy and personal goal. If you have a reputation for not paying good commission,
then they will already know that.
From my perspective, I think I have worked for every combination of the above. I also spent a number of years trying to sell just in Scotland and last year came back to the inevitable conclusion that I needed to move back to a direct sales role for a London based company.
I’m now back doing what I love and making a lot more money. This is just a fact of our industry. Ironically, I’m now working from home for the foreseeable future.