Every Start-up hits the point where they move from having a couple of sales people to building a sales team. This might be because sales are taking off or most-likely because you took some funding and were told you had to scale your Demand Generation and Sales.
If only, it was as simple as hiring more sales people.
Here is some quick and simple advice to help you avoid some common mistakes in building a sales team based on the questions I get most often.
Understand your target customers. Who is buying your product today and is who is your target customer for the next 18 months? So much money is wasted because people either hire too senior or too junior of sales people to tackle the challenges of selling to the clients they can close.
Is your sale, transactional and focused on the SMB market or is your solution focused on Enterprise customers? These are completely different sales and need completely different people. The clearer you are, the less mistakes you will make.
Do you have a sales leader? You can have 3,4,5 sales people without a true sales leader but if you want to scale a team, you have to hire a professional sales manager. Alignment, again, is key but they also need to have a sales process they can use to develop the sales people into a team.
They will also help you sniff through a good story and get the right people who can actually do the job.
If you don’t have a sales leader, pay one you know at another company and have them come and help you hire sales people until you find one.
You will want a simple comp plan…. My Advice…. For One time purchases go with straight percentage and for SAAS, go with 1 to 2X monthly revenue. Your sales leader will build on accelerators. Remember, the plan should drive the outcome you want.
Most likely, you will end up on Salesforce eventually but by no means do you have to start there as it can be expensive and not necessary until you start integrating other areas of the business. You do need a sales funnel and visibility. Start running your sales team from dashboards as quickly as you can to build that culture from the beginning.
Don’t hire dramatically faster than you can scale Demand Gen.
You want to build in the culture of prospecting from the beginning but you do not want a team where at least 30% of the leads are not uncovered through Marketing. If you have more sales people than leads, you are hiring too fast and need to really focus on scaling Demand Gen to avoid wasting money.
If you have too much Demand Gen, your sales team will get fat and will never prospect. Sounds funny to have too much Demand Gen, but if your sales people can make their number based on incoming leads, you need to hire more sales people. Otherwise, this will have cultural ramifications for a long time. Trust me, if there is a limited number of leads, the sales team will work each one of them like gold
Here is a rule I use…
I want the Sales team to uncover at least 50% of their own opportunities. With all of the tools out there from LinkedIn Sales Navigator, to ClearBit Connect you do not have to rely on cold-calling but you do need to prospect.
Hope this helps. We will cover Direct or Channel Sales at a different Time.
Let me know the tools you find most valuable and how I can help. Let’s build great teams together.