Sales team – How to structure your sales organisation

If there is one team whose importance cannot be overestimated to any entrepreneur or business owner, it is the sales team, for real. I cannot possibly oversell the importance of the sales process in any business. But I’ll try anyway.

There is what is known as a process funnel in business. It starts with targeting a prospect or potential customer and ends when that prospect is converted into an advocate or loyal customer. There are lots of processes that are involved in making sure the prospect is converted into a customer. Of all the processes involved, the sales process is perhaps the most important, as it is concerned with winning the prospect over. If any organization gets it wrong here, then there is virtually no hope of success.

For this reason, entrepreneurs need to make sure their sales process is of the highest quality possible. And the very first step to doing this is by finding the right sales team structure. The structure of the sales team is the foundation of the entire sales process. If the foundation of a building is faulty, no matter how beautiful the building is, it will crumble eventually.

The same applies to the sales team structure. Building the right foundation is critical not only for the short term but also for the long-term financial standing of the business.

Source: https://www.balderton.com/wpcontent/uploads/2020/03/BC_sales_playbook_March2020.1FINAL.pdf

A Sales Team Structure

Now, to the topic matter, structuring a sales team. One thing you need to get at the back of your mind now is that there is no one-size-fits-all model when structuring a sales team. There are different models for different organizations, and it is left to you to decide on which model you want to stick with. Consider it this way. Choosing the wrong model is like wearing the wrong shoes to an event. When you are going to a dance party, you wouldn’t want to put high heels. Not that the high heels aren’t fabulous, they always bang on corporate outfits, but that’s the issue; they aren’t meant for dancing. The same applies to sales team models. They depend heavily on whether you have a sales led business or focussing on product led growth. You need to find which works for you because the decisions you make now will have long-lasting consequences on the future of your business. No pressure, though.

Roles in a typical sales team

1.    Lead Generation

As the name suggests, this team is involved with hunting for leads and prospects. Leads first have to be generated before they can be nurtured and converted into customers, and this team takes the responsibility of that.

2.    Sales Development Reps

Again, the name gives away a lot about what this team is all about. SDRs are concerned with developing and generating leads for outbound sales.

3.    Account Executives

The role of this team is to get customers’ commitments and close out the sale.

4.    Customer Success Managers

This team is concerned with ensuring the satisfaction of the customer. They also seek opportunities to cross-sell and up-sell.

5.    Account Managers

This team assists the customer in developing their use of the product internally, mainly for cross-sell and up-sell purposes. They also do this to generate engagement. Many organizations blend the work of this team with the customer success team because of the similarity in their responsibility.

6.    Head of Sales

This team or individual oversees the entire sales process. They lead the sales team and also help to establish target quotas, the best team structure, and compensations.

Types of Sales Structure

There are many types of sales team models, but below are three that have been tested and proven to be effective in creating a successful business sales process.

1. The Assembly Line

This model is also called the hunter-farmer model, and for a good reason too, but we’ll get to that. It is one of the most widely used models today, especially by SaaS startups and small to medium-sized firms. Its wide usage can probably be attributed to its straightforward and simple nature.

In this model, each team member has a designated role in the sales line. Like with traditional manufacturing lines, one team member handles a specific responsibility and passes it to another team member higher up the assembly line.

Let’s examine a practical example. A business with this model will have a team consisting of at least one member to handle lead generation. Upon completion, the lead generation team passes off tasks to the SDRs. And this goes on and on till the sale is closed and the customer is satisfied.

This explains why it is called the hunter-farmer model. The hunters here represent the team members that focus on lead generation, or hunting if you prefer. The farmers, on the other hand, are concerned with satisfying the customers. They work on the customers to raise lifetime value and increase upselling opportunities.

Pros

  1. It is easy to understand and execute.
  2. This model is useful for many different products and industries.
  3. The assembly line is a very efficient model because of the specialization of each team.
  4. It is easy to spot errors and problems in the assembly line model.

Cons

  1. This success of this model hinges on the number of people available. To execute it successfully, you need at least six members.
  2. Communication and aligning the functions of each team may prove problematic in this model because of the high specialization.

