Mistakes to Avoid When Expanding Your Sales Department | Sales
These days I remembered something I’ve read back in 2006 and somehow kept in the back of mind all this time: ‘’Everyone wants to be the VP of marketing and do the cool stuff like advertising and promotion. This is fine if your product is already being bought. [..] For selling to work, you need face-to-face, personalized and intense contact. Advertising can’t do this, so for most organizations the best lead-generation methods are seminars, presentations by company executives and schmoozing‘’ said chief-evangelist and Silicon Valley venture capitalist, Guy Kawasaki in a blog post that year.
You can chalk that down to perennial truths, as it still holds today. The whole ecosystem of a business – independent of industry or operational model – and its sustainability relies on sales, the proverbial (money) rainmaking machine. That’s particularly relevant for start-ups and other small businesses which are very cash flow sensitive and depend on external financing, such as venture capital or a small business loan, to stay afloat. Therefore putting together a sales dream team is definitely key to keep everything working.
As milestones are reached and the business starts to grow, so does the sales department. Make sure you spare yourself the wasted time and frustration of multiple attempts, by paying attention to some of the major ‘no-no’– s of expanding sales.
Bypassing Sales Analytics & Data
We have Big Data to thank for the fact that CRM and automation tools have become commonplace. They are extremely helpful when evaluating sales dept. performance and the same goes for sales force sizing, despite this being a frequently ignored practice. It’s concrete data (not gut instincts, or budget limits) that should take precedence when determining the right size of your sales team. If sales force size and business growth objectives are mismatched, the success rate of the expansion will drop like a lead balloon. Always analyze factors like cost for sales employees, sales revenue, segment & product profitability, area coverage and competitors’ performance to correctly size your sales team(s).
Staff misallocation may occur if the sales team grows too fast, that’s when you end up with crowded territories. To avoid that, before you decide to add headcount to a specific sales team, assess the territory’s potential, the pool of existing accounts and the current workload. Coverall these three strategic bases and you’ll be able to balance the reps’ workloads and earning opportunities while making sure that they capitalize on lucrative leads (not ‘low-hanging fruit’).
Diminishing the Impact of Role Pollution (or Failure to Recognize It All together)
If more people join the team, administrative support is bound to spread too thin. Inadvertently or not, this is when salespeople start to pick up additional, non-selling activities that are role diluting, ineffective and time-consuming. Why hire someone to pitch in with Sales and then have them filling expense reports or tracking incentives instead? It’s a good business practice to scale up administrative and customer service teams as you scale up Sales; by doing so you ensure selling productivity and seamless day-to-day operations.
Offering Insufficient Training
It might seem redundant to say it, but, unless you invest in a solid training program (go through both product and sales methodology) for new reps, you’re not getting the most of their potential.
You might think it’s easier and faster to choose methods such as one-day orientation or time-limited shadowing. It might work if we’re talking about senior positions but, can you really expect the same quality of work from every sales reps (especially newbies) in absence of a uniform training regimen?
If that’s not an option for the moment, you could alternatively focus on making existent sales reps more productive before enlarging the team.
Compensation Plans are Outdated or Misaligned
Compensation plans are undoubtedly the most powerful tool a company can use to boost its sales force motivation and actions. It’s especially when business growth is aimed at that leaders should consider the incentives that drive sales reps. Misaligned compensation plans affect both the direction and productivity of your sales team and fuel job-related frustration that chip away at loyalty. There are 3 characteristics that make a compensation plan (expanding companies) effective:
- Simplicity – the sales reps can accurately calculate their performance based (direct) earnings
- Alignment – the connection between incentives and company priorities is clear and enforced
- Immediacy – a sales rep’s salary promptly reflects success or failure to reach sales objectives
Scaling up triggers changes in all aspects of a business; it’s as simple as that! But, in order to set themselves up for successful expansions, businesses need to learn how to leverage sales potential and consistency first.