More salespeople equal more sales, right? Wrong. Scaling your sales team is crucial to growing a healthy business. Do it at the right time, and your company will grow exponentially. Do it at the wrong time, and your company could shutter within six months.
Don’t just hire with your gut.
Take a strategic approach to scaling your sales team, and make smart hiring decisions that will benefit your organization for years to come.
Check out these 10 mistakes to avoid when scaling your sales organization. A few of them might surprise you, like when I tell you to spend less time forecasting and managing your pipeline …
If your sales team is growing fast, you may accidentally misallocate staff or overpopulate territories. Before hiring another salesperson, take a look at your existing reps’ numbers.
Often, less-experienced reps will prioritize low-hanging prospects that churn faster or don’t yield enough revenue over their customer lifetime. Make sure all of your reps are pulling their weight and bringing in clients that are your ideal customer and not expected to churn quickly or give you inflated numbers. That’s an easy way to slip into accordion growth which is bad for business and morale.
Before adding headcount to a territory team, look at three things: The territory potential, existing accounts, and workload. Based on this information, make an educated decision about if and whom you should hire. For example, if your reps are working X hours per week and hitting Y percent of quota, you may need to hire Z people.
2) Hiring out of desperation
By the time you’ve determined you need headcount, received budgetary approval, posted a job req, and narrowed the candidates down to the top three, a great deal of time has passed and your team is probably hurting.
That’s still not a good reason to hire someone you’re not completely sold on. Have a firm rubric you adhere to for hiring. If you want someone with a background in SaaS, don’t settle for someone who thinks SaaS is an attitude. When you start making those hires, you dilute the talent and results of your sales organization.
Keep the quality of your hires high -- even if it hurts -- and your team and business will benefit in the long term. It’s also important to consistently recruit and keep in contact with great candidates so that you can hire quickly when a position opens.
3) Providing insufficient training
If you’re not investing in a comprehensive training program for new reps, you’re not getting the most from them. In small or fast-growing sales teams, it’s easy to onboard new hires with one day of orientation and a few weeks of shadowing. But without a uniform training program, how can you expect the same quality of work from each of your reps?
Implement an in-depth and consistent training program that each new hire must complete. This sets a high bar that each salesperson is aware of and expected to meet.
Before hiring to fill a gap, take a look at your salespeople and decide whether training or coaching could help them perform at a higher level. If you can make existing reps more efficient, invest there first before expanding your team.
4) Using out-of-date compensation plans
A misaligned compensation plan can affect the direction and productivity of your sales team. Regularly check your plan and ensure it aligns with quarterly business goals.
If you’re expanding to a new territory and prospecting is a big priority for the quarter, compensate your reps accordingly. Is converting those prospects into new business the goal next quarter? Shift the bonus structure to reflect that.
For example, if you want to encourage prospecting, you might offer $100 to every rep who gives more than 10 demos in a week.
This ensures reps are being rewarded for the right work. It also makes them more efficient in pushing the business toward meeting the right goals.
5) Tracking the wrong metrics
To determine if it’s time to hire, make sure you’re evaluating the right metrics. Start by tracking your reps’ base compensation. Then look at their variable compensation and the rate at which they meet their quota. Finally, review their average deal size and churn.
By looking at their on-target earnings, you’ll be able to determine whether your reps are working at capacity. This gives you insight into whether it’s time to hire someone new and, if so, what type of role to recruit for.
Your salespeople should be turning a profit within six months to a year of their hire date. If they’re not, it might be time to replace them or invest in training.
6) Ignoring role pollution
It’s easy to overlook the administrative needs of a fast-growing team. The result is reps spending more time on data entry and less time actually selling.
To avoid polluting your senior reps’ jobs, consider making your next hire a BDR or administrative assistant instead of the sales manager you had on deck. This allows your reps to do what they do best. It’s also a cheaper hire and could alleviate the strain your senior reps have been feeling.
Alternatively, make sure roles aren’t being diluted. If you have reps that aren’t functioning at full capacity, see if they can take on more responsibility before making another hire. If they can’t meet the numbers you need from them, it might be time to replace them instead of hiring additional headcount.
7) Not aligning with Marketing
Before hiring three more salespeople, make sure your marketing team can deliver enough leads. Your sales team might be working at capacity, but so might your marketing team.
Work with them to understand whether Marketing can meet the lead demand that an influx of salespeople will create. If they can’t bring in more leads, consider scaling their team before adding to your own.
8) Spending too much time forecasting
You probably spend a lot of time forecasting and managing the pipeline for your organization. But are you investing enough in your team? If you’re not dedicating at least a few hours each week to coaching your team, you’re selling your sales organization and individual contributors short.
Set up weekly or monthly check-ins, build a mentorship program, or implement a quarterly training day. If your reps aren’t getting better, it will affect growth potential down the line.
If you’re investing time and resources into making your employees better, you might be able to accomplish more without expanding your team.
9) Over-hiring executive talent
If you just got a round of funding, or are in the middle of a high-growth stage, it’s tempting to recruit high-powered executive talent. This can be a smart move for your company … if you have the right people in place to do the actual selling.
If you already have a scalable and efficient sales process in place, it might be better to hire reps to implement your sales strategy. If a strategic roadmap or extensive sales processes are needed, maybe that Fortune 500 hire is the way to go.
You don’t want to make an expensive hire that you don’t have the sales team and, therefore, the revenue to support.
10) Being afraid to trim fat
If you scale strategically, hopefully you won’t need to conduct large-scale layoffs. But making periodic cuts is a natural, healthy part of growing a business. The skills you needed when your team was five people are probably not the same skills your team of fifty need.
Don’t be afraid to take the pulse of your sales team, and be honest about whether you need to part with certain reps to make room for hires that will take your organization to the next level.
Make the right hires at the right time, and avoid these mistakes along the way. Your sales team's health -- and therefore your profits -- will thank you.
Originally published Sep 19, 2017 7:30:00 AM, updated September 19 2017