2. The Island

What can I say, this model is even more straightforward than the assembly line model, and that’s saying something. In this model, each sales rep is responsible for overseeing all the stages of the sales process.

The implication of this is that rather than the sales rep specializing on one stage of the sales process, they handle all. Assume there are nine sales reps. They are not divided into specialized teams – no, each sales rep will handle all the stages of the sales process, starting from lead generation to closing out the customer and finding up-sell opportunities.

There is typically a pyramid, with the business owner or manager at the top, the sales managers just below the owner, and then the sales reps. The sales reps report to the sales managers, and the sales managers report to the owner. Sales managers oversee the work of the sales reps, and the owner oversees the general sales team.

This model is prevalent in the finance and real estate industries, but some SaaS startups also utilize it.

Source: https://www.lucidchart.com/blog/sales-organization-structure

Pros

  1. This model is very simple and straightforward.
  2. This structure requires little management and is easy to execute.
  3. It flourishes in highly competitive industries.

Cons

  1. It isn’t easy to track sales metrics in this structure because members of the sales team don’t work together.
  2. Competition is not always a pro. There is always the possibility that unhealthy competition may arise, causing a toxic work environment.
  3. This structure may flop in organizations that require highly complex sales processes.

3. The POD

This structure is rapidly gaining popularity in the SaaS industry, and you’re about to find out why. This model is very similar to the assembly line model. In this model, sales team members are divided into groups or pods, with each pod saddled with the responsibility of selling to a particular set of customers. It takes advantage of the fact that different customers require different sales approaches.

The sales POD is designed based on the market, type of customer, target region, etc. This implies that PODs can be structured differently depending on what is the business needs at the time.

Source: https://www.lucidchart.com/blog/sales-organization-structure

Pros

  1. This structure is highly efficient and, at the same time, affords sales managers to assign teams based on the customer base that they hope will be most successful.
  2. Team members in a pod complement one another. This is due to the diversity in their areas of strengths and weaknesses; that is, one person’s strength may be another’s weakness.
  3. This model is the most flexible of all, making it a fan-favorite amongst growing SaaS startups.

Cons

  1. Due to the collaborative nature of the POD model, motivating members may prove especially challenging.
  2. Intra-group conflicts may significantly reduce the efficiency of this structure. And many conflicts may arise when people don’t work well together.

How to choose the right sales team structure

I already made it explicitly clear what will happen when the wrong sales team structure is used, and I’ll say it again – disaster. Choosing the right structure doesn’t have to be difficult. Just follow the tips below.

1.    Utilize the right data in assessing your sales team

Data is an essential aspect of assessing your sales team performance. But not just any type of data now; you need to use the right data. Don’t just take a general look at any data and use it to judge sales performance. Find specific data that give the necessary information on what you need. For example, if you want to measure the success of a sales team, you don’t just look at the number of calls they make, but also on the number of those calls that actually end in a prospect coming on-board.

2.    Carefully examine shared credits

Whenever sales are made, there are usually credits that are shared between team members. The more the layers in your sales team, the more credits are usually shared. You need to ensure that the credits are shared with people that actually contributed to the sales. This all boils down to developing the right compensation plan. More on that later. You don’t want to give incentives out to people who weren’t involved in the sales.

3.    Don’t neglect mid-level performers in your sales team

Many times, mid-level performers in a sales team are usually ignored, ignored in the sense that their coaching and training has stopped. This will only cause stagnation in their development, which will come back to bite you later. Ensure that you train and also incentivize them sufficiently.

4.    Be proactive with turnovers

No business owner wants to deal with turnovers. Tremendous costs, time, and efforts go into replacing sales workers. Trust me when I say you don’t want that. This is why business owners need to reduce turnover rates to the barest minimum. The easiest way to do this is always to be proactive and alert, use metrics to adjudge reps at the risk of turnovers, and take action immediately.

