Optimize Sales for Scale
/Scaling a sales team is one of the most challenging aspects of running a company. Every founder knows that, product aside, a sales team can make or break a business. Scale too quickly and suffer from quality issues. Scale too slowly and lose out on potential revenue.
Below are a few elements that should kept in consideration to ensure that the sales cycle and process remain intact while starting or scaling any sales team.
Goals
In terms of hiring the best there are a number of personalities in the sales world that often fit different requirements. Its crucial to understand the benefits and pitfalls of each sales personality so that the individual is aligned not only to the organizational objectives but the team’s priorities as well. Having someone who conflicts the team mindset does not result in the best outcome for any sales department.
A good way to conclude who would be a good fit would be to consider what the sales cycle looks like to determine what facet of the team needs expansion – Hunters, Closers or Farmers. Analyzing the sales process will help identify existing and potential bottlenecks that can be resolved by expanding the right part of the sales team.
Hunters are typically resilient innovators with a strong sense of optimism, not willing to take no for an answer. Farmers are typically more detail oriented, great team players and good listeners - all of which make them great at creating long lasting relationships with clients. Closers are more result oriented, making them more decisive and direct out of the three characteristics. Any team needs to have a balance of the three personalities in order to ensure that every aspect of your client and sales cycle is accounted for to maximize deals closed and incoming revenues.
Structure
Defining a team structure will help determine the seniority of new hires – bring on-board a lot of executive talent can make teams top-heavy, while the lack of executive talent could prevent teams from getting the direction they need. What structure best matches your industry and sales cycle? Island, Assembly Line or Pods? There are pros and cons to all three but choose the one that is best matched to your company and your team.
Island team structures are more suited towards small companies where every salesperson is responsible for every aspect of the sales themselves, reporting into one individual, most often the company founder/ owner. Assembly Lines, on the other hand, has teams responsible for every stage of the process. The flow, for most companies, is - sales development and qualification (SDRs and BDRs) to closers (Account Executives) and then finally to Customer Success teams, comprising of farmers. Pods, operate an individual assembly lines, independent of one another. This modular system allows companies to transpose pods between departments and business units, keeping the process far more fluid as compared to Assembly Lines.
Culture
Companies that expand and hire too quickly often dilute their culture that teams have worked so hard to establish. The same goes for a sales team – the sales culture defines their motivation and hunger to close deals. Values define culture and is often the foundation of all skills. Collaboration, competition, communication, trust, transparency are some traits that make a sales team cohesive; eventually permeating across an organization.
Sales Cultures can be nurtured by instilling a sense of accountability and trust through a team, largely by setting clear goals and expectations. Positive sales cultures are also those which encourage learning and development, allowing members to enhance their skills while creating a motivational environment that focuses on positive change. Most importantly, it’s important to celebrate the small wins and discuss the failures in order to encourage the involvement of everyone in the team. Lastly, every member of a sales team should have a clear view of the big picture and work towards it together through their daily routines.
Role Dilution
Knowing when to add new hires prevents the dilution of responsibilities among your existing team. The last thing you would want to do is to crowd an area of focus with too many sales people because new areas are not mapped out yet. Bringing on a new hire at the exact time leads increase rarely happens, resulting in some overlap – but it can be minimized. Overlaps can result in an unhappy sales team which can impact productivity, highlighting the importance of planning team expansion.
Study sales data and evaluate if current deals can be handled better by the existing team or if adding new sales people can improve the closing cycle.
Training & Development
Getting a team well-versed with a product does not necessarily translate into increased sales. While an initial sales team knows the product inside-out, it can be challenging to get new members as well-versed as they are on your product. Training goes beyond studying the sales deck and feature list, it helps getting teams together periodically to share personal sales experiences and customer feedback to constantly improve how your product is being sold.
Ensure that the team is getting the hands-on experience to truly demonstrate the value to potential customers.
Data
Growing a team is going to effect how you’re tracking movement in the pipeline. Utilizing sales metrics will identify areas that need attention or have improved since adding to your team. This can either point towards specific units within a team or particular members of a team who are bringing in increased revenue. Metrics like average deal value, average close time and churn rate can help you build up your long-term demand and revenues. Remember to focus on metrics that make the best sense for your industry and company.
Further, there are numerous intelligence tools available that can help your team perform to optimum. These intelligence tools provide much needed perspective on a target’s business and daily activities. Equipping sales team with as much data as possible ensures that they are maintaining relevance at scale, particularly due to the number of steps and stakeholders involved a complex sale of today.
Compensation
Sales compensation plans drives team performance and keep the face of a company highly motivated to consistently perform and deliver results. Compensation for sales teams should be tied into experience, role on the team, impact of a sale as well as duration and complexity of sales cycles. There are several external factors that also come into play such as budgets, available resources, competition pay scales as well as organizational goals.
Compensation for sales teams consists of a fixed and a variable. The variable has a few components and is tied towards a sales quota assigned to a member’s performance. On Target Earnings, or OTE, is the combined amount of both the fixed and variable amount due when a member has met their sales target. There are also other facets such as Sales Accelerators, or an exponential earning rate for when sales representatives has exceeded their quota while the Sales Decelerator is used to calculate compensation for members not meeting their targets. Clawbacks account for churn when new clients leave the business before meeting pre-specified benchmark. This can often be used to ensure that sales representatives are only bringing on business that are suited for long term relationships. Rather just absolute sales numbers, commission can also be tied into territories, volumes as well as profit margins. However, it should be acknowledged that overly complex sales compensation plans work against enhanced productivity and results.
Automation
Expanding a sales team needs to be done in tandem with implementing sales tools and platforms that reduce the time spent by sales teams performing repeatable tasks. Sales automation tools not only save time but also the costs associated with manual data entry, tracking follow-ups as well as guided selling systems. The aggregation and analysis of sales data provides enhanced visibility into the sales journey, allowing for accurate and real-time customer information. Further, arming your sales team with automation creates a level playing field, enabling them to compete on a much larger scale than before by letting them on the core element of sales - human interaction.
CRM platforms gather and maintain contact information while also scheduling follow-ups where needed. Some platforms allow sales teams to input custom pre-populated quotes by tying directly into an organizational database. Enhanced platforms provide priority levels, linked to prospect size and likelihood to convert. Other complex CRMs require a steep learning curve but also integrate marketing automation into the mix.
Team Pulse
Listen to your feet on the ground as they interact with the market and customer directly. The feedback from sales team is crucial to giving the customer what they want and need, translating into accelerated growth. Deal with issues, either team or sales related, as quickly as they pop up to make sure processes run smoothly. Another added element of tracking team pulses is to break down silos and ensure cross team collaboration and interaction. Pulse checks need to quick and easy to conduct with no repercussions to negative feedback as insightful information provides a unique lens into potential improvement in productivity and revenues. Breakout sessions and one-on-one sessions are the ideal settings to increase interaction, engagement and transparency.
Remember that the sales team is the heart of the organization and very closely tied to everyone’s future.