16.07 – Organising & Managing Your Sales Team
Who does what, when, and where? These organisational questions challenge many sales and marketing managers. Finding the answers can significantly impact sales force productivity.
Determining How Many Salespeople You Need
Assess the performance of each territory to decide if more salespeople can help or if you can make do with fewer. Identify where basic sales and service may be falling through the cracks. Consider the following questions to optimise your sales efforts:
- Are some territories rich in prospects that salespeople just don’t have time to reach? Consider splitting those territories or adding salespeople.
- Are you experiencing high customer turnover in a territory due to poor service or other controllable factors?
- Are efforts in low-potential territories detracting from efforts in high-potential areas?
Before determining the efficacy of salespeople in given territories, conduct market analysis. Understand the total addressable market in a specific region, the number of competitors, and the realistic potential for your business. This will help you hire appropriately and set reasonable individual goals and quotas.
Hiring Your Own Salespeople or Using Sales Reps
Decide whether to hire salespeople yourself or subcontract your sales. Many industries have companies that hire and manage salespeople for you, known as sales representatives (reps). They usually work for a straight 10 to 20 percent commission, depending on the industry. Reps performing consultative selling and customised service often expect a higher commission.
For small companies or those with short product lines, using sales reps might make the most sense. They are ideal when scale problems make it difficult to justify hiring dedicated salespeople. Scale problems arise when a limited product line offers little to sell and build commissions on, or when the cost of the sales process is higher than the value of the orders placed.
If your product line is extensive enough, hiring and managing your own dedicated salespeople can offer more control, better market feedback, and a higher ROI. Dedicated salespeople generally outsell outside sales reps because they are entirely focused on your product line.
Finding Good Sales Reps
To find sales reps, consider:
- Word-of-mouth referrals or meeting at trade shows and industry conferences.
- Social media: Platforms like LinkedIn offer job boards and opportunities to identify professionals looking for work.
- Competitors: Recruiting competitors’ reps brings industry knowledge and an established network.
- Associations: Industry associations often charge nominal fees for posting positions on job boards, which are great sources for finding candidates.
A growing number of websites offer access to sales reps and freelance salespeople on short-term contracts. These sites provide leads, so ensure you screen candidates carefully and start with a trial basis if you hire someone.
Managing Sales Reps Effectively
Once you have reps for each territory, track their sales efforts regularly. Identify the best and worst performers, as typically 10 to 15 percent of reps make the majority of sales. Monitor performance, make changes quickly to cut losses, and maximise sales potential. Train each rep to tell your brand story so your message and ESP are consistent across all reps and marketing channels.
Weekly meetings to review progress are effective motivators. Visual aids like graphs can clearly show sales progress and highlight performance gaps.
Compensating Your Sales Force
To recruit top-tier salespeople, offer a top-tier compensation plan. Differentiate your compensation model from industry norms to make your job openings stand out.
- Consultative, service-oriented approach: Offer salary-based compensation with sales incentives linked to long-term customer retention or increased value among existing customers.
- Self-motivated salespeople: Offer a higher commission than competitors.
Research comparable positions to establish a starting point before designing your compensation plan. Ensure salespeople have high task clarity, meaning clear links from their sales efforts to positive results. Provide the products, leads, knowledge, and support needed for success.
Be cautious not to offer such a high base salary that there’s little incentive to sell. Salespeople often perform better when motivated by the opportunity to earn more.
Look for candidates with an athlete’s mind-set. People who played sports often compete to win, hate to lose, and develop routines to perfect their skills. These attributes drive high achievement and profitability, as they strive to beat compensation goals and internal competition.
Successful selling depends on good systems, excellent products that meet consumer demand, and motivated salespeople. Ensure your products or services are relevant, stay on top of consumer needs, market trends, and technological innovations to maintain your relevance.