5.    Assess overall sales

Always look at the overall sales. There may be a few dips here and there, but if these dips are sustained over an extended period, then you need to take action immediately. Maybe the workload is too much; maybe there are too many sales reps to a manager. All these are what you need to pay close attention to and fix. And the best way to do this, again, is through proper utilization of data.

Tips for creating a strong sales culture

A strong sales culture is critical for the success of any organization, including SaaS companies. The sales culture will leave the organization in good condition, in both the short term and the long term. In light of this, below are a few tips that will guide you.

1.    Find your ideal sales team structure

Find the right structure for your organization. I must have said this a thousand times already, going to show you how critical it is. If you are stuck between two models, go for the more efficient one and train your employees in that vein. For SaaS startups, I’ll strongly recommend the POD model. Remember that efficiency is a priority. However, you must also ensure you teach your employees how to work effectively. It’s a delicate balance you need to get right.

2.    Use the sales acceleration formula when building your sales team

Well, maybe I should let Mark Roberge do the talking on this one. His book, The Sales Acceleration Formula, contains all you need to know on this topic. You need a formula when hiring to assist you in making the right decisions. Coming up with one yourself is not advised because of the huge stress involved and the fact that it may not even be top-notch. Mark’s formula will guide you on how to qualify candidates when hiring. Please, read the book.

Source: https://tomtunguz.com/best-books-saas-sales/

3.    Don’t focus on just quota

Your sales culture shouldn’t just be quota-based. Of course, you need to have that winning mentality and drive for hitting quota goals, but you also need your employees to care about the company too. And when I say caring about the company, the bulk of effort goes to caring for customers. You want to have a sales team that also cares about customer experience, and you will find out that it will help you because happier customers will eventually lead to more sales.

4.    Source for passionate employees

If there is one thing you cannot train, it’s passion. If your employees lack passion, then there’s virtually nothing you can do to help. So, to avoid the headache of having to try to instill passion in your employees, make sure you source for employees that are passionate about working with you.

5.    Get compensation right for your sales team

I can write a whole article about just this. Compensation is one aspect of sales you just need to get right. With compensation, the idea is to create an environment that rewards overperformers. This will drive others to perform well, and it means more sales.

Sales compensation is different from regular team compensation, as sales are the most quantifiable of all activities, and its compensation should reflect directly. Another thing is that sales are usually more short-term than other activities, and hence you need to incentivize sales teams to make sales daily, weekly, and monthly. You cannot afford to make the wrong decisions with compensation. Below are tips to guide you in building a compensation plan.

  • Start with the structure of the team and target earnings for the various seniority levels and roles
  • Find base to commissions ratio. Commissions should be between fifty to hundred percent of base
  • Determine the variable compensation system and the quotas
  • Come up with tools that will drive behavior and make the compensation plan fair
  • Define the results the business desires and compensate accordingly
  • Don’t make the compensation plan complex or ambiguous. Your members should be able to understand it quite easily

Top recruiting tools

Gone are the days where recruitment had to be done manually, thank you technology, now several software platforms can assist with recruitment. But picking the right one is the problem. You can’t just guess on which platform to use; that would not be smart at all because of how essential recruiting the right sales members is to any business. Don’t fret, though, I have you covered with ten of the best recruitment tools.

There’s more. These tools are not just limited to recruiting sales team members; they can handle the recruitment of employees in other aspects too. So, the marketing, customer success, design, engineering teams, and more are all covered too. They are:

  1. UltiPro
  2. Jobvite
  3. iCIMS recruit
  4. JazzHR
  5. SmartRecruiters
  6. Zoho Recruit
  7. ClearCompany
  8. LinkedIn Talent
  9. ADP Workforce Now
  10. Ascendify

Successful startups with the right sales team structure

There is nothing quite as inspirational as seeing a business idea start from nothing and grow into a world-beater. Many of the most successful businesses today started from nothing. That’s enough to tell you that you and your business can go right to the very top. Some of the successful startups are:

  • Airbnb
  • Instagram
  • LinkedIn
  • Uber
  • Twitter
  • WhatsApp
  • FaceBook
  • Pure Storage
  • AdRoll

If you play your cards right, you can get on this elite list too.

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