Question: I don”™t know if I have enough salespeople. Our organization is growing, and I want it to keep growing. We”™re starting to plan for next year and the year after that. How do we figure out how many salespeople we will need to hit our goals?
Thoughts of the day: One answer is this: You can never have enough sales, so you can never have enough salespeople.
Look at historical patterns to establish realistic goals. Consider ways to boost productivity of salespeople. Make sure costs are in line. Plan well in advance as it takes time for salespeople to mature.
Just because your sales team hit plan last year doesn”™t mean it will hit plan again this year. Things happen, things that would have been difficult to foresee or impossible to predict.
Growing the sales force in advance of the need for growth in revenue is a smart idea. There are few things that a company can invest in that can guarantee future profits. Done right, a sales force is one of them.
Look at data from previous years to figure out smart expectations for an average salesperson. Look at the growth track, washout rate and range of production from low, high and median performers. Consider both revenue and gross profit contribution.
Decide who and what you want to use for a success model ”” not too big or too small. Look at the bulk of your salespeople for examples of realistic expectations. Evaluate high- and low-volume producers in terms of variety of customers, profitability and ability to expand a portfolio and retain existing business.
Match what salespeople have typically accomplished in relation to company objectives one to three years down the road. How many salespeople are maxed out or declining? How many have realistic growth potential? Are there any with the ability and opportunity to become super producers? Could moving a person from one territory to another increase the ability to contribute?
Before adding to the sales organization, take a look at what”™s behind it. How much work do salespeople do that has nothing to do with sales: order entry, research on the territory, follow-up to ensure orders go out on time, gathering information on competitive threats and how to position ”” all things that a great salesperson will make time to do. But think how much more productive your salespeople would be if they didn”™t have to do all that. Consider beefing up customer service, assigning account assistants or adding marketing resources to do nonsales legwork for your salespeople.
If some people are approaching retirement, offer to hire a junior person to help. In return, have them train the new people on best practices. Eventually customers will have to transition from one salesperson to another. Wouldn”™t it be great if the account person who”™s been backing up their primary salesperson takes over when the primary retires?
Think about boosting training and recruiting resources. If you can hire better and reduce turnover, you”™ll be better able to focus resources on the most productive people. As you get ready to add more salespeople, make sure that you have the right cost-payoff ratio. Commission plans should be calculated on gross profit, not on revenue. Tie incentives to activities that lead to maximum sales growth. Extra commissions should drive more sales, and if they don”™t, they should be eliminated.
Get your sales compensation plan right for the new salespeople. Rather than continuing the way things have always been, make adjustments before expanding. Even if it means you have two tiers of compensation, get the plan right going forward with the new people.
Get a realistic picture of how long it takes for your typical salesperson to mature. Don”™t plan on replacing someone in less than a year if it takes several years for a salesperson to come up to full speed. Plan conservatively by building a farm team for sales. Bring people on in customer service and give them an opportunity to compete for openings in sales.
The bottom line ”” build your sales organization every year. Whether you”™re thinking about bringing on your first salesperson or evaluating how to grow a nationwide team, it”™s always worthwhile to build for growth.
Looking for a good book? Try “The Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to go from $0 to $100 million” by Mark Roberge.
Andi Gray is president of Strategy Leaders Inc., strategyleaders.com, a business-consulting firm that specializes in helping entrepreneurial firms grow. She can be reached by phone at 877-238-3535. Do you have a question for Andi? Send it via email to AskAndi@strategyleaders. Visit AskAndi.com for an entire library of Ask Andi articles.
