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How to Scale an Efficient, Low-Cost Sales Team

 

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Last year, my company hired a seasoned sales manager and tripled our sales team. Only a couple quarters and a fraction of a degree pivot later, we downsized and restructured the bloated department. As it turns out, we had made a classic mistake.

According to Aaron Ross, the former Salesforce executive and founder of Predictable Revenue, Inc., there are two kinds of sales teams: builders and growers. Builders create procedures and solve problems; growers scale best practices and multiply results. Our error was that we hired a team of growers without first answering key strategy and resources questions that are best handled by builders.

What were those questions? For starters, we hadn’t researched or ordered any scalable marketing software, the training materials we’d been using didn’t produce consistent results for the sales pros, and we hadn’t determined which markets would be more profitable to target. Solving all of those problems would take a great deal of research, retraining and trial and error. When you add recruiting, training and ballooned staff salaries to that list, it’s a recipe for lost productivity and negative ROI. It’s far better to overcome the bulk of your company’s problems using a smaller, low-cost builder team first.

Here are four changes we made to convert our growers team to a builders team:

  1. Go from base pay plus to 100 percent commission.Without the right tools and techniques, the sales team couldn’t produce results to cover their own labor costs. Yet, testing to find better tools similarly hurt the sales team’s ROI. In order to free up the budget for innovation and experimentation, we had to cut the cost of labor. Needless to say, we lost the majority of our sales team (25 reps) upon announcing this change. However, the five who stayed were our top-performing sales reps. They were the ones who performed well with the under-resourced, ever-evolving conditions of the department — the builders we needed. Now, we continue to gamble with purchasing new tools and testing out new strategies but with a much lower wage.
  2. Cut the size of teamand slow down hiring. With base pay eliminated, we had five senior salespeople. We’ve only grown the number to 10 in the six months since. The problem with mass hiring during a building phase is that training is routinely made obsolete. The learning curve becomes a learning wave similarly causing dips in productivity. Imagine the frustration of a salesperson who has just gotten the hang of the job and now has to learn a new tool or procedure. Slowing down the hiring process allows teams to spend less time training others and more time retraining one another.
  3. Focus on mentorship as opposed to mass training.We also parted ways with our executive level sales lead. After all, high salaries require a comparable return on investment, something that he just didn’t have the staff or tools to achieve. The reduction in hiring and training alone left him with a lot less to do. Plus, the mass trainings themselves made it difficult to ensure that everyone got the memo and also internalized the justification for new tactics. Under the old training method, there were always stragglers who didn’t know which page the rest of the team was on. New hires would learn bad habits from the more senior reps and when results fluctuated, we could never distinguish the exact cause. Was it the new procedure? Some exceptional new hires? Great training kicking in or ineffectual tactics being ignored? Now, senior staff people mentor their less experienced counterparts, and the average time between onboarding and first sale has been reduced by a full week.
  4. Choose collaboration as opposed to top-down leadership.Another benefit of mentorship is that idea generation can be more multilateral. The team is now so small that every member can join substantive strategy sessions, get their questions answered and understand the thought process behind every decision. That causes them to internalize the new information more deeply. More importantly, members come up with ideas of their own, which they can disseminate and test just as effectively. With only a third of the original sales team, TalkLocal’s new builder force delivers only 50 percent fewer sales than the larger team at its peak, a figure that just last month shows signs of decreasing. Meanwhile, we’ve saved $92 per sale — money that is being reinvested into projects like our drip marketing campaign, testing LinkedIn advertising, the development of new landing pages and partnerships that will deliver added value for our clients.

Of course, once the company has a replicable sales model in place, we’ll need all the manpower we can get to fuel growth. We’ll likely revert to a more competitive pay structure, create a more scalable training process, and bring on visionary executive-level leadership to maximize the department’s potential.

For now, we’re thankful for the mutually supportive, collaborative and self-motivated sales pioneers who are laying the groundwork for a scalable path to success. Who needs Danica Patrick in the Model T engineering team? As much as we look forward to growth, we’re thrilled to be in a time to build.

 


 

 

BusinessCollective, launched in partnership with Citi, is a virtual mentorship program powered by North America’s most ambitious young thought leaders, entrepreneurs, executives and small business owners.

 

About the author: Manpreet Singh

Manpreet Singh is Founder and President of Seva Call, a local startup that helps consumers find high quality local professionals in minutes.

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