Throughout the 1990s and up to 2008, LexJet, a 165-employee, $68 million seller of inkjet printers and related supplies and services, enjoyed double-digit growth. But when the recession hit, the company discovered a fundamental flaw in its sales strategy: Salespeople had been "resting on their laurels," says CEO Art Lambert. They were selling more products to current customers rather than doing the harder work of landing new ones.
When the economy tanked and some of those customers began to cut back orders, LexJet's growth rate stalled. "Our complacency kicked us in the butt," Lambert says.
The company responded by organizing its sales force into "pods" of four people each, with each pod empowered to set its own quota and make all relevant decisions around prices and contract terms. That new autonomy galvanized the salespeople, and LexJet returned to its prerecession growth rate.
Your sales force may not need an overhaul, but if the idea of having a well-developed sales pipeline seems like a pipe dream, it's time to rectify that situation. "Companies often think the key to that is to just hire more salespeople," says J.R. Samples, founder of sales consultancy Accountability Partners. "But too often they rush into that without having a clear understanding of underlying needs," which often have less to do with the number of salespeople in the field than with how they are trained, motivated, and deployed.
Window on your world
Focusing on how customers prefer to buy can ultimately help you see how many salespeople you need and how best to use them. When Jeff Erramouspe joined data recovery firm Spanning three years ago as chief revenue officer, he decided that the best growth strategy was to pursue large companies more aggressively. Instead of immediately staffing up, however, he hired a single person to follow up with every prospect, large or small, that had requested a free 14-day trial. That move alone doubled sales within 60 days.
More important, it gave the company better insight into how to respond to different kinds of customers. Smaller companies, for example, wanted short, clear explanations of the product's benefits so that a single decision maker could quickly say yea or nay. Larger companies had longer approval cycles, with more parties involved, which required a different sales skill set.
Having learned that, Spanning divided its customers by size, and as it hired more salespeople, it trained them to specialize on that basis.
Help your helpers
Companies of all sizes often use independent reps to augment their sales efforts, another area ripe for improvement. TerraSource Global, a St. Louis-based manufacturer of material-handling and processing equipment used in the mining and forest industries, among others, has effectively segmented its reps by industry. "We used to have reps sell everything [we make] in their geographic area," says Doug Sublett, VP of power and mining. "But if a rep is calling on power companies 90 percent of the time, he won't want to call on a mining concern. We want to maximize his willingness to make cold calls for us. His success and ours are intertwined."
Getting the People Who Get to Yes
Even with a clear picture of the role (or roles) you have in mind for your sales force, finding the right people is not easy. Three tips from leaders who have been there:
1. Hire two at a time. Spanning's Erramouspe likes to hire salespeople in pairs. "You spend the same energy training one sales rep as two," he says, "and it promotes healthy competition from the start." It's also a hedge against high turnover: "You don't want to spend all that effort and be back where you started."
2. Find people who've sold similarly priced products. "It can be hard for a rep selling a $20,000 product or service to sell one at $400,000," says Accountability Partners' Samples, "because the level of the decision maker is probably different, and the sales cycle may have more steps and require specific skills."
3. Put them to the test. Loic Moisand, CEO of social media strategy firm Synthesio, doesn't spend much time asking candidates about their experience, because "people are usually very good at selling themselves." Instead, he gives them a hypothetical quota and asks them how they'd achieve it.
The Measure of Success
How do you track and compensate sales managers? A recent survey of 1,200 companies found that they use various (and multiple) yardsticks. The trusty sales quota remains the most common.
67% Meeting team quotas
41% Winning new accounts
30% Maintaining margins/avoiding discounts
18% Minimizing customer churn
14% Making accurate forecasts