5 Principles for Building a Great Sales Organization
Building a high-performing sales team is no easy task. In fact, for most sales leaders, hiring and retaining the right sales talent is as challenging as having enough good-quality sales leads. According to a recent study by USC business professor Steve W. Martin, 71 percent of sales leaders consider their ability to hire and retain sales talent a top hurdle to overcome, nearly even with lead generation, a primary concern among 72 percent of sales leaders.
So how do you build a world-class sales team? With a long history of consulting and working alongside great sales teams, in addition to spending the past four years leading a company with sales ingrained in its DNA, I've teased out five principles that tend to be in place at organizations that attract and retain the best sales talent:
1. Great sales organizations have a thoughtful balance of inside and field sales representatives.
The way that buyers make purchasing decisions has undergone unprecedented change over the past decade. Today's buyers have more information at their fingertips, and technological and interpersonal shifts are combining to increase their comfort in making a purchase without ever meeting someone face-to-face. With this in mind, the first step should be to assess your sales team's makeup (inside versus field) and determine where to aim each group. Questions to ask include: What is needed to convert the majority of your leads? Are there clear thresholds for deal size or product where either inside or field sales work better? How important is a face-to-face meeting to closing a deal? If you're like 46 percent of the companies Martin surveyed, you may find your inside sales team is increasingly able to handle more deals, and that a greater emphasis on inside sales may be prudent.
2. Great sales organizations do not skimp on compensation.
Good salespeople expect to be paid well. That's obvious. What is sometimes less obvious is that a good sales compensation plan isn't generous in every respect. A plan to attract the best salespeople has a moderate base salary and an unlimited upside on commissions. If a salesperson says he needs a "decent" (read "above average") base salary to "sustain his lifestyle," I know there is something he doesn't believe in. Whether it's the market, the product, or his own abilities doesn't really matter, because a hesitant salesperson is probably not going to bring home the bacon. Belief is reality in sales.
For similar reasons, commission plans should have no limit. Why would you ever tell a salesperson who's on a roll that she should stop selling? Capped commissions don't make sense and turn off the best sales talent. It's tempting to cap commissions in certain circumstances because you are selling a new product or going into a new market or territory and worry that you may end up being too generous. But at the end of the day, if a salesperson makes out like a bandit because he exceeds expectations, everyone should be happy.
3. Great sales organizations ensure quotas are aggressive but within reach.
Quotas should always be a reach, but not a stretch. Establishing crazy stretches on quotas is a recipe for discontent. Salespeople are by nature competitive, and the first order of competition is to establish yourself as above average. Quota is, in a salesperson's psyche, ingrained as being the equivalent to an "average" attainment. So setting quotas artificially high makes a good salesperson feel as if he is not exceeding expectations. On the flip side, don't set quotas at a level so low that mediocre salespeople find them easy to attain.
4. Great sales organizations have a culture that celebrates sales success.
There is nothing more discouraging than being part of a team that doesn't acknowledge or celebrate success. High-performing salespeople, like anyone, want to be recognized for their efforts. It can be as simple as having a bell to ring announcing they've closed a major deal or something more complex, like quarterly contests and recognition events. When I am considering hiring a salesperson, I usually make an effort to walk her past a sales dashboard that "celebrates" the highest-ranking salespeople of the moment and the attainment of the team at that point in the month or quarter. Good salespeople are energized by a competitive environment.
5. Great sales organizations wear competition on their sleeves.
Good salespeople are competitive at their core. Finding ways to foster this competitive spirit in a constructive manner can be the difference between having a good sales team and a great one. When it comes to hiring, look for people who have played sports, participated in competitive academic-focused events, or engage in activities where they compete against themselves (e.g., a marathon runner or a golfer). One of my favorite things to ask in a sales interview is "Outside of work, when did you last win at something?" A great salesperson will be able to tell you immediately, and it will be a recent activity that she has personally participated in.
Sales success is bred from an environment that can properly react to opportunities, embrace competition, celebrate success, and compensate salespeople in a manner that keeps them interested but wanting more. If you are building or rebuilding a sales organization, I strongly recommend you consider incorporating these five principles to attract and retain the best sales talent. For most companies, doing this is far more important than anything else you can do when it comes to generating revenue for the organization.
Nick Hedges is the president and CEO of Velocify and a 15-year veteran of the Internet and software-as-a-service industry. He joined Velocify in 2008 as senior vice president of business development and held various roles at the company including head of sales and chief revenue officer prior to becoming CEO in 2011.