Sales team structure remains to be a consistent struggle for many organizations: what is the proper organization that maximizes effectiveness, efficiency and productivity? While there is no one-size-fits-all answer, there are basic rules that dictate how different sales force structures can best address a company’s potential market(s).
Let's explore this further.
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First, consideration needs to given to the size and distribution of your potential customers. For example, if a team is selling to a market like banks and credit unions, there are only about 10,000 such organizations in the US. Other than the largest national/regional banking organizations, the majority are local, with a limited regional footprint. In contrast, for insurance sellers who focus on business property and casualty insurance (P&C) or on professional liability coverage, the number of potential clients is in the hundreds of thousands.
It is important to begin organizing the sales team by finding information (i.e. not relying on impressions or opinions) as to the size of the market and how that market is distributed geographically. The natural tendency in each case is to allocate sellers geographically. However, this instinct is not always the most effective approach. For example, consider an insurance agent that specializes in Property & Casualty insurance for fast food restaurants. Fast food purveyors are most often made up of sites owned by the franchisor and privately owned locations with entrepreneurs controlling multiple outlets. Under these circumstances, a purely geographic approach would be suboptimal.
The second major consideration is to examine how the sales role might be made more effective by creating sales specialties. Gone are the days where the most effective approach is to assign sellers responsibility for prospecting, full sales cycle, account management and technical expertise regarding their organization’s solutions. Most modern sales organizations have divided the role of seller into several areas of focus:
Deciding on which of these roles represents the most effective structure depends on evaluating several factors:
Carefully evaluating these questions, not using intuition or assumption, but rather with real data, is an important component of laying the foundation for the most productive sales team structure.
Most sales managers are left to their own devices when it comes to the instrumental process of connecting their goals with the salespeople on their team. A best practice to beginning this process is to evaluate each seller according to a taxonomy Funnel Clarity refers to as the Results Equation:
(Skills + Process + Company Knowledge) X Effort = Results
Where:
By looking at the Results that each seller is expected to deliver, the equation allows first-line managers to pinpoint where the seller needs training, coaching and/or oversight.
Not all sales organizations inherently seek a spirit of collaboration and sense of "team". Either directly, or by implication, some organizations create an openly competitive environment between each seller. Research has shown that most organizations who have such a culture are likely operating in a suboptimal fashion.
Organizations that are able to create an ethos of collaboration, while still holding each individual responsible for their own performance, are often the most productive. The key to creating such an atmosphere is how well first line managers become force multipliers of performance. It is surprising how few organizations prepare first line managers to deliver on this potential. Typically, organizations promote the highest performing sellers into first line manager positions. Unfortunately, the requirements of excellence in sales and excellence in managers are markedly different. Failing to provide newly promoted managers with sales management training will always leave developing a collaborative culture completely to chance.
As one particular example of an area for improvement, consider how most companies conduct opportunity reviews in group meeting settings. Typically, the salesperson will report on the activities they have completed and those they plan on doing next, with their manager providing "advice" as to how to do better. In a culture of collaboration, each seller comes to opportunity review meetings with a clear sense of where the entire team could be helpful in brainstorming how to move a deal forward, while the manager serves as facilitator. In other words, a seller’s peers are encouraged to ask questions about strategy and suggest alternative approaches which the seller may not have considered. The manager oversees and stimulates these discussions by drawing the team’s attention to best practices that may be apropos to the current situation.
This is a huge topic, a full discussion of which is beyond the scope of this post, and has been touched on in other posts. However, there is an overarching consideration to selecting technologies. The big question is, how will any technology improve seller performance vs. technologies that allow multiple constituencies to inspect sales efforts?
Sellers, by nature, are often not great time managers. This axiom becomes even more of an issue when considering the following recent research insights:
What gets in the way of average performers: Too much technology coupled with too many inspectors requiring too much data.
Two things can address the issue:
There is a myriad of areas where training can improve sales performance. Far too many areas for any one salesforce. In each of the following categories there are several potential training courses:
There are four factors in play whenever an organization recognizes a need for sales training:
In terms of where to start a process of training for sales improvement from a content perspective, the Results Equation above reveals an interesting conclusion: it may not matter. Note that each term inside the parentheses is additive. "Effort" is multiplicative of that sum. That would imply that the best place to start is preparing managers to drive post-learning through reinforcement and coaching. This can be a portion of an engagement to train sellers on any of the content. Providing an accurate diagnosis of where the content and process will produce the highest ROI/ROE and be the easiest to adopt is the question that drives the answer to "where do we start?"
The key to driving sales improvement lies in determining a limited number of ratios by which sellers and managers can determine:
What do we mean by "limited number of ratios?" The first part of the answer is to recognize the format of each ratio is always the same:
Success
______________________
Effort
In other words, how successful in executing key activities is each seller, relative to the amount of time and energy they devote to each best practice. Clearly, a huge number of such ratios could be conceived of, but assembling the data and analyzing the results would be maddening, over academic and sometimes impossible. Instead, choosing no more than five or six ratios to evaluate each sales role can reveal and extraordinary amount of useful insight. Let’s look at a simple example.
Suppose we are looking for useful ratios that address BDR/SDR prospecting activity. The team of BDR’s is expected to execute a minimum of emails sent and numbers dialed each day. This becomes the denominator (Effort). Now suppose we track the number of connections/responses the Effort generated (Success). We will likely find wide disparity between team members both in terms of Effort and in terms of Success. This reveals to managers and leaders a wealth of insight that would otherwise by masked by examining only results.
Structuring a sales team to create the best possible performing organization seldom receives the attention and analysis that it deserves. If an organization can find the time and expertise to examine issue such as sales training, manager preparation, design of appropriate metrics, etc. the amplification of performance is enormous. There is no need to try it all. Any organization can begin with training and manager preparation, followed by identifying key ratios, etc. Always remember, the Results Equation is additive and multiplicative.
Jill Ulvestad is the founder of Funnel Clarity. Jill applies her expertise in driving sales performance and results, developing sales strategy and streamlining skills development to the Funnel Clarity team. With nearly 20 years of business development and consulting experience, Jill provides valued sales performance insight to her roles as co-founder and managing partner of Funnel Clarity. Previously, Jill spent 8 years with the sales performance firm Huthwaite where she served as the Vice President of Sales. She most recently was co-founder of Business Performance Partners, a sales and strategy consulting firm and led the coaching practice.
