Grow or Die? How Startups Can Die From Growing Too Quickly

Your modern B2B company is in it’s early stages and you’re working hard to land new accounts and generate promising leads. The scaling period is an exciting time, with new goals to hit and new challenges to overcome. But sooner rather than later, you’ll find yourself asking “when should I start expanding my sales team?”

The hiring process surrounding sales teams is a delicate balance between hiring ahead and not overextending your growth. Hiring your sales team before your company is ready can be an extremely costly mistake, while waiting too long may cost you to lose opportunities to competitors.

The growth of a company is a predictor of its long-term success – companies whose growth was greater than 60% when they reached $100 million in revenues were 8 times more likely to reach $1 billion in revenue than companies growing less than 20%, according to a study of online service and software companies done by McKinsey & Company.

Since it typically takes 8 months to for newly hired employees to reach full productivity, it may be roughly the same amount of time before your organization is reaching its full sales potential.

Knowing when to grow your sales team is hard. Deciding how to scale once your organization is ready is even more difficult. Based on our own experiences in the world of scaling fast-growing businesses, we’ve compiled these steps to scaling sales teams to help your organization hit quotas, scale effectively, and hire the right sales team the first time.

Evaluate Your Sales Force

For 80% of sales teams, acquiring new customers is the main goal. When you’re deciding whether it is the right time to grow your company and how that process should play out, evaluating your current sales force is crucial. But what should you be evaluating your sales force for, exactly?

Analyze Sales Productivity

Generating a clear picture of how your product is performing on the market allows sales leaders to use data to discover a target market, or whether you require a more aggressive sales approach. Honesty is policy when you’re developing your sales team, so be realistic about your product, and where you’re at on the market.

Before adding new heads to your sales force, you first need to understand how your product is penetrating the market. 96% of world-class sales teams know why their top performers are successful, but only 46% of average sales teams can say the same. By using data, you can analyze your sales productivity, and why these sales were successful.

Luckily, new sales teams can adapt quickly to available Customer Relationship Management software (CRM) to gain clear data of customer’s buying habits, the productivity of sales processes, and suggestions on how sales strategies can be optimized throughout the engagement lifecycle for efficient scaling.

Below are few insights tools we recommend when growing your sales team:

InsightSquared: This tool turns your CRM data into digestible visuals and reports that can be used to signal your sales front-runners, so that team leads and young sales companies can revise their sales processes based on proven strategies.

Seismic: Seismic helps to perfect the sales engagement cycle, bonding your marketing and sales team members together for streamlined processes and personalized content for customers.

People.ai: People.ai isn’t your standard CRM software. With a staggering 80% of executives believing AI boosts productivity, AI sales management technology is for forward-thinking sales teams. People.ai allows companies to see data, understand where their focus should be to increase revenue, coach their sales staff using personalized AI powered feedback, ultimately generating a clear plan of how to close a deal.

By utilizing these softwares early in the growth stage, you’ll have a centralized point of truth to see what’s working, and what’s not. Once your team has used data to streamline a repeatable sales process and has established solid reference clients, you can consider expanding the sales staff. Aim at hiring between 5 and 15 people, including the specialized roles needed to scale effectively.

Grow Effectively Using Metrics

Through collecting data on this first hiring spree, you can fine-tune the repeatable process and effectively coach the new hires during their ramp-up time. When building a successful sales team, metrics are vital for gauging direction. There are a couple of ways to go about this, including:

Review Data Regularly

Review your data findings regularly to take note of who is hitting forecasted quotas versus who’s not. Many teams add 30, 50, even 100 reps without looking at individual performance. In a study conducted by TAS Group, only one-third of sales people meet individual quota, while 23% of companies surveyed don’t know if their sales team achieved quota or not. Managers must validate that individual sales reps can hit a performance target, and when they don’t, analytics can help guide managers towards the point where a sale goes awry.  Don’t start scaling based on what you forecast….forecast on actuals!

Manage Distribution of Accounts

Sometimes, the distribution of accounts can skew how a sales rep is meeting growth. They might be showcasing repeatable signs of growth, but this may be due to them having the best repeatable sale accounts. As a manager, you want to ensure you’re watching over the total addressable market and accounts closed under individual’s names, to avoid getting a false-positive in your data.

Stack Your Sales Team with Supporting Characters

Equipping your sales team with sufficient staff to keep up with sales is only half of the puzzle. The other half is ensuring that you hire the proper supporting characters. Although adding sales reps may be tempting when a young company is rapidly growing, having specialized roles will help you hire these reps effectively.

When a company skips on hiring skilled sales operation roles to extract data and run technology effectively, or sales trainers dedicated to perfecting the onboarding process, managers are left to complete the training themselves. 60% of companies stated that they didn’t set any goals or milestones for their new hires, making it increasingly difficult for managers to train, and for staff to gauge their role within a new organization. Managers need to be manning their accounts and entire sales team, rather than training individuals throughout the ramp period.

Ahead of growth, organizations must have a consistent, repeatable training and ramp period, in the same way that an organization needs a repeatable sales process. Manager satisfaction increases by 20% when their employees have formal onboarding training.

Before your sales team can grow successfully, a repeatable and rock-solid interview and hiring program must be in place. If these processes are not unbreakable, businesses risk getting their hiring persona wrong. An estimated 37 billion dollars is spent each year in the United States and United Kingdom to keep unproductive employees who don’t understand their role.

Hire the supportive roles necessary for effective sales team growth in the early stages of scaling your company, to ensure that you’re building a sales team that will drive leads towards the end of the sales funnel and generate the revenue your organization needs to continue growing.

Leaders of effective organizations combine data and supportive roles to streamline their sales team growth when the time is right. Want more information on growing a successful sales team? Download our free ebook, Hiring Superior Salespeople.

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