3 things to consider when scaling commercial teams
Scaling the commercial team is always a difficult and potentially high-risk task for many organisations, even more so for SMEs and startups.
Leaving aside the recruitment challenge (something I’ll post about another time), how your sales and biz-dev people perform early in their role is critical.
In many organisations, particularly in SMEs, new sales people just do not last long enough.
They burn and churn far too quickly.
This is expensive in so many ways when you consider recruitment costs, base salary and the opportunity costs of under-performance.
The expectation is that you’ll hire a sure-fire VP of Sales who will just slot in and start closing deals and hitting quota with little effort.
But, unless you are Google or the next hot Unicorn startup (and even then I have my doubts) you need to accept something – it rarely, if ever, happens.
I don’t believe that the issue is because there are only a very few great biz-dev people out there.
The problem is that many organisations don’t have a robust process to on-board and manage new commercial people until they are productive.
There are many factors that contribute to the success of any new sales person. Forget about your product, company positioning or branding – I’m talking about internal factors that can literally make or break your new hire.
In my experience this is a major issue within SMEs and startups.
Plus, CEOs always under-estimate how long it will take for a new person to get bedded in.
If you’re not already measuring metrics like pipeline volume, pipeline velocity, close-ratios etc, how can you really know what’s a realistic expectation for a new sales person?
This can result in over-selling the position during the recruitment process, leading to rapid disappointment from the sales person once their feet are under the desk.
“But, our top sales person earns £X,000? If they’re good enough they can do the same, right?.”
It doesn’t work like that.
Unrealistic OTEs, lack of leads and support, poor CRM data, all of this can demotivate and result in an early exit before any meaningful traction… typically after any claw-back period for the recruitment fee has ended.
So, what can you do to avoid a painful (and costly) cycle of burn and churn?
Here are 3 things to consider before you hire:
1) Avoid targets that are a “finger in the air”
How are they going to hit their targets?
Rather than just breaking down the number that you want and expecting it to be hit, you need to link any target back to measurable inputs such as number of leads, average sales cycle, average deal value, etc.
Make sure you factor in a period to get up to speed with the market and proposition, as well as general orientation as per any new employee.
As a guide, be more cautious than optimistic. Increase the ramp-up time and decrease the targets.
Does that make you think twice about how expensive a new sales person will be? Good, because they are.
They say success builds success and therefore you are better to have a new sales person hit a lower target and build, rather than continually miss something that’s not achievable.
With the latter approach (assuming they don’t give up and leave) you are simply showing that targets don’t mean anything. That’s a bad habit to form.
2) Think about your existing team
If they will be joining an existing sales team, where and how will they fit in?
In mature teams this is seen as less of an issue as the new person typically inherits the accounts of the outgoing sales person. But, instead, consider whether this is an opportunity to re-organise allocation of accounts, territories and leads.
Be mindful of whether the current setup contributed to the outgoing sales person, particularly if they left through under-performance.
If you’re a fast-growing company then you will need to decide whether the new person can survive purely on new business, or whether you need to allocate leads/accounts from the rest of the team.
This can be a tricky one, but in high-growth companies it’s not unusual for sales people to be creaming off the best accounts and neglecting the rest.
This goes back to having a clear idea of your sales processes and measuring activity to make a judgement. If you rely on asking your sales people they will naturally want to offload their “dogs”.
Another aspect about the existing team is to consider the culture.
Is it open and supportive? Will there be extensive sharing of best practice?
Or is it closed and competitive? Will the new salesperson need to find their own way “like we all did”?
Whichever, thinking about the culture will inform you about how much support is needed and directly influence expectations of ramp-up time.
3) Focus on the “Quality” as well as “Quantity”
Many companies focus on the numbers, such as dials, decision-maker conversations (DMCs), opportunities in the pipeline, proposals, etc, etc.
After all, sales is a numbers game, right?
But early on, too much focus on just the numbers will not tell you the whole picture. Rather, you need to keep an eye on the subjective side.
Think about the quality of conversations with prospects rather than just the quantity.
This is the coaching side of sales management.
Regular one-to-ones – talking through how conversations have gone with prospects, when they are planning to next speak and what they are going to ask – are all good ways to uncover how they are bedding into the role beyond the pure numbers.
This approach will catch early problems and identify areas that need development.
The purpose here is to make sure that they have the support they need and can ramp-up as fast as possible to get to revenue.
When working with clients who are expanding their sales team, usually after some expensive mis-hires, we typically start with a Revenue Canvas session, to understand the current metrics, team make-up and resources available.
It’s a process that never fails to uncover areas that have not been considered by our clients.
Using these insights you can develop more robust selection and on-boarding processes, as well as identify new solutions to support the future success of your whole sales team
Originally published on LinkedIn June 2018