Last year, we hired a sales manager and tripled our sales team. Only a couple of quarters and a pivot later, we downsized and restructured the bloat. As it turns out, we had made a classic mistake.
According to Aaron Ross, former Salesforce executive and founder of Predictable Revenue, Inc., there are two kinds of sales teams: builders and growers. Builders create procedures and solve problems; growers scale best practices and multiply results. Our error was that we hired a team of growers without first answering key strategy and resources questions that are best handled by builders.
What were those questions? For starters we:
hadn’t researched or ordered any scalable marketing software;
were using training materials that didn’t produce consistent results; and
hadn’t determined which markets would be more profitable to target.
Solving these problems would take a great deal of research, retraining and trial and error. When you add recruitment, training and ballooned sales rep salaries to that list, it’s a recipe for lost productivity and negative ROI.
It’s far better to overcome the bulk of your company’s problems using a smaller, low-cost builder team first. So, here’s a look at four changes we made to convert our growers team into a builders team:
1. Go from salary plus to 100% commission
Without the right tools and technique, the sales team couldn’t produce results to cover their own labor costs. Yet, testing better tools similarly hurt the sales team’s ROI. In order to free up the budget for innovation and experimentation, we had to cut labor costs.
Needless to say, we lost a majority of our sales team (25 reps) once we announced this change. However, the five who stayed were our top performers. They performed well with the under-resourced, ever-evolving conditions of the department — the builders we needed.
2. Cut team size and slow down hiring
With base pay eliminated, we had five senior salespeople. We’ve only grown the number to 10 in the six months since. The problem with mass hiring during a building phase is that routine training becomes obsolete.
The learning curve becomes a learning wave that causes dips in productivity. Imagine the frustration of a salesperson faces after just learning the ropes when faced with learning a new tool or procedure.
When you slow down the hiring process you allows teams to spend less time training others and more time retraining one another.
3. Focus on mentorship, not mass sales training
We also parted ways with our executive level sales lead. After all, high salaries require a comparable return on investment; something he no longer had the staff or tools to achieve. The reduction in hires and training alone left him with a lot less to do. Plus, the mass trainings made it difficult to ensure everyone got the memo. It also internalized the justification for new tactics.
Under the old sales training method, there were always stragglers. New hires would learn bad habits from more senior reps. So, when results fluctuated we could never identify the exact cause. Was it a new procedure? Some exceptional new hires? Great training kicking in or ineffectual tactics being ignored? Now, senior sales reps mentor their less experienced counterparts. As a result, the average time between on-boarding and the first sale has been reduced by a full week.
4. Choose collaboration in lieu of top-down leadership
Another benefit of mentorship is that idea generation can be more multilateral. The team is now so small that every member can: a) join substantive strategy sessions; b) get their questions answered; and c) understand the thought process behind every decision. More importantly, members come up with ideas of their own, which they can disseminate and test just as effectively.
Building a successful sales team
With only a third of the original sales team, TalkLocal’s new builder force delivers only 50 percent fewer sales than the larger team at its peak, a figure that just last month shows signs of decreasing.
Meanwhile, we’ve saved $92 per sale — money that is being reinvested into projects like our drip marketing campaign, testing LinkedIn advertising, the development of new landing pages and partnerships that will deliver added value for our clients.
Of course, once the company has a replicable sales model in place, we’ll need all the manpower we can get to fuel growth. We’ll likely revert to a more competitive pay structure, create a more scalable training process, and bring on visionary executive-level leadership to maximize potential.
For now, we’re thankful for the mutually supportive, collaborative and self-motivated sales pioneers who are laying the groundwork for a scalable path to success. Who needs Danica Patrick in the Model T engineering team? As much as we look forward to growth, we’re thrilled to be in a time to build.
This article has been edited.
Manpreet Singh is Founder and President of TalkLocal, a home services marketplace that turns online service requests into a live conversation with the right available business in minutes.
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