How to Scale up sales team ?
The Big Mistakes Organizations Make When Scaling Their Sales Teams
A successful sales team is the life force for any successful business. As the sale’s performance increases there is a boost in morale which leads to even stronger performance.
But what happens when you and your team realize that the current size of the team needs to be increased? For instance, when the sales team is being overworked, discovering new markets, or a major shift in the organization (product launch, or big contract.) While an effective expansion plan is crucial to business growth, a bad call can lead to financial collapse.
In this post, we will look at some of the biggest mistakes organizations make in scaling their sales teams.
Hiring with Instinct Rather than Analytics
While automation tools are used to assess the existing sales force performance, some sales executives chose to ignore this technology when scaling the sales team. Instead of taking analytics and data into account, they go with their gut instinct in the hiring process. This mistake can result in many issues including, mismatched team culture or failure to increase production through the sales force expansion.
This may be from an executive felling rushed to scale up the sales force, but this can cause the company to lose valuable operational support resources for the rest the team. The lack of support to reps can result in downward trend in sales. On the other hand, a slow scaling process increases the vulnerability of profit regression. Executives need to understand that every sales hire has its own unique context. To avoid these mistakes, executives must rely on data analysis like potential sales revenue, operational support resources, product profitability, competitors’ position, and the cost for additional sales employees.
Misallocating the Sales Reps
A rapid expansion in the sales force can prove difficult to handle for a sales leader. Hiring too many people at the same time may result in chaos if not done properly. As a result, the executive may misallocate the members, thereby over-populating some territories, while under-populating others.
In both scenarios, often the new or less-experienced recruits prioritize their time on the low-hanging leads, for a quick sale. The issue with this is that they fail to generate high revenues and bring in lucrative clients with strong lifetime value.
Before scaling up your sales force, it is important to have a look at three factors. These include the sales force market potential, the existing accounts, your sales process time line, and the time needed to train each new hire. By studying these four factors each new sales recruit will have a balanced market and be able to successfully bring in new long-term clients.
Monitoring the Wrong Metrics
Another mistake that companies often commit during the scaling process is evaluating the wrong metrics. Many executives use only time or calendars to plan for when the new team member should be profitable to the company. Instead track each person’s actual progress compared to the average performance of the existing team at different stages (1st month, 1st quarter, etc.) to gain an understanding of how quickly they will become profitable.
Evaluating their target earnings this way will help you check their progress and whether they are building to or working at their full capacity. The information gathered at these stages will give you a clear picture of how each person is performing. The goal should be for the new hire to be hitting 80% of their production goals at six months. However, if they fail to hit this performance level at this time, you may either provide additional training, reevaluate their market, or find their replacement.
Misaligned Sales Compensation Plan
Compensation plans have a magical ability to guide the behavior of a sales force. It does not matter if you are eyeing a profitable share in the market, or trying to make your way in a new setting, sales compensation plans remain the driving force.
However, it is also the easiest tool to get wrong. To anyone who has worked in sales that statement is not surprising. Companies often make mistakes while designing sales compensation plan. Many times, they fail to identify the incentives that motivate their sales reps. And sometimes the compensation plan doesn’t change when the company changes its priorities. Other plans do not take into account the differences in market or customer base. While others focus on one-time gains which slows down the long-term growth rate.
However, three elements are crucial to an effective sales compensation plan, “simplicity, alignment, and immediacy”. These factors help the sales force to easily calculate their earnings, understand the link between the incentives and organizations’ goals, and provides immediate reward for their performance in their salary.
Misaligned Sales and Marketing Team
Coordination and trust across different departments are vital factors to the success of any business. However, sometimes the sales and marketing teams may not share a good rapport, especially if the company is missing its campaign targets as the teams are scaled. In some situations, the sales force may believe they have the hardest job in the organization, and that their role would be easier if the marketing department did more to help. While sometimes the marketing department thinks that their plan is great, but the sales force is not executing it to their fullest abilities.
To keep this from happening when scaling your sales team, you need to make sure that your sales and marketing teams are properly aligned and well-coordinated. You will want to quantify each teams’ targets and explain how they work together to accomplish the company’s growth. Schedule meetings together with both groups and discuss/identify any issues that may arise. While this is almost always taking place at the executive level, it needs to flow to the front-line marketers and sale teams as well. Also, before scaling up your sales force, ensure whether the marketing group can cater to the leads. If you discover that there may be an issue, think about scaling up the marketing team before the sales force.
Being in a situation where you need to scale up your sales force is a great place to be. It means that you have a great product and there is a strong demand for it in the market place. Just remember that while successfully scaling a sales team, can do wonders for a business, a bad call at it can be destructive and cause harm in the long-run. Thus, when scaling your sales force remember to analyze your data and build communication. Use data to uncover when and by how many people you need to grow your sales force, data to allocate each sales representatives market, data to monitor your new hires performance, and build a strong communication process between your marketing and sales teams